A situation in which the borrower of a mortgage loan is late on payments. Beyond a certain point (usually 30 to 60 days), the mortgage loan holder may begin foreclosure proceedings.
A twist on the standard mortgage in which payments are made every other week, as opposed to the traditional payment schedule of once a month.
A type of financing in which one person may take over the mortgage from another. For example, Buyer 1 wants to buy a house, so he takes out a mortgage (borrows money from the bank to pay for the house). If Buyer 1 wants to sell the house to Buyer 2 before the mortgage is paid off, and the loan is an assumable mortgage, Buyer 2 may "step into the shoes" of Buyer 1 and take over the mortgage.
The date the interest rate changes on an adjustable-rate mortgage (ARM). On most ARMs, the rate starts out fixed at a discount for an initial period, such as five years. Then it's reset (typically upward) on the adjustment date to reflect current market rates. The rate continues to change on a regularly scheduled basis at each adjustment period.
For homeowners with an adjustable-rate mortgage (ARM), the scheduled period between changes in the interest rate. The adjustment period can be monthly, semi-annually, annually, and so forth.
An arrangement negotiated between a debtor and creditor as a way to take care of a debt, by paying it off or through loan forgiveness. Workouts are often created to avoid bankruptcy or foreclosure proceedings.
A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Short sales usually occur when the homeowner is facing foreclosure. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what is owed. (See also: deed in lieu of foreclosure)
A mortgage in which the lender gets a share of the equity of the home in exchange for providing a portion of the down payment. When the property is later sold, the lender is entitled to a portion of the proceeds.
The full payment of a mortgage, ending the loan.