Variable Rate Mortgages (VRM)
Mortgage in which the interest rate charged by the lender can vary according to some reference index not controlled by the lender, such as the interest rate on 1-year U.S. T-bills or the 11th District Cost of Funds Index. For the lender, this means that as the cost of money increases, the interest being charged on the existing mortgage can be increased, thus maintaining the gap between the cost of money and return. Either the monthly payment, the maturity date, or both can be charged to reflect the difference in interest rates. In addition, the mortgage usually stipulates a maximum annual charge and a maximum total increase in the interest the lender may charge. Under current regulations established by the FHLBB, the interest rate may not be raised more than 2.5% points above the initial rate. The rate can be changed each six months, with no more than 1/2 of 1% change each six months. Variable rate mortgages are more popularly known as adjustable-rate mortgages (ARM).
Popular Real Estate Terms
When a property owner defaults on his or her tax payments, the taxing jurisdiction may force a liquidation of the property or tax sale for the purpose of collecting the owed real estate ...
(1) Bracket used to support an extended eave or cornice on the outside of a house. (2) Truss or beam projection beyond its base and supported by its strength and rigidity, such as a ...
Main street having a divider either in the center or between the curb and sidewalk with trees, grass, or other shrubbery. ...
Any financing agreement excluding a conventional mortgage from a third-person or entity lending institution. This type of financing is more prevalent when the price of real estate is too ...
There’s a time when it’s neither a Buyer’s Market nor a Seller’s Market. We call it “Renter’s Market”. It’s that time where, despite ...
Legal mechanism available for a person who is over his head financially and is unable to meet his financial obligations. ...
The definition of in rem in real estate is a legal case against a property rather than a person. The legal application of in rem in real estate is most often seen when a homeowner defaults ...
CE Shop has become a widely used and popular term in real estate. But what does it mean? “CE” stands for continuing education, and in the real estate business, it implies a ...
In land surveying, the point al which two properties intersect constituting a boundary line between the properties. A corner can be determined by either a survey or general agreement ...
Have a question or comment?
We're here to help.