ACCELERATION CLAUSE - a provision in a promissory note or financing instrument which renders the remaining principal balance of the loan immediately due and payable upon default in any stipulated installment.
AMORTIZATION - the periodic payment which includes principal and interest.
AUTOMATIC REDEMPTION CLAUSE - a provision in a blanket mortgage (mortgage covering two or more properties) which releases a property from the mortgage upon payment of its loan value.
BALLOON PAYMENT - the final payment in an installment plan which is bigger than the previous installments and which liquidates the entire obligation.
BREAK-EVEN POINT - the amount of rent or the occupancy level to pay operating expenses and debt service.
BUYER’S EQUITY - the differences between contract price and loanable amount.
BUYER’S FULL DOWN PAYMENT - is buyer’s equity plus the miscellaneous expenses such as title transfer, mortgage registration, fire insurance, mortgage redemption insurance, etc.
COMMUNITY MORTGAGE PROGRAM - a financing scheme under the unified home lending program to enable residents in depressed areas to acquire their lot by organizing themselves into a cooperative.
DEFEASANCE CLAUSE - a provision in a mortgage contract which releases the property from encumbrance when the mortgaged obligation is fully paid.
ESCALATION CLAUSE - stipulation in a promissory note authorizing periodic increase of interest rate, or a provision in a long-term lease authorizing periodic increase of rental.
LOAN VALUE - the value of property which is a certain percentage of its market value which the bank is willing to lend with only the property as security.
OPEN-END MORTGAGE - a type of mortgage loan which permits borrowing additional funds against the same collateral.
TRUTH IN LENDING ACT - a law that requires lenders to report or disclose the cost of credit in terms of the annual percentage rate.
