Payment Rate
Definition of "Payment Rate"
The interest rate used to calculate the mortgage payment. The interest rate and the payment rate are often the same, but they need not be. They must be the same if the payment is fully amortizing. If the payment rate is higher than the interest rate, the payment will be more than fully amortizing and, if continued, the loan will pay off before term. If the payment rate is below the interest rate, the payment will be less than fully amortizing and, if continued, the loan will not be fully paid off at term.
Popular Mortgage Terms
A documentation rule where the borrower discloses income and its source but the lender does not verify the amount. ...
A letter from a lender verifying that the price and other terms of a loan have been locked. Borrowers who lock through a mortgage broker should always demand to see the lock commitment ...
The present value of a house, given the elderly owner's right to live there until she dies or voluntarily moves out, under FHA's reverse mortgage program. ...
An ARM on which the lender has the right to change the interest rate at any time, for any reason, by any amount, subject only to a requirement that the borrower be notified in advance. The ...
Assuming responsibility for someone else's payment obligation in the event that that party defaults. ...
Adjustable rate mortgages on which the interest rate is mechanically determined based on the value of an interest rate index. Indexed ARMs are distinguished from Discretionary ARMs, in that ...
The number of months for which the initial interest rate holds on an ARM. ...
The frequency of rate adjustments on an ARM after the initial rate period is over. The rate adjustment period is sometimes but not always the same as the initial rate period. As an example, ...
The period you must retain a mortgage in order for it to be profitable to pay points to reduce the rate. ...
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