Effective Rate
The interest rate adjusted for intra-year compounding. Because interest on a mortgage is calculated monthly, a 6% mortgage actually has a rate of .5% per month. If there were no principal repayments the first year, $100 invested in a 6% mortgage would actually earn $6.17 of interest during the year because of reinvestment of monthly interest. The 'effective rate' is thus 6.17%, while 6% is termed the 'nominal' rate. Similarly, a 6% bond on which interest is paid quarterly has an effective rate of 6.14%.
Popular Mortgage Terms
A lenders requirements regarding how information about income and assets must be provided by the applicant and how it will be used by the lender. The following categories have evolved in ...
A loan with no down payment. ...
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A multi-lender Web site that offered borrowers the capacity to shop among multiple competing lenders. ...
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Loan applications that are withdrawn by borrowers, because they have found a better deal or for other reasons. ...
A borrower who must use tax returns to document income rather than information provided by an employer. ...
Assuming responsibility for someone else's payment obligation in the event that that party defaults. ...
Insurance provided the lender against loss on a mortgage in the event of borrower default. In the U.S., all FHA and VA mortgages are insured by the federal government. On other mortgages, ...
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