The scheduled mortgage payment refers to the amount that the borrower is obligated to pay for each repayment period.
The calculation of this payment amount factors in the principal, interest costs, mortgage insurance, financing points, etc.
After adding all the costs, the amortization table should show clearly what is the scheduled home loan payment that the borrower has to commit to.
Rate protection is the protection offered to a borrower by the lender against any rise in interest rates between the time of application and loan closing.
Because it would be unethical to quote a mortgage applicant a specific interest rate and later charge a higher one at closing, rate protection helps to eliminate such situations which can potentially lead to the involvement of the FTC.
This is despite the possibility of the costs of credit which a lender would incur should interest rates rise exponentially when a borrower is in the midst of the application process.
No self-respecting adult would walk into a mortgage fully knowing that he will not be able to meet it’s debt obligations over the short or long term.
But ever so often, people run into financial trouble for one reason or another.
What’s shocking is that many people choose to do nothing even when they can see a personal financial storm brewing over the horizon, getting ever so close with each passing day.
Delinquency refers to the situation that arise where a borrower is more than 30 days late with a scheduled payment date.
Care must be taken to avoid confusing delinquency with default.
The default status is usually reserved for borrowers who are over 90 days late with payment, and the lender gives it a status of default.