Glossary of Mortgage Terms
For an adjustable-rate mortgage, the time period
between interest rate change dates, as stated in
the mortgage note.
A mortgage that permits the lender to periodically
adjust the interest rate on the basis of movement
in a specified index.
Gradual reduction of the mortgage debt through
regularly scheduled payments over the term of the
LIBOR (London Interbank
Offered Rate) index
An index used to determine interest rate changes
for certain ARM plans, based on the average
interest rate at which international banks lend to
or borrow funds from the London Interbank market.
The relationship between the loan amount and the
value of the property (the lower of the appraised
value or sales price), expressed as a percentage
of the property's value. This ratio is a major
determinant in assessing the comprehensive risk of