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Simple English definitions for legal terms
rollover mortgage
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A quick definition of rollover mortgage:
A mortgage is a way to borrow money to buy a house or property. It's like a promise to pay back the money you borrowed, with interest, over a certain amount of time. There are different types of mortgages, like ones where the interest rate can change or ones where you only pay interest at first. If you don't pay back the money, the lender can take your property away.A more thorough explanation:
A rollover mortgage is a type of adjustable-rate mortgage where the lender can adjust the interest rate periodically based on market conditions. The mortgagee must renegotiate the terms of the mortgage every three to five years.
- John has a rollover mortgage on his house. His interest rate is adjusted every three years based on market conditions.
- Sarah's mortgage lender requires her to renegotiate the terms of her mortgage every five years. She has a rollover mortgage.
These examples illustrate how a rollover mortgage works. The mortgagee must renegotiate the terms of the mortgage periodically, which can result in changes to the interest rate and monthly payments.