Collateral refers to a valuable asset that a borrower offers to a lender as a way to secure a loan. This asset provides security to the lender in the event the borrower defaults on the loan.
A provision in a mortgage that mandates the loan be paid in full when the property is sold. This clause protects lenders by ensuring the loan is not assumed by a potentially less creditworthy buyer.
In finance, a floor refers to the minimum interest rate set by the lender on a loan or other obligation. This ensures that the interest rate will not fall below a certain level, which provides a safety net for lenders' returns. It contrasts with a cap, which sets an upper limit on the interest rate.
