Annual Debt Service refers to the total annual amount of principal and interest payments required to repay a loan.
An Option ARM (Adjustable-Rate Mortgage) is a type of mortgage loan that allows borrowers to select from multiple payment options each month, enabling flexibility based on financial circumstances. These payment options typically include fully amortizing payments, interest-only payments, and minimum payments that can lead to negative amortization.
Servicing in real estate refers to the administration of a mortgage loan, encompassing activities such as billing, payment collection, and filing reports. This can also extend to loan analysis, default followup, and managing tax and insurance escrow accounts. Typically, mortgage bankers perform these tasks for a fee after the loans are sold to investors.
