Indexed ARMs
Adjustable rate mortgages on which the interest rate is mechanically determined based on the value of an interest rate index. Indexed ARMs are distinguished from Discretionary ARMs, in that the first provides the lender with zero discretion in setting future interest rates, while the latter provides the lender with complete discretion. All ARMs discussed in Adjustable Rate Mortgage (ARM) are indexed ARMs, which is the only kind used in the U.S.
Popular Mortgage Terms
A collateralized debt obligation, also known as CDO, defines a complex financial product. Various loans, mortgages, bonds, and valuables back this commodity, and institutional investors ...
The lowest interest rate possible under an ARM contract. Floors are less common than ceilings. ...
Mortgages delivered using the Internet as a major part of the communication process between the borrower and the lender. ...
A mortgage on which the borrower gives up a share in future price appreciation in exchange for a lower interest rate and/or interest deferral. SAM's in the private market had a brief ...
The ratio of total housing expense to borrower income. This ratio is used (along with other factors) in qualifying borrowers. ...
A second mortgage offered at preferential (subsidized) terms to those who qualify. For example, a labor union may offer members who are first-time home buyers a silent second to finance ...
The period over which the interest due the lender is calculated. The interest accrual period may or may not correspond to the payment period. On the annual accrual mortgages in the UK, ...
The array of laws and regulations dictating the information that must be disclosed to mortgage borrowers, and the method and timing of disclosure. ...
On an ARM, the assumption that the interest rate rises to the maximum extent permitted by the loan contract. ...
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