Annual adjustment capĪ limit on how much the variable interest rate on a loan can increase or decrease each year. For example, for a 15-year fixed-rate mortgage, the amortization term is 180 months. The amount of time required to amortize (pay off) the loan, expressed in months. You can use this schedule to figure out the amount of principal you’ll be repaying during your mortgage term. Amortization table or scheduleĪ timetable or schedule that gives you a breakdown of your monthly payments into principal and interest. During the final years of the loan, payment amounts are applied almost exclusively to the remaining principal.
During the earlier years of the loan, most of each payment is applied toward the interest owed. The gradual reduction in the principal amount owed on a debt. Affordability analysisĪ preliminary analysis of a borrower’s ability to afford the purchase of a home that takes into consideration factors such as income, liabilities and available funds, as well as the type of home loan, the likely taxes and insurance for the home and the estimated closing costs. The period of time between adjustment dates for an adjustable-rate mortgage (ARM). The date on which the interest rate changes for an adjustable-rate mortgage (ARM). Adjustment capĪ limit to how much a variable interest rate can increase or decrease in a single adjustment period. Most ARMs have a rate cap that limits the amount the interest rate can change, both in an adjustment period and over the life of the loan. Lenders may charge a lower interest rate for the initial period of the loan. Adjustable-rate mortgage (ARM)Ī mortgage in which your interest rate and monthly payments may change periodically during the life of the loan, based on the fluctuation of an index. Additional principal paymentĪ payment made by a borrower of more than the scheduled principal amount due in order to reduce the outstanding balance on the loan, to save on interest over the life of the loan and/or pay off the loan early. Paying down to a zero balance does not count as termination.
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Account termination feeĪ fee that may be charged if you pay in full and terminate your home equity line of credit during the first 5 years. AcceptanceĪ buyer’s or seller’s agreement to enter into a contract and be bound by the terms of the offer. An abstract of title covers the period from the original source of title (often the original land grant from the United States government to an individual) to the present time and summarizes all subsequent documents that have been recorded against that tract. A written history of all the transactions related to the title for a specific tract of land.
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