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
A simple box-shaped house with clapboard siding and a gable roof. ...
Trade group of predominately land developers. ...
Usually a fairly large site zoned and planned for the purpose of industrial development and located outside the main residential area of a city. Industrial parks normally are provided with ...
Putting a waterproofing substance on the exterior cement walls of the structure to prevent water from entering the interior of structure. The cracks in the walls are patched up. ...
Involves more than one borrower being responsible for a mortgage, such as with a cooperative apartment. Involves more than one mortgagee lent on a real estate project, such as with a ...
The basic definition of an acquisition loan is the kind of loan that gives a company the funds necessary to make a purchase. The type of investment depends on the company’s activity, ...
Registered real estate broker who charge a flat fee, rather than a commission, for real estate purchase and sale transactions regardless of the property's sale price. No fee is charge if ...
Worth of the property part which is left subsequent to a condemnation action. ...
The definition of abatement is a reduction of penalties or a tax deduction for individuals or businesses. It can often be accessed upon an overpayment of taxes, if the company or individual ...
Have a question or comment?
We're here to help.