Adjustable Rate Mortgage (ARM) Financial Glossary

What is it? A mortgage with an interest rate that can change based on changes in a specified index.

Finance Term Definition Added By: Faith

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Other Similar Finance Terms:

Financial Term Unsecured is A loan where no collateral or security is given or charged to the lender. Unsecured lending is viewed as higher risk than secured lending and interest rates are generally higher to reflect this.

Financial Term Commitment is An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to compliance with stated conditions.

Financial Term prepaids is Expenses that are capitalized as assets on a firms financial statements because they will be charged against activities in the near future rather than past activities. Also called prepaid expenses, prepaid assets or prepaid items. For example, if insurance premiums for the next six months are paid today, the amount paid may be shown as a pre- paid asset. The asset in that example would then be reduced to zero over the following six months by recognizing one-sixth of the amount as an expense in each of next six months. Insurance, taxes, and subscriptions are common prepaid expenses.

Financial Term Skippayment Lease is A lease that contains a payment stream requiring the lessee to make payments only during certain periods of the year.

Financial Term Broker is A person or firm that charges a fee or commission to act as an intermediary between buyers and sellers of securities or property.