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
See Interest Rate.
Rate caps
Limitations on the size of rate adjustments on an ARM, often expressed in a/b/c fashion: "a" is the maximum rate change at the first rate adjustment, "b" is the maximum at all subsequent adjustments, and "c" is the maximum increase over the initial rate during the life of the contract.
Rate protection
Protection for a borrower against the danger that rates will rise between the time the borrower applies for a loan and the time the loan closes. This protection can take the form of a "lock" where the rate and points are frozen at their initial levels until the loan closes; or a "float-down" where the rates and points cannot rise from their initial levels but they can decline if market rates decline. In either case, the protection only runs for a specified period. If the loan is not closed within that period, the protection expires and the borrower will either have to accept the terms quoted by the lender on new loans at that time, or start the shopping process anew.
Rate sheets
Tables of interest rates and points that lenders distribute daily to their loan officer employees or mortgage brokers.
Rate/point breakeven
The period you must retain a mortgage in order for it to be profitable to pay points to reduce the rate.
Rate/point options
All the combinations of interest rate and points that are offered on a particular loan program. On an ARM, rates and points may also vary- with the margin and interest rate ceiling
Recast payment
Raising or lowering the mortgage payment to the fully amortizing payment. Periodic payment-increase recasts are sometimes used on ARMs in lieu of or in addition to negative amortization caps. Payment reduction recasts arise when borrowers have made extra payments and need to have their payment reduced.
Referral fees
Payments made by service providers to other parties as quid pro quo for referring customers. For example, a title company provides something of value to a Realtor or lender for sending a customer who requires title insurance.
Paying off an old loan while simultaneously taking a new one. This may be done to reduce borrowing costs under conditions where the borrower can obtain a new loan at an interest rate below the rate on the existing loan. It may be done to raise cash, as an alternative to a home equity loan. Or it may be done to reduce the monthly payment.
Rent premium
An increment above the rent paid on a lease-to-own home purchase, which is credited to the purchase price if the purchase option is exercised, but which is lost if the option is not exercised.
Required cash
The total cash required of the home buyer to close the transaction, including down payment, points and fixed dollar charges paid to the lender, any portion of the mortgage insurance premium that is paid up-front, and other settlement charges associated with the transaction such as title insurance, taxes, etc. The total required cash is shown on the Good Faith Estimate of Settlement that every borrower receives.
The Real Estate Settlement Procedures Act, a Federal consumer protection statute irst enacted in 1974. RESPA was designed to protect home purchasers and owners shopping for settlement services by mandating certain disclosures, and prohibiting referral fees and kickbacks.
Retail lender
A lender who offers mortgage loans directly to the public. As distinct from a wholesale lender who operates through mortgage brokers and correspondents.
Reverse mortgage
A loan to an elderly home owner on which the balance rises over time, and which is not repaid until the owner dies, sells the house, or moves out permanently.
Right of rescission
The right of refinancing borrowers, under the Truth in Lending Act, to cancel the deal at no cost to themselves within 3 days of Closing.

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