Implied Warranty of Habitability
A legal doctrine that requires landlords to offer and maintain livable premises for their tenants. If a landlord fails to provide habitable housing, tenants in most states may legally withhold rent or take other measures, including hiring someone to fix the problem or moving out.
Additions to raw land such as buildings, streets, sewers, etc. that increase the value of the property.
To protect another person against loss or damage.
The published cost of money that serves as the minimum basis for determining the interest rate for an adjustable rate mortgage. Among the commonly used indices are the Prime Rate (Prime), the London Interbank Offering Rate (LIBOR), the Cost of Funds (COF) and the 1 year Treasury Bill (1 year T). The particular index is generally, though not always, selected based on how often an interest rate is supposed to adjust. Loans which allow monthly interest rate adjustments commonly use the Prime Rate. Loans that adjust semi-annually may use LIBOR. The 1 year Treasury and the Cost of Funds are often used for loans which adjust on an annual basis. There are other Treasury instruments which are used for 3 and 5 year adjustment periods. The interest rate of the loan is determined by adding a margin to the index. The size of the margin is typically a function of the index used and the credit worthiness of the borrower. Typical margins on a Prime Rate based loan would be 0.0 to 5.0 so that if the Prime Rate were 8.25% and the margin were 2.0 (typical for an “average” borrower), the interest rate would be 10.25% (8.25 + 2.0).
Initial Adjustment Interval
Is associated with an Adjustable Rate Mortgage (ARM), it is the time between changes in the interest rate and/or monthly payment, usually one, three, or five years. The adjustment periods are usually spelled out in your original loan documents.
When a seller accepts a mortgage for all or part of the sale, tax on the gain is paid as the mortgage principal is collected.
A document that states that insurance is temporarily in effect. Because the coverage will expire by a specified date, a permanent policy must be obtained before the expiration date.
A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (PMI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.
During one’s life.
Interest Accrual Rate
The percentage rate at which interest accrues on the mortgage. In most cases, it is also the rate used to calculate the monthly payments.
The percentage of the loan amount charged for borrowing money; i.e., the cost of the money expressed as a percentage.
A loan, including a construction loan, used when the property owner is unable or unwilliing to arrange permanent financing.
Internal Rate of Return (IRR)
The internal rate of return is a method of calculating rate of return. The term internal refers to the fact that the internal rate excludes external factors, such as inflation, the cost of capital, or various financial risks. It is also called the discounted cash flow rate of return. See this Wikipedia Page for a more thorough explanation.
Having made no valid will.