Closed Mortgage

Definition

  • A mortgage product that has a strict repayment schedule. Payment amounts are pre-set with optional limited lump sum payments and payment increases as detailed in the loan agreement.

Synonyms
set mortgage, unbreakable, non negotiable

Related Terms and Acronyms

  • Fixed Rate Mortgage (FRM) Acronym, Very Important,
    • A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination.
  • Interest Rate Differential (IRD) Acronym, Very Important,
    • The penalty one pays for breaking a mortgage.
  • Mortgage (mtg) Abbreviation, Important,
    • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • Mortgage Application Definition, Very Important,
    • A document in which a prospective borrower details his or her financial situation to qualify for a loan.
  • Open Mortgage Definition, Important,
    • A mortgage that can be paid off prior to maturity without penalty.
  • Penalty Definition,
    • In mortgage terms, a penalty is a set rate or length of time the penalty will be charged based on the remaining loan amount. The penalty is usually three months interest or interest rate differential.
  • Pre-payment Definition,
    • Applying additional payments towards the balance of a mortgage loan.
  • Pre-payment Clause Definition,
    • A clause that stipulates the amount of principal a borrower may prepay ahead of schedule without penalty as well as the prepayment penalty for larger prepayments.
  • Pre-payment Penalty Definition,
    • A lender's charge to the borrower for paying off the loan before the end of the term.
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