Mortgage Glossary - S
Definitions of Mortgage Terms
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- Second Mortgage - A mortgage on property that has a lien position behind the first mortgage.
- Seller's Market - The condition when buyers significantly outnumber sellers, driving prices up.
- Shared Appreciation Mortgage- A home loan in which the lender offers a below-market interest rate in exchange for sharing in the profit when the home is sold.
- Simple Interest - Interest computed only on the principal balance, without compounding.
- Simple Interest Loan - A simple interest loan is one where you only pay interest on the original prinicipal and not on the interest that has accrued.
- Standard Payment Calculation - A method of figuring out how much monthly payments should be, based on the beginning loan balance, the term and the interest rate.
- Step Rate Mortgage - A fixed-rate home loan on which payments are lower at the beginning, typically for two years, and which then rise.
- Subprime Borrower - A borrower with a less-than-perfect credit report due to late payments or a default on debt payments. Lenders often grade them based on the severity of past credit problems, with categories ranging from "A-" on down to "D" or lower.
- Subprime Mortgage - A mortgage granted to a borrower considered subprime, that is, a person with a less-than-perfect credit report. Subprime borrowers have either missed payments on a debt or have been late with payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may run into trouble or default.