Scheduled Mortgage Payment
The amount the borrower is obliged to pay each period, including interest, principal, and mortgage insurance, under the terms of the mortgage contract. Paying less than the scheduled amount results in delinquency; paying more results in a partial prepayment. On FRMs and ARMs that do not allow negative amortization, the scheduled payment is the fully amortizing payment, unless the loan has an interest-only option for some period at the beginning, such as five or 10 years. In that case, the scheduled payment is the interest-only payment until the end of the interest-only period, when it becomes the fully amortizing payment. On ARMs that allow negative amortization, the scheduled payment may be determined by the lender in a number of ways, which can change over the life of the instrument. Some of these ARMs also allow the borrower to elect from alternative payment plans during the early years of the loan. Whatever form the scheduled payment takes in the early years, however, at some point it becomes the fully amortizing payment.
Popular Mortgage Terms
The lowest interest rate possible under an ARM contract. Floors are less common than ceilings. ...
The monthly index is a ratio of monthly interest costs to total funds, expressed as a percentage. Annualized interest, the numerator, is calculated by multiplying the deposit balances at ...
The assumption that the index value to which the interest rate on an ARM is tied follows the same pattern as in some prior historical period. In meeting their disclosure obligations in ...
A mortgage on which half the monthly payment is paid every two weeks. This results in 26 payments per year, which is the equivalent of 13 monthly payments rather than 12. Because of the ...
Fees assessed by lenders when payments are late. Late fees are usually 4% or 5% of the payment. A borrower with a 6% mortgage for 30 years who pays a 5% late charge every month raises his ...
Protection for a borrower against the danger that rates will rise between the time the borrower applies for a loan and the time the loan closes. Rate protection can take the form of a ...
The minimum allowable ratio of down payment to sale price on any loan program. If the minimum is 10%, for example, it means that you must make a down payment of at least $10,000 on a ...
The period until the last payment is due. The maturity is usually but not always the same as the period used to calculate the mortgage payment. ...
Prices that assume a more or less standardized set of transaction characteristics that generally command the lowest prices. Generic prices are distinguished from transaction specific ...
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