Enter Zip, City, or County... i.e. orange,NY or 90019
Search Method:    regular time edocs

Resources > Glossary > Convertibility Clause

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

0-9  A  B  [C]  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z  
Common Terms 1   Common Terms 2

Convertibility Clause

Function: noun

Definition 1:
A clause in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified time frames after the loan originates. With a convertibility clause in a convertible ARM, the borrower has the opportunity to get an interest rate that is lower than what was available at the time that the loan was originated. A convertibility clause could save the borrower thousands of dollars should interest rates significantly decrease after the origination of the loan. The first opportunity to convert a loan generally does not occur until the loan is at least thirteen to thirty-six months old depending on the stipulations of the contract.

Thesaurus / Related Terms
Convertible ARM
Adjustable Rate Mortgage
Loan Origination Fee