# pricing_schema # pricing_schema Pricing schema refers to the method used by lenders to determine the interest rate and other fees associated with a mortgage loan. ## Properties | Property | Type | Definition | | --- | --- | --- | | `apr` | `decimal` | Annual Percentage Rate (APR) represents the total cost of borrowing money over the life of the loan and is expressed as a percentage. The APR includes not only the interest rate, but also any points, origination fees, closing costs, and other charges associated with the loan. In general, the APR will be higher than the interest rate, since it includes the additional fees and charges associated with the loan. | | `closing_cost` | `decimal` | Pricing schema closing costs define how much money a borrower will need to close on a mortgage. Closing costs refer to the fees and expenses that a borrower must pay at the closing of a mortgage loan. | | `discount` | `decimal` | A pricing schema discount is a reduction in the interest rate offered on a mortgage loan, typically in exchange for paying an upfront fee known as a discount point. Discount points are a form of prepaid interest that a borrower can pay at closing to reduce the interest rate on the mortgage loan. One discount point typically equals 1% of the loan amount and can reduce the interest rate by 0.125% to 0.25%, although the exact reduction may vary depending on the lender and loan program. | | `first_year_monthly_payment` | `decimal` | First year monthly payment refers to the amount of money that a borrower must pay each month during the first year of their mortgage loan. The first-year monthly payment will depend on several factors, including the loan amount, interest rate, term, and any upfront costs, such as closing costs or prepaid expenses for property taxes and insurance. In some cases, lenders may offer a lower introductory interest rate or other incentives during the first year of the loan, which can result in a lower first-year monthly payment. | | `monthly_insurance` | `decimal` | Monthly insurance refers to the cost of mortgage insurance, which is an insurance policy that protects the lender in case the borrower defaults on the loan. Mortgage insurance is typically required when the borrower has a down payment of less than 20% of the home's purchase price. The monthly mortgage insurance premium is typically added to the borrower's monthly mortgage payment. | | `piti` | `decimal` | PITI stands for Principal, Interest, Taxes, and Insurance. PITI is a commonly used pricing schema in the mortgage industry to calculate the total monthly payment that a borrower will need to make on a mortgage loan. | | `price` | `decimal` | Price refers to the total cost of borrowing money for a mortgage loan. The price includes not only the interest rate charged on the loan but also any fees and charges associated with the loan, such as points, origination fees, and closing costs. | | `pricing_schema_identifier` | `string` | A pricing schema identifier is a unique identification number assigned to a mortgage pricing schema. | | `principal_and_interest` | `decimal` | A mortgage pricing schema that separates the mortgage payment into principal and interest is a way of structuring the payment so that a portion of the payment goes toward paying off the principal balance of the loan, and another portion goes toward paying the interest charged on the outstanding balance. In this schema, the principal is the original amount borrowed, and the interest is the fee charged by the lender for the use of the borrowed money. The mortgage payment is typically structured to pay off both the principal and interest over the life of the loan, with a greater proportion of the payment going towards interest at the beginning of the loan term and a greater proportion going towards principal as the loan matures. | | `rate` | `decimal` | Rate refers to the interest rate at which the borrower will be charged interest on the outstanding balance of the loan. The interest rate does not take into account any fees or charges associated with the loan. In general, the interest rate will be lower than the annual percentage rate (APR) will be higher than the interest rate, since it does not include the additional fees and charges associated with the loan. | | `rebate` | `decimal` | Rebate refers to a discount or credit that a lender offers to a borrower as an incentive to select a particular mortgage pricing option. It allows lenders to offer borrowers lower interest rates or fees in exchange for selecting a particular mortgage pricing structure. | | `second_year_monthly_payment` | `decimal` | Second year monthly payment refers to the amount of money that a borrower must pay each month starting from the second year of the mortgage loan term. For fixed-rate mortgages, the monthly payment for a mortgage loan will remain the same throughout the entire term of the loan. However, some adjustable-rate mortgages (ARMs) have an initial fixed-rate period, after which the interest rate and monthly payment can change based on market conditions. Therefore, if a mortgage loan has an adjustable interest rate with an initial fixed-rate period of one year, the second-year monthly payment will depend on the current market interest rate at the end of the initial fixed period. The monthly payment may increase or decrease based on the interest rate at that time, which can result in a higher or lower payment amount for the borrower. | | `third_year_monthly_payment` | `decimal` | Third year monthly payment refers to the amount a money that a borrower must pay each month to repay a mortgage loan during the third year of the loan term. The third year monthly payment can be calculated based on the loan amount, interest rate, and amortization term of the mortgage loan. However, the interest rate and other terms of the loan may change over time, particularly if the loan has an adjustable-rate mortgage (ARM) feature. In this case, the third year monthly payment would depend on the interest rate at that time, which may be higher or lower than the initial rate. | | `total_monthly_payment` | `decimal` | Total monthly payment refers to the amount of money a borrower must pay each month to repay a mortgage loan, including principal and interest, as well as any escrow payments for property taxes and homeowners insurance. | ## Referenced by - `mortgage_application`