Mortgage Terms and Their Definitions
If you wish to be more informed about mortgage terms, then this is for you. Here, you will see some common and not so common terms that you may hear when discussing mortgages either with your mortgage broker or your friends who also have mortgages themselves.
One term that you must know is Cumulative Interest which means that sum that is the total of all the interest payments you have ever made or all the interest payments that have added up through the life of the mortgage. This is considered as an incomplete way to measure all the cost of the credit to the borrower since it does not cover the cash that is paid up-front. It is also not adjusted for the money’s time value.
Next term you may have heard but do not know the meaning of is Current Index Value; which means the most recent version of the value index that has been published in order for adjustments to be made for the interest rates of an ARM that has been indexed.
Now this next term is admittedly not very official sounding but it does do the job of describing the thing which it was meant to describe well. That term is Deadbeat. Take a load of that huh? Anyway, deadbeats are those borrowers who do not pay their monthly mortgage payments. If you are a deadbeat, start paying up mister, or you could lose your property.
Next term is Debtaholic which means a borrower who is not able to handle the dents that he woes except of he goes on complete abstinence. Debtaholics are also considered as investment risks by investors.
Next term that you should know but not do is Default which means that a borrower has failed to honor his part of the contract. When you sign that contract, you make and agreement. If you do default on some payments and agreements, the lenders and the people in charge will allow you up to 90 days of delinquency or perhaps more.
And last but not the least the Demand Clause which means that clause in the contract that allows the lender to demand a payment from you at any time for any reason may it be reasonable or not.