A charge-off in real estate refers to the portion of principal and interest recognized as a loss when a loan is deemed uncollectible. Lenders resort to charge-offs when they perceive that further collection efforts on a delinquent account will not be fruitful.
Initial equity refers to the amount of down payment made by a buyer when purchasing a property. Initial equity does not include appreciation, mortgage amortization, or transaction costs.
A Loan Discount is a type of fee that some lenders charge at the origination of a loan to lower the interest rate charged during subsequent payments. It’s commonly known as discount points.
