- A type of mortgage loan where the lender offers a below-market interest rate in exchange for profit sharing when the property is sold. This is typically only done with private funds/lenders.
equity release mortgage, contingent interest
Related Terms and Acronyms
- Buy-down — Definition,
- When a borrower or a mortgage broker "buys down" a mortgage rate, they make an upfront payment to the lender in order to lower the mortgage rate. A similar effect can be achieved by making a lump sum payment at the beginning of a mortgage term.
- Buy-down Mortgage — Definition, Important,
- A home loan in which the lender charges below-market interest in exchange for discount points.
- Cooperative Mortgage — Definition, Important,
- A loan that allows the borrower to buy into a co-op project.
- Creative Financing — Definition,
- An innovative or unusual way of structuring a home loan that allows the buyer to buy the house.
- Housing-equity Partnership — Definition,
- An arrangement in which one buyer lives in a home and the other has an ownership stake as an investment. The partners split the capital gain after the property is sold.
- Interest Rate (IR) — Acronym, Very Important,
- The rate a lender charges an individual to borrow money.
- Loan — Definition,
- Letting another party use something of value temporarily.
- 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 Rate — Definition, Very Important,
➥ You can compare mortgage rates using this website by clicking 'Rates' above.
- The interest rate on a mortgage loan.
- Private Lender — Definition,
- A lender not associated with a traditional lender.
- Sub-prime Mortgage — Definition, Important,
- A mortgage loan that is granted to a borrower who is considered sub-prime (has a less-than-perfect credit report). Sub-prime borrowers have either missed payments on a debt or have made late payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may default on the loan.
- Teaser Rate — Definition,
- Often called the introductory rate, it is the below-market interest rate offered to entice customers to switch credit cards or lenders.