fixed-rate mortgage
81Alternative Mortgage Instrument — A broad category of mortgages that vary from fixed rate, fully amortizing mortgages in terms of amortization schedules, interest rate structure and payment options. These mortgages often make it easier for individuals to purchase real estate by… …
82Balloon payment mortgage — A balloon payment mortgage is a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity.Wiedemer, John P, Real Estate Finance, 8th Edition , p 109 110] The final payment is called a balloon payment …
83Floating rate note — Floating rate notes (FRNs) are bonds that have a variable coupon, equal to a money market reference rate, like LIBOR or federal funds rate, plus a spread. The spread is a rate that remains constant. Almost all FRNs have quarterly coupons, i.e.… …
84Reset Rate — The new percentage of interest that a mortgagor must pay on the principal of an adjustable rate mortgage when the reset date arrives and the prescheduled interest rate change goes into effect. The mortgage contract explains when the rate resets… …
85Conventional Mortgage — A type of mortgage in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. About 35 50% of mortgages, depending on market conditions and consumer trends, are conventional mortgages. In other words,… …
86Reference Rate — An interest rate benchmark upon which a floating rate security or interest rate swap is based. The reference rate will be a moving index such as LIBOR, the prime rate or the rate on benchmark U.S. Treasuries. Depending on the security or… …
87wraparound mortgage — A second mortgage that takes over the first. The first mortgage loan is not paid off. Instead, the borrower makes payments to the second mortgage lender for the debt service of both the first and second liens. The second lien holder then makes… …
88interest-rate risk — interest rate exposure The risk arising from changes in interest rates. In recent decades the different forms of interest rate risk have been the subject of much analysis, monitoring, and scrutiny. In the 1980s, for example, the savings and loan… …
89interest-rate risk — interest rate exposure The risk arising from changes in interest rates. In recent decades the different forms of interest rate risk have been the subject of much analysis, monitoring, and scrutiny. In the 1980s, for example, the savings and loan… …
90Lehman Brothers Mortgage-Backed Securities Index — An index made up of mortgage backed securities that is used for benchmarking purposes. The Lehman Brothers MBS Index consists of fixed rate securities, such as mortgage pools created by the Government National Mortgage Association (GNMA), Federal …
