Payment Shock
Definition of "Payment Shock"
A very large increase in the payment on an ARM that may surprise the borrower. The term is also used to refer to a large difference between the rent being paid by a first-time home buyer and the monthly housing expense on the purchased home.
Popular Mortgage Terms
The sum of all interest payments to date or over the life of the loan. This is an incomplete measure of the cost of credit to the borrower because it does not include upfront cash ...
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. ...
The party who services a loan, who may or may not be the lender who originated it. ...
An interest rate index that is used on some ARMs. ...
A plan purporting to protect FHA homebuyers against property defects. ...
The number of months for which the initial interest rate holds on an ARM. ...
On an ARM, the assumption that the value of the index to which the interest rate is tied does not change from its initial level. ...
Wondering who is this Fannie Mae person that your real estate agent always mentions when the subject about mortgage is brought up? Fannie Mae is not a person, nor a Woody Allen female ...
Compiling and maintaining the file of information about the transaction, including the credit report, appraisal, verification of employment and assets, and so on. Mortgage brokers usually ...
Have a question or comment?
We're here to help.