How Mortgages Work

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