How Mortgages Work

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Across
  1. 2. A mortgage with a constant interest rate throughout the term of the loan.
  2. 5. A financial arrangement where a third party holds and regulates payment of funds required for two parties involved in a transaction.
  3. 7. Ratio A personal finance measure that compares an individual’s debt payment to his or her overall income.
  4. 10. The legal process by which a lender takes control of a property when the borrower fails to repay the loan.
  5. 12. The process of replacing an existing loan with a new loan that usually has better terms.
  6. 14. The cost of borrowing money, typically a percentage of the loan amount.
  7. 16. The process of spreading out a loan into a series of fixed payments over time.
  8. 17. History A record of a borrower’s responsible repayment of debts.
  9. 18. The difference between the market value of a property and the amount still owed on the mortgage.
  10. 20. Equity Loan A type of loan in which the borrower uses the equity of their home as collateral.
  11. 22. Payment An initial payment made when something is bought on credit.
  12. 23. Failure to repay a loan according to the terms agreed to in the promissory note.
Down
  1. 1. An individual or organization taking out a loan from a lender.
  2. 3. A legal document evidencing a person’s right to or ownership of a property.
  3. 4. The original sum of money borrowed in a loan.
  4. 6. A professional assessment of a property’s value.
  5. 8. A loan specifically for purchasing property where the property is collateral.Collateral - An asset that a borrower offers to a lender to secure a loan.
  6. 9. Costs Fees paid at the closing of a real estate transaction.
  7. 11. The process a lender uses to determine if the risk of offering a mortgage to a particular borrower under certain parameters is acceptable.
  8. 13. A mortgage with an interest rate that can change periodically.
  9. 15. Note A financial instrument that contains a written promise by one party to pay another party a definite sum of money.
  10. 19. An organization or individual that loans money to borrowers.
  11. 21. Rate An initial, temporarily low interest rate on an ARM.
  12. 24. Ratio A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.