Annual Debt Service refers to the required annual principal and interest payments for a loan. In corporate finance, it is the cash required in a year for payments of interest and current maturities of principal on outstanding debt.
An Annual Mortgage Constant is a measurement used in real estate to compare the annual debt service to the original loan principal amount. It is used to determine the efficiency of a mortgage from a borrower's perspective.
Debt service refers to the cash required in a given period, usually one year, for payments of interest and current maturities of principal on outstanding debt. This includes obligations from mortgage loans, corporate bond issues, and government bonds. Understanding debt service is crucial for assessing the financial stability and repayment ability of an individual or entity.
The Mortgage Constant is the percentage ratio between the annual debt service and the loan principal.
Negative amortization is an increase in the outstanding balance of a loan resulting from the failure of periodic debt service payments to cover the required interest charged on the loan.
Refunding refers to the process of issuing new securities to retire existing ones, aiming to extend the maturity period or reduce the cost of debt service, particularly in finance. In merchandising, it describes returning money to a dissatisfied customer.
A mutual effort by a property owner and lender to avoid foreclosure or bankruptcy following a default. It generally involves a substantial reduction in the debt service burden during an economic downturn.
