CALCULATED INTEREST RATE
The calculated interest rate is the Current Index, plus the Margin, rounded
to the nearest one-eighth of one percentage point (0.125%). The Calculated Interest Rate is used to determine the Adjusted Interest Rate.
CAPACITY
Your ability to make your mortgage payments on time. This depends on your income and income stability (job history and security), your assets and savings, and the amount of your income each month that is left over after you’ve paid for your housing costs, debts and other obligations.
CHANGE DATE
The change date is the effective date of an adjustment to the interest rate,
referred to as the Interest Rate Adjustment Date by Ginnie Mae.
The date is:
- specified in Paragraph 5(A) of the ARM note, and
- not the date on which the monthly payments change.
CLOSING (CLOSING DATE)
The completion of the real estate transaction between buyer and seller. The buyer signs the mortgage documents and the closing costs are paid. Also known as the settlement date.
CLOSING AGENT
A person who coordinates closing-related activities, such as recording the closing documents and disbursing funds.
CLOSING COSTS
The costs to complete the real estate transaction. These costs are in addition to the price of the home and are paid at closing. They include points, taxes, title insurance, financing costs, items that must be prepaid or escrowed and other costs. Ask your lender for a complete list of closing cost items.
COLLATERAL
Property which is used as security for a debt. In the case of a mortgage, the collateral would be the house and property.
CONDOMINIUM
A unit in a multi-unit building. The owner of a condominium unit owns the unit itself and has the right, along with other owners, to use the common areas, but does not own the common elements such as the exterior walls, floors and ceilings or the structural systems outside of the unit; these are owned by the condominium association.
CREDIT REPORT
A document used by the credit industry to examine your use of credit. It provides information on money that you’ve borrowed from credit institutions and your payment history.
CREDIT SCORE
A computer-generated number that summarizes your credit profile and predicts the likelihood that you’ll repay future debts.
CREDITWORTHY
Your ability to qualify for credit and repay debts.
CURRENT INDEX
The current index is the most recently available Index published 30 calendar days before the Change Date.