A commitment fee is a charge required by a lender to lock in specific terms on a loan at the time of application, ensuring that the terms agreed upon will be honored and the funds will be available when needed.
Equity represents the interest or value that an owner has in real estate over and above the liens or debts against it. It is calculated by subtracting the total liens from the market value of the property.
The face interest rate is the percentage interest specified on the loan documents, representing the nominal annual interest rate before accounting for additional fees or compounding periods. This term is often compared with the Annual Percentage Rate (APR) and the Effective Rate.
Interest in real estate can refer to both the cost associated with borrowing money to finance real estate transactions and the extent of ownership in a property.
A prepayment clause permits a borrower to pay off a loan before its maturity date, sometimes incurring a penalty for the privilege of early payment.
The amount owed on a debt, whether it is the original face amount or the remaining unpaid debt on a loan that has been partially amortized.
The Remaining Term refers to the amount of time left before a loan or mortgage reaches its maturity date. It represents the period remaining for the borrower to fulfill the debt obligation according to the contractual agreement.
In real estate, a 'spread' refers to several key financial differences, often pertaining to prices or interest rates, that can significantly impact transactions, investments, and profits.
A commitment made by a lender to make a sum of money available at specified terms for a specified period, subject to the payment of a standby fee by the borrower.
