| Term |
Definition |
| Index |
A published interest rate
against which lenders measure the difference between the current
interest rate on an adjustable rate mortgage and that earned by
other investments (such as one- three-, and five-year U.S. Treasury
Security yields, the monthly average interest rate on loans closed
by savings and loan institutions, and the monthly average
Costs-of-Funds incurred by savings and loans), which is then used to
adjust the interest rate on an adjustable mortgage up or down.
|
| Interest |
A charge paid for borrowing
money. Interest is usually expressed as a percentage of the amount
borrowed or interest rate. |
| Intro Period |
The timeframe in which a
special intro rate may be in effect. After the intro period ends,
the interest rate will usually increase. |
| Intro Rate |
Introductory rates are
usually set below normal interest rates and may be offered only for
a short period at the beginning of the loan or credit line. Lenders
may use this special rate to attract borrowers. After a set
timeframe, the interest rate will usually increase.
|
