Math Midterm 2019

Cosigners

- people other than the borrower who promise the loan will be paid.

adjusted monthly income.

The buyer's gross monthly income minus any fixed monthly payments with more than 10 months remaining is known as the buyer's ...

gross monthly income

The buyer's monthly income before any deductions is called ...

Fixed installment loans

a fixed amount is paid for a fixed number of payments (Auto, student loans, mortgage).

Partial Payment

a payment that is less than the full amount owed and made prior to the due date.

Finance charges

any charges you pay on a loan besides the principal.

Security/Collateral

anything of value offered by the buyer in case they don't pay back the loan.

Points

interest prepaid by the buyer and may be used to reduce the stated interest rate the lender charges

Compound interest

interest that is computed on the principal and accumulated interest

homeowner's mortgage

long-term loan in which the property is pledged as a security for payment of the difference between the down payment and the sale price.

Interest

money the borrower pays to use the principal

Open installment loans

payment varies each month (credit cards)

Credit

the amount the lender will lend you

Principal

the original amount of the loan (not including interest)

Total installment price

the total amount paid for a loan

28/36 Rule

used by banks to determine if a buyer qualifies for a mortgage