Page 80 - Book6E

Buydown: with a buydown, the seller pays an amount to the lender so that the lender can give you a lower rate and lower payments, usually for an initial period in an ARM. The seller may increase the sales price to cover the cost of the buydown. Buydowns can occur in all types of mortgages, not just ARMs.
Cap, interest rate: a limit on the amount your interest rate can increase. Interest caps come in two versions: periodic adjustment caps, which limit the interest-rate increase from one adjustment period to the next, and lifetime caps, which limit the interest-rate increase over the life of the loan. By law, virtually all ARMs must have an overall cap.
Cap, payment: a limit on how much the monthly payment may change, either each time the payment changes or during the life
of the mortgage. Payment caps may lead to negative amortization because they do not limit the amount of interest the lender is earning.
Center for Responsible Lending (CRL): a nonprofit organization, research and policy group created to educate the public about finan- cial products and to push for policies that curb predatory lending.
Conversion clause: a provision in some ARMs that allows you to change the ARM to a fixed-rate loan at some point during the term. Conversion is usually allowed at the end of the first adjustment period. At the time of the conversion, the new fixed rate is generally set at one of the rates then prevailing for fixed-rate mortgages.
The conversion feature may be available at extra cost.
Credit CARD Act or the Credit Card Accountability, Responsibility, and Disclosure Act: addresses aspects of credit card costs and practices that are most probably unknown to the majority of consumers.
Dispute Resolution: credit card companies have charge back rights in certain situations in which they can charge the money back to a mer- chant for fraudulent purchases, especially those made online.
Glossary