Current Mortgage Rates: Richmond, VA
2.750% (2.807% APR) 30yrs
2.125% (2.130% APR) 15yrs
as of 09/23/21
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Building on Trust™


Glossary of Mortgage Terms

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Term Main definition
Par Rate
The mortgage interest rate at zero points. In the secondary market, it is the security rate that trades at a price of 100.
Partial prepayment
Making a payment larger than the scheduled payment as a way of paying off the loan earlier.
Payment adjustment interval
The period between payment changes on an ARM, which may or may not be the same as the interest rate adjustment period. Loans on which the payment adjusts less frequently than the rate may generate negative amortization.
Payment decrease cap
The maximum percentage decrease in the payment on an ARM at a payment adjustment date.
Payment increase cap
The maximum percentage increase in the payment on an ARM at a payment adjustment date. A 7.5% cap is common.
Payment period
The period over which the borrower is obliged to make payments. On most mortgages, the payment period is a month, but on some it is biweekly.
Payment power
A program begun by Fannie Mae in 2003-4 that allows a borrower to skip up to 2 mortgage payments in any 12 month period, and up to 10 over the life of a loan. See Mortgage Payment Flexibility Under "Payment Power" and How Would a Truly Flexible Mortgage Work?
Payment rate
The interest rate used to calculate the mortgage payment, which is usually but not necessarily the interest rate.
Payment shock
A very large increase in the payment on an ARM that may surprise the borrower. Also used to refer to a large difference between the rent being paid by a first-time home buyer, and the monthly housing expense on the purchased home.
Payoff month
The month in which the loan balance is paid down to zero. It may or may not be the term.
Per diem interest
Interest from the day of closing to the first day of the following month. In some cases, however, the borrower can get a credit at closing by making the first payment a month earlier.
Periodic refinancing
An ill-advised scheme to tap into equity for cash advances through periodic refinancing
Permanent buy down
Paying points as a way of reducing the interest rate.
Pick a Payment ARM
Same as Flexible Payment ARM.
Piggyback mortgage
A combination of a first mortgage for 80% of property value, and a second for 5%, 10%, 15%, or 20% of value. These combinations are designated as 80/5/15, 80/10/10, 80/15/5, and 80/20/0, respectively. Piggybacks are a substitute for mortgage insurance for borrowers who cannot put 20% down.

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