A B C D E F G H I J L M O P R S T U
Adjustable-rate mortgage (ARM)
A mortgage loan that is subject to interest rate changes; when rates change, mortgage payments may increase or decrease.
Repayment of the mortgage loan through monthly installments of interest and
principal.
Annual percentage rate (APR)
Reflects the true annual cost of your loan. Calculated by a government formula, the APR includes the
interest,
mortgage insurance, points, and other fees associated with the loan, and will always be higher than your actual note rate.
The first step in the mortgage process, this form records borrower information necessary to the
underwriting process.
An estimate of the property's fair market value.
An increase in the property's value from changes in market conditions, inflation, or other causes.
Government official who determines property values for taxation purposes.
A mortgage that offers low rates for an initial time period (usually 5, 7, or 10 years) with the balance due once that time period elapses.
Occurs when a person owes more than what can be repaid. Federal law requires the debtor's assets be turned over to a trustee and used to repay outstanding debts.
Mortgage payments that are made every two weeks, not once a month.
A limit that restricts how much a monthly payment or
interest rate can increase or decrease.
The actual sale and transfer of the property from seller to the buyer.
Costs that are above and beyond the property's sale price and must be paid to cover the transfer of ownership.
An amount, usually a percentage of the property's sales price, collected by a
real estate agent as a fee for negotiating the transaction.
Non-government loans.
Your history of debt and repayment.
A document of your
credit history that includes all past and present debts and repayment timeliness.
A numerical expression of your
credit history that represents your creditworthiness.
A comparison of gross income to housing and non-housing related expenses.
A decline in the property's value.
Typically paid at closing to reduce the interest rate on a loan, and generally calculated to be one-percent of the loan amount.
The part of the property's purchase price that is paid in cash by the buyer and not financed with a mortgage.
A deposit made by the potential buyer to demonstrate intent to purchase the property.
Energy efficient mortgage (EEM)
An
FHA program that allows homebuyers to finance energy efficient features to a new or existing home as part of the home purchase.
Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders to make credit available without regard to race, color, religion, age, sex, marital status, national origin, or receipt of income from federal assistance programs.
The difference between
fair market value of the property and the amount owed on mortgages and other liens.
A separate account for the portion of the monthly mortgage payment that will provide funds for expenses like property taxes,
homeowners insurance, and
mortgage insurance.
A federal law prohibiting discrimination during the homebuying process on the basis of race, religion, sex, marital status, national origin, or disability.
The highest price that a willing buyer and seller would accept.
Fannie Mae or the Federal National Mortgage Association (FNMA)
A federally-chartered enterprise, owned by private stockholders and the largest supplier of home mortgage loans in the U.S.
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD) that insures residential mortgage loans made by private lenders.
A mortgage with payments that remain the same throughout the life of the loan.
Insurance that protects homeowners against losses from a flood and is required if property is located in a flood plain.
A legal process by which a mortgaged property is sold to pay the loan of the defaulting borrower.
Freddie Mac or Federal Home Loan Mortgage Corporation (FHLM)
A federally chartered corporation that provides lenders with funds for new loans by selling purchased residential mortgages to investors.
An estimate of all
closing costs given to the borrower within three days of loan application submission.
Home equity line of credit (HELOC)
A loan that allows the borrower to receive cash drawn against the
equity in the property.
Coverage for repairs of certain items should these items break down within the covered period.
Homeowners' Association (HOA)
A nonprofit association that manages the common areas of a community or condominium complex.
An insurance policy that protects against damage to the property and its contents, as well as personal liability.
Examination of the property by a professional to evaluate the structural and mechanical systems and determine if the property requires any repairs.
Document that itemizes all closing costs and is given to the buyer at or before closing. Also known as a closing statement or settlement sheet.
The amount of interest charged on a loan.
A legal decision that may require a lien against the debtor's property for collateral.
A financing option that allows purchasers to lease the property with an option to buy. The monthly rent may include an additional amount that is applied to a down payment on the property.
A legal claim against property that is satisfied when the property is sold.
Borrowed money typically repaid with interest.
Percentage relationship between the loan amount and lower of the appraised value or sales price.
Guarantees a specific interest rate if a loan is closed within a specified timeframe.
The date on which the loan's principal balance is due and payable.
A legal pledge of property to the lender as security for repayment of the loan.
The company that originates loans and resells them to secondary mortgage lenders.
The company that originates and processes loans for a variety of lenders.
Insurance that covers the lender against losses incurred as a result of a defaulted loan. Required for
FHA loans and certain first-time homebuyer programs, as well as when the down payment is less than 20-percent of the purchase price.
Indication by a potential buyer of willingness to purchase.
The charge for preparing, submitting, and evaluating a loan application, paid for at closing.
The total amount of principal and interest due each month that is calculated based on your loan schedule (e.g., 15 or 30 years).
Stands for principal, interest, taxes, and insurance – the four elements of the monthly mortgage payment.
Commitment by the lender to the borrower, providing the borrower continues to meet qualification requirements at the time of purchase.
Informal determination by the lender of the maximum loan available to the borrower.
Repayment of the mortgage before the scheduled due date. May result in a prepayment penalty.
The amount borrowed from the lender, excluding interest and additional fees.
Person licensed to negotiate and arrange real estate transactions.
A
real estate agent who is a member of the National Association of REALTORS.
Paying off one loan with another loan, usually to secure a better interest rate.
Any mortgage or lien that has a lower priority than the first mortgage. Also known as a second mortgage.
A property map that shows legal boundaries, easements, rights of way, and other physical features.
Building or improving a property using labor as part of the down payment.
A legal document that is evidence of a person's right to ownership of the property.
Law requiring a lender to disclose all fees, terms, and conditions associated with the loan.
The process of analyzing a loan application to determine the risk associated with making the loan.
U.S. Department of Housing and Urban Development (HUD)
A government agency that addresses housing needs, improves and develops communities, and enforces fair housing laws.
U.S. Department of Veterans Affairs (VA)
A federal agency that protects lenders against loss and encourages loans for veterans.