Payment Adjustment Period : the minimum interval between successive adjustments of payments on an ARM or GPM
Payment Cap : a limit on the size of
payments on ARMs
PMI : private mortgage insurance; insurance against loss from default on high loan-to-value conventional loans
Points : a point is one percent of a loan amount; also called discount points, they are charged by lenders in order to increase the yield on loans with lower than market interest rates
Promissory Note : written evidence of a debt
Purchase Money Loan : a loan made by a lender or a seller to a buyer, and used to finance a purchase of property
Qualifying : the process of checking to make sure that 1) a borrower is not likely to default, and 2) a property is worth enough to satisfy the debt if the borrower does defaultUnderwriting : the process of evaluating a loan application; the underwriter is the one who approves the loan
Verification of Deposit : a form sent by a lender to a bank requesting verification of a borrower's deposit(s) at the bank
Real Estate Contract : an installment sales contract for the purchase of real estate
Rearmotization / Recast : recalculation of level payments for a loan, necessitated by either a change in the loan term or an increase in the loan balance due to negative armotization
Reserve Requirement : the percentage of a bank's deposits that may not be loaned out by the bank
Secondary Financing : money borrowerd from any source to pay a portion of the required downpayment or settlement costs of a loan
Securities : instruments, such as mortgages and trust deeds, that pledge assets as security for a debt
Servicing : the process of collecting loan payments, keeping records and handling defaults
