Professional Documents
Culture Documents
WHAT IS A MORTGAGE?
By
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When
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There
MORTGAGE ORIGINATION
The
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For
MORTGAGE ORIGINATION
PROCESS
Someone
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The
The
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Price
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Fallout
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The
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Fixed-Rate,
Level-Payment, Fully
Amortized Mortgages
The basic idea behind the design of traditional
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Characteristics
of Traditional Mortgage:
Each monthly mortgage payment for a levelpayment, fixed-rate mortgage is due on first
of each month and consists of:
Interest of 1/12th of the fixed annual interest rate
times the amount of the outstanding mortgage,
and
A repayment of a portion of the outstanding
mortgage balance (Principal)
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There
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Another
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Adjustable-Rate
Mortgages
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Characteristics
of the Adjustable-Rate
Mortgage:
ARM calls for resetting the interest rate
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Balloon/Reset
Mortgages:
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Graduated-Payment
Mortgage
GPM is one whose nominal monthly
payments grow at a constant rate during the
life of the contract, thereafter levelling off.
The mortgage rate is fixed for the life of the
mortgage loan, despite the fact that the
monthly payments increase gradually. (Read
page 434)
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Price-Level-Adjusted
Mortgage
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Dual-Rate
Mortgage