Interest Rate Decrease Cap
Definition of "Interest Rate Decrease Cap"
The maximum allowable decrease in the interest rate on an ARM each time rate is adjusted. It is usually one or two percentage points.
Popular Mortgage Terms
The definition of credit risk is at the core of lending. Banks lend money to businesses and individuals and expect to recover the principal and win interest. Banks offer a variety of loans, ...
The number of days for which any lock or float-down holds. The longer the period, the higher the price to the borrower. ...
A rate lock, plus an option to reduce the rate if market interest rates decline during the lock period. ...
Same as term Bridge Loan: A short-term loan, usually from a bank, that 'bridges' the period between the closing of a home purchase and the closing of a home sale. To qualify for a bridge ...
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 ...
Housing expense plus current debt service payments. ...
A clause in the note that allows the lender to demand repayment of the balance in full. A demand clause is even better (for the lender) than an acceleration clause. An acceleration clause ...
An option attached to a mortgage, which allows the borrower to pay only the interest for some period. A mortgage is 'interest only' if the monthly mortgage payment does not include any ...
Limit on the size of payment change on an adjustable rate mortgage. ...
Have a question or comment?
We're here to help.