Chapter 10 Vocab Flashcards
Adjustable rate mortgage
a mortgage loan with the interest rate on the note periodically adjusted based on an index
Appraisal fee
a payment made to someone to evaluate how much a home is worth
Balloon Loan
a type of loan that doesn’t fully amortize over its term
Closing costs
fees for lawyers, credit checks, title searches, surveys, taxes, and the preparation of the documents
Conventional mortgage
a loan not guaranteed or insured by any government agency
Default
failure to repay a loan
Down payment
an initial payment made when something is bought on credit
Fixed mortgage rate
loan where the interest rate on the note remains the same through the term of the loan
Graduated payment mortgage
mortgage with low initial monthly payments which gradually increase over a specified time frame
Growing equity mortgage
a fixed rate mortgage on which the monthly payments increase over time according to a set schedule
Home equity loan
loan where the borrower uses the equity of his/her home as collateral
Interest only mortgage
amount of money paid for the use of the lender’s money
Lease
an agreement for the use of property such as a building or a vehicle, usually on an annual basis
Liability coverage
financial protection against accidents that cause bodily injury and property damage
Line of credit
amount of credit extended to a borrower
Mortgage
gives the lender the right to seize and sell the property if you fail to make payments
Personal loan
loans that are advanced on the basis of the borrower’s credit history and ability to repay the loan
Refinance
finance a loan again
Reverse mortgage
a financial agreement where a homeowner relinquishes equity in their home in exchange for regular payements
Second mortgage
a mortgage taken out on a property that is already mortgaged
Shared appreciation mortgage
the lender agrees as part of the loan to accept some or all payment in the form of a share of the increase in value
Subprime mortgage
loan granted to individuals with poor credit histories (<600)
Teaser rate
a low, adjustable introductory interest rate advertised for a loan/credit card to attract potential customers to obtain the service
Title insurance
covers loss of ownership interest in a property due to legal defects
