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Glossary (click letters)

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YIELD MAINTENANCE – a prepayment premium that allows investors to attain the same yield as if the borrower made all scheduled mortgage payments until maturity. Yield maintenance premiums are designed to make investors indifferent to prepayments and to make refinancing unattractive and uneconomical to borrowers.

YIELD TO AVERAGE LIFE – yield calculation used, in lieu of "Yield to Maturity" or "Yield to Call," where books are retired systematically during the life of the issue, as in the case of a "Sinking Fund," with contractual requirements. Because the issuer will buy its own bonds on the open market to satisfy its sinking fund requirements if the bonds are trading below Par, there is, to that extent, automatic price support for such bonds; they therefore tend to trade on a yield–to–average–life basis.

YIELD TO MATURITY (YTM) – concepts used to determine the rate of return an investor will receive if a long–term, interest–bearing investment, such as a bond, is held to its maturity date. It takes into account purchase price, redemption value, time to maturity, coupon yield and the time between interest payments. Recognizing time value of money, it is the discount rate at which the present value of all future payments would equal the present price of the bond (also referred to as "internal rate of return"). It is implicitly assumed that coupons are reinvested at the YTM rate. YTM can be approximated using a bond value table (also referred to as a "bond yield table") or can be determined using a programmable calculator equipped for bond mathematics calculations.

YIELD – the rate of return on a security, taking into consideration annual interest payments, purchase price, redemption value, and the time remaining until maturity.

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Andrew, Sadie and your team did a great job on Dan and Annabelle’s loan, and I thank you very ...

- Scott Liming | Iron Oak Mortgage

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