Payment Rate
Definition of "Payment Rate"
The interest rate used to calculate the mortgage payment. The interest rate and the payment rate are often the same, but they need not be. They must be the same if the payment is fully amortizing. If the payment rate is higher than the interest rate, the payment will be more than fully amortizing and, if continued, the loan will pay off before term. If the payment rate is below the interest rate, the payment will be less than fully amortizing and, if continued, the loan will not be fully paid off at term.
Popular Mortgage Terms
A mortgage on which interest is calculated daily based on the balance on the day of payment, rather than monthly, as on the standard mortgage. ...
A reduction in the mortgage payment made by a homebuyer in the early years of the loan in exchange for an upfront cash deposit provided by the buyer, the seller, or both. How Temporary ...
Same as term housing expense. The sum of the monthly mortgage payment, hazard insurance, property taxes, and homeowner association fees. Housing expense is sometimes referred to as PITI, ...
The payment of principal and interest made by the borrower. ...
A second mortgage on a property that is not paid off when the first mortgage is refinanced. The second mortgage lender must allow subordination of the second to the new first mortgage. ...
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The ratio of housing expense to borrower income. This ratio is one factor used in qualifying borrowers. ...
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A mortgage loan transaction in which the lender assumes responsibility for an existing mortgage. A wrap-around can be attractive to home sellers because they may be able to sell their ...
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