Current Mortgage Rates: Richmond, VA
3.000% (3.001% APR) 30yrs
2.500% (2.617% APR) 15yrs
as of 06/18/21
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Glossary of Mortgage Terms

Search for glossary terms (regular expression allowed)
Term Main definition
A-credit
A Consumer with the best credit rating, deserving of the lowest prices that lenders offer. Most lenders require FICO score above 720.There is seldom any payoff for being above the A-credit threshold, but you pay a Penalty for being below it.
Acceleration Clause
A contractual provision that gives the lender the right to demand repayment of the entire loan balance in the event that the borrower violates one or more clauses in the note.
Accrued interest
Interest that is earned but not paid, adding to the amount owed. same as Negative amortization.
Adjustable Rate Mortgage (ARM)
A mortgage on which the interest rate, after an initial period.can be changed by the Lender. While ARMs in many countries aboard allow rate changes at the lender’s discretion (“discretionary ARMs”), in the US most ARMs base rate changes on a pre-selected interest rate index over which the lender has on a control. These are “indexed ARMs”. There is no discretion associated with rate charges on indexed ARMs.
Adjustment Interval
On an ARM, the time between changes in the interest rate or monthly payment. The rate adjustment interval is often displayed in x/y format, where "x" is the period until the first Adjustment’ and "y" is the adjustment period thereafter. For example, a 5/1 ARM is one on which the initial rate holds for 5 years, after which it is adjusted every year. The rate adjustment interval and the payment adjustment interval are the same on a amortization ARM, but may not be on a negative amortization ARM.
Affordability
A consumer's capacity to afford a house. Affordability is usually expressed in term of the maximum price the consumer could pay for a house and be approved for the mortgage required to pay that amount.
Agency
The legal requirement that one party in a relationship has a fiduciary obligation to the other.
Agreement of Sale
A contract signed by buyer and seller stating the term and condition s under which a property will be sold.
Alt-A
A mortgage risk categorization that falls between prime and sub-prime, but is closer to prime . Also referred to as 'A minus".
Alternative Documentation
Expedited and simpler documentation requirements designed to speed up the loan approval process. Instead of verifying employment with the applicant's employer and bank deposits with the applicant's bank, the lender will accept pay check stubs, W-2s and the borrower's original bank statements. Alternative documentation remains"full documentation" as opposed to the other documentation options.
Amortization
The repayment of principal from scheduled mortgage payments that exceed the interest due. The scheduled payment less the interest equals amortization. The loan balance declines by the amount of the scheduled payment , plus the amount of any extra payment. if the payment is less than the interest due, the balance rises, which is negative amortization.
Amortization schedule
A table showing the mortgage payment, broken down by interest and amortization, the loan balance, tax and insurance payments if made by the lender, and the balance of the tax/insurance escrow account.
Amount financed
On the Truth in lending form, the loan amount less “prepaid finance charged”, which are lender fees paid at closing. for example, if the loan is for $100,000 and the borrower pays the lender $4,000 in fees, amount financed is $96,000. A useless number.
Annual percentage rate
See APR
Application
A request for a loan that includes the information about he potential borrower, the property and the requested loan that the solicited lender need to make a decision. In a narrower sense, the application refers to a standardized application from called the “1003” which the borrower is obliged to fill out

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