Scheduled Mortgage Payment
The amount the borrower is obliged to pay each period, including interest, principal, and mortgage insurance, under the terms of the mortgage contract. Paying less than the scheduled amount results in delinquency; paying more results in a partial prepayment. On FRMs and ARMs that do not allow negative amortization, the scheduled payment is the fully amortizing payment, unless the loan has an interest-only option for some period at the beginning, such as five or 10 years. In that case, the scheduled payment is the interest-only payment until the end of the interest-only period, when it becomes the fully amortizing payment. On ARMs that allow negative amortization, the scheduled payment may be determined by the lender in a number of ways, which can change over the life of the instrument. Some of these ARMs also allow the borrower to elect from alternative payment plans during the early years of the loan. Whatever form the scheduled payment takes in the early years, however, at some point it becomes the fully amortizing payment.
Popular Mortgage Terms
Fixed rate Mortgage is a type of loan that maintains a specified interest rate for the lifetime (or maturity) of the mortgage.According to the Federal National Mortgage Association, ...
A mortgage on which half the monthly payment is paid twice a month. It should be called a 'semi-monthly mortgage' but market practice often trumps logic. In contrast to a biweekly, a ...
A mortgage that does not meet the purchase requirements of the two federal agencies, Fannie Mae and Freddie Mac, because it is too large or for other reasons, such as poor credit or ...
Every ARM is tied to an interest rate index. An index has three relevant features:availibility, level, volatility. All the common ARM indexes are readily available from a published source, ...
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 ...
Administering loans between the time of disbursement and the time the loan is fully paid off. Servicing includes collecting payments from the borrower, maintaining payment records, ...
The process of raising cash periodically through successive cash-out refinancings. This is a scam initiated by mortgage brokers that victimizes wholesale lenders, with the connivance of ...
An agreement by the lender not to exercise the legal right to foreclose in exchange for an agreement by the borrower to a payment plan that will cure the borrowers delinquency. ...
Mortgages typically amortize over time through fixed value installment payments. However, there's a type of mortgage that doesn't: the Balloon Mortgage. It's called this way because, with ...
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