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
Tax imposed by some state and local governments to record into the public record property deeds and mortgages. ...
Increasing prices during a slowdown in economic activity. ...
The first thing we have to understand about the voidable contract definition is that it is not the same thing as a void contract. A voidable contract can become a void contract if a court ...
Latin abbreviation for the literal translation meaning" which see". ...
Administrator of estate is a term used in common-law jurisdiction for a person assigned a particular responsibility. The administrator of estate definition describes a court-appointed ...
Recognizes profit on a long-term construction contract as it is earned gradually during the construction period. This approach is preferred over the completed contract method because it ...
Figure or value which is the starting point in computing gain or loss, depreciation, depletion, and amortization. ...
A lien which is secondary to a senior lien and cannot be paid until the senior lien is satisfied. ...
Assets owned by an individual as part of his or her estate except for land and everything attached to the land. Personal property may be either tangible, having physical substance such as ...
Have a question or comment?
We're here to help.