What Is a Reverse Mortgage Initial Principal Limit? A reverse mortgage initial principal limit is the amount of money that a reverse mortgage borrower can receive from the loan. The initial principal limit depends on the borrower’s age at the time of application, the loan’s interest rate, and the home’s appraised value. Key Takeaways A
What Is a Reverse Mortgage Net Principal Limit? A reverse mortgage net principal limit is the amount of money that a reverse mortgage borrower can receive from a loan once it closes after accounting for its closing costs. The net principal limit can depend on several factors centered around the home’s equity value and how
What Is a Reverse Repurchase Agreement (RRP)? A reverse repurchase agreement (RRP), or reverse repo, is the sale of securities with the agreement to repurchase them at a higher price at a specific future date. A reverse repo refers to the seller side of a repurchase agreement (RP), or repo. These transactions, which often occur
What Is Return on Total Assets? Return on total assets (ROTA) is a ratio that measures a company’s earnings before interest and taxes (EBIT) relative to its total net assets. It is defined as the ratio between net income and total average assets, or the amount of financial and operational income a company receives in
What Is a Returned Payment Fee? A returned payment fee is a one-time penalty charged by a bank when a customer bounces a check. The bank sends the customer a message indicating that a check has been returned unpaid “due to non-sufficient funds” in the account. Depending on the bank, this fee can be between $25 and
What Is Return on Market Value of Equity (ROME)? The term “return on market value of equity” (ROME) refers to a measure used by analysts and investors to compare the performance and value of companies of different sizes and values. Professionals use the return on market value of equity to identify companies that generate positive
What Is Return of Capital (ROC)? Return of capital occurs when an investor receives a portion of their original investment that is not considered income or capital gains from the investment. Note that a return of capital reduces an investor’s adjusted cost basis. Once the stock’s adjusted cost basis has been reduced to zero, any
What Is Return on Assets (ROA)? The term return on assets (ROA) refers to a financial ratio that indicates how profitable a company is in relation to its total assets. Corporate management, analysts, and investors can use ROA to determine how efficiently a company uses its assets to generate a profit. The metric is commonly
DEFINITION of Return-on-Capital Gain A return-on-capital gain is a return that one receives from an increase in the value of a capital asset (investment or real estate). The-return-on-capital gain is the measure of the investment gain for an asset holder, relative to the cost at which an asset was purchased. More specifically, return-on-capital gains are a measure
What Is Return on Equity (ROE)? Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders’ equity. Because shareholders’ equity is equal to a company’s assets minus its debt, ROE is considered the return on net assets. ROE is considered a gauge of a corporation’s profitability and how
