Related Words

Amortization: Amortization is payments of debt in equal instalments of principal and interest, rather than interest only payments.

Targeted Repurchase: Bonds offered as a tranche class of some CMOs, according to a sinking fund schedule. They differ from PAC bonds whose amortization is guaranteed as long as prepayments on the underlying mort . . . View Full Definition

Reported Factor: The pool factor as reported by the bond buyer for a given amortization period.

Payment Cap: A Payment Cap is the maximum amount for a payment under an Adjustable Mortgage Loan, regardless of the increase in the interest rate. If the payment is less than the interest alone, negative . . . View Full Definition

Fungibility: Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. A similar term increasingly used is fun . . . View Full Definition

Rollover Loan: A loan that includes a call date earlier than its normal amortization period, also called a renegotiable rate loan or a bullet loan.

Negative Amortization: When your loan principal increases rather than decreases because your monthly payment isn’t enough to cover the loan interest, that’s called negative amortization. This can happen if you hav . . . View Full Definition

Free Cash Flow: A business's free cash flow statement may differ significantly from its cash flow statement. The cash flow statement generally represents earnings before interest, taxes, depreciation, and a . . . View Full Definition

Amortization Factor: The pool factor implied by the scheduled amortization assuming no prepayments.

Graham And Dodd Method Of Investing: A type of stepped-payment loan in which the borrower's payments are initially lower than those on a comparable level-rate mortgage. The payments gradually increase over a predetermined perio . . . View Full Definition