Term
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Definition
| Requires that borrower pay interest only payment during the loan term and then pay the full loan amount in one lump sum at the end of the loan term. |
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Term
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Definition
| Require equal periodic payments compsed of both interest and principal. Principal balance of the loan decreases with each payment made. |
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Term
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Definition
| A loan is repaid in full before the full term of the loan has expired. |
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Term
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Definition
| Retiring the funds of an existing loan with the proceeds of a new loan for the same property. |
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Term
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Definition
| The charges of a loan expressed as a percentage of the loan amount. One discount point is equal to 1% of the loan amount. |
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Term
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Definition
| The same as discount points only expressed in a dollar amount rather than a percentage of the loan. These charges cover the lender's cost of processing the loan application, obtaining credit reports, and other costs associated with the loan's origination. |
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Term
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Definition
| The actual cost of borrowing funds from a lender, expressed as an annual rate, after consideration of discount points and origination fees. |
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