Glossary Letter: R

A rate lock or a lock-in is an agreement between a borrower and a lender to secure a specific interest rate for a set period during the mortgage application process. This usually ranges from 30 to 60 days. This protects the borrower from fluctuations in interest rates, ensuring the agreed-upon rate remains unchanged until closing,… Continue reading Rate Lock

A reverse mortgage is a type of loan that allows homeowners, typically aged 62 or older, to convert a portion of their home equity into cash without selling their property. Unlike traditional mortgages, where the borrower makes payments to the lender, with a reverse mortgage, the lender makes payments to the borrower. The loan is… Continue reading Reverse Mortgage

A retail mortgage is a home loan provided directly to individual borrowers by financial institutions, such as banks, credit unions, or mortgage companies. Unlike wholesale mortgages, which are offered through intermediaries, retail mortgages involve direct interaction between the lender and the borrower. These loans are tailored to meet the specific needs of homebuyers, offering various… Continue reading Retail Mortgage

Residual value, also known as salvage value, is the estimated worth of an asset at the end of its useful life or lease term. This value reflects what the asset can be sold for after it has been fully depreciated or used. In the context of loans, particularly equipment financing or leasing, residual value is… Continue reading Residual Value

A renovation loan is a type of financing that provides funds for both the purchase or refinancing of a property and the costs of renovating or improving it. These loans are popular among homebuyers and homeowners looking to enhance their property’s value. Renovation loans typically combine the mortgage and renovation costs into a single loan… Continue reading Renovation Loan

A repayment plan outlines the structured schedule and terms for paying off a debt over time. It is typically established between a lender and borrower to ensure the timely and complete repayment of a loan or credit obligation. The plan details the amount of each installment, the frequency of payments (e.g., monthly, bi-weekly), the duration… Continue reading Repayment Plan

The redemption period refers to a specific time frame after a property has been foreclosed upon, during which the original borrower has the right to reclaim or “redeem” their property. This period varies by jurisdiction and loan type. During this time, the borrower can pay off the entire loan balance, including principal, interest, and any… Continue reading Redemption Period

The repayment period is the duration over which a borrower agrees to repay a loan. It begins when the loan is disbursed and ends when the final payment is made, encompassing the total time allowed for the borrower to fulfill their debt obligation. The repayment period is critical in determining the amount of each installment,… Continue reading Repayment Period

A Rehabilitation Loan refers to a financial product specifically designed to fund the renovation, repair, or improvement of a property. These loans are often used by homeowners or real estate investors to rehabilitate older or distressed properties that require significant upgrades to improve livability, safety, or market value. Unlike traditional home loans, which primarily finance… Continue reading Rehabilitation Loan

Refinancing is the process of replacing an existing loan with a new one, typically to obtain better terms such as a lower interest rate, reduced monthly payments, or a different loan duration. For example, homeowners often refinance their mortgages to take advantage of favorable market conditions, access equity, or switch from an adjustable-rate to a… Continue reading Refinance