| Amortization | Making periodic installments to gradually pay off a mortgage. |
| Appraisal | An assessment or estimate of a property's value. |
| Annual Percentage Rate | The yearly cost of interest calculated by taking the average compound interest rate over the term of the credit. |
| Balloon Payment | The final payment on a mortgage, which can be dramatically larger that previous payments. |
| Broker | An agent who makes arrangements for the sale of a property on behalf of the seller. |
| Adjustable Rate Mortgage | A mortgage with an adjustable interest rate. It adjusts periodically up or down with the movement of a specified index. |
| FHA Loan | A loan that is insured with the Federal Housing Administration |
| Reverse - annuity Mortgage | Also called reverse mortgage or home equity conversion mortgage. An arrangement in which a homeowner borrows against the equity in their home and receives regular monthly payments from the lender. These payments from the lender are tax free. |
| Commercial Mortgage | A loan which is made on commercial (non residential) real estate collateral,
in which a mortgage is given to secure payment of principal and interest.
|
| Interest Only Mortgage | During the term of an Interest only mortgage, payments are only made
to cover the cost of interest charges. At the end of the mortgage term
or when the property is sold the full amount borrowed will have to be
repaid. |
| Ernest Money | Ernest Money is money that is put down by a potential buyer to show
that they are serious about purchasing the home. If the offer is accepted
it becomes part of the down payment. It is returned if the offer is rejected,
or is forfeited if the buyer pulls out of the deal. |
| Fannie Mae | The Federal National Mortgage Association is a congressionally chartered,
private stockholder -owned company. They purchase residential mortgages
and convert them into securities for sale to investors; by purchasing
mortgages, Fannie Mae supplies funds that lenders may loan to potential
homebuyers |
| Warranty Deed | A document that allows you to transfer title to real estate. With a
warranty deed, the person guarantees that the title being transferred
is clear (free of any encumbrances). A warranty deed is used in most real
estate deed transfers and offers the greatest protection of any deed.
|
| Fixed Rate Mortgage | A mortgage on which the interest rate is specified in the loan contract
and remains the same throughout the term of the mortgage. |
| Amenity | A feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use. Such as a swimming pool or garden. |
| Amortization | Repayment of a mortgage loan through monthly installments of principal and interest. The amount that you pay each month is based on a schedule that will allow you to own your home at the end of a specific time period (for example, 15 or 30 years) |
| Application | This is a form that is used to record important information about the potential borrower necessary to the underwriting process. It is the first step in the official loan approval process. |
| Appraisal | An estimate of a property's fair market value.Generally this is required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. |
| Appraiser | An individual who conducts an appraisal estimate. |
| Assessor | A public official who establishes the value of a property for taxation purposes. |
| Assumable mortgage | A mortgage that can be transferred from a seller to a buyer; once the loan is assumed by the buyer the seller is no longer responsible for repaying it. |
| Balloon Mortgage | Balloon mortgage loans are short-term fixed-rate loans with fixed monthly payments for a set number of years followed by one large final balloon payment for all of the remainder of the principal. |
| Bankruptcy | Bankruptcy usually occurs when someone owes more than they have the ability to repay. A person's assets are turned over to a trustee and used to pay off outstanding debts. |
| Cap | A limit on how much a monthly payment or interest rate can increase
or decrease. |
| Closing | The final procedure in which documents are executed and recorded, and the sale is completed. This is the time at which the property is formally sold and transferred from the seller to the buyer. It is at this time that the borrower takes on the loan obligation. |
| Closing costs | Costs above and beyond the sale price of the property that must be paid to cover the transfer of ownership at the time of closing. |
| Credit report | Documentation of an individual's credit history. |
| Credit history | History of an individual's debt payment. |
| Equity | An owner's financial interest in a property. This is calculated by subtracting
the amount still owed on the mortgage loan from the fair market value
of the property. |
| Fair market value | The highest price that a buyer is willing to pay and the lowest amount
a seller willing to sell a property for. . |
| Escrow account | This is a separate account into which the lender puts a portion of each monthly mortgage payment. An escrow account insures that the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc will be available. |