C D E F G H I J K L M N O P Q R S T U V W
X Y Z
Adjustable Rate Mortgage (ARM)
loan in which the interest rate is periodically adjusted based
on the movement of a pre-selected index.
Repayment of a home loan through monthly payments of principal
and interest that are calculated to payoff your loan at the
end of a fixed period of time.
Percentage Rate (APR)
The total cost of obtaining a loan including interest,
discount points and loan fees, stated as a percentage and
expressed as an annual rate.
A report prepared for the benefit of the lender that gives
an opinion of the fair market value of the property, also
known as property evaluation.
A loan with monthly installments of principal and interest
that do not fully amortize the loan. The balance of the loan
is due in a lump sum at specified date.
A limit on the periodic increase or decrease in the interest
rate on an adjustable rate.
The consummation of a real estate transaction where title
to a property is formally transferred, the note and security
instruments are signed, and funds are disbursed.
Expenses incurred to close on a home loan, including origination
fee, discount points, title insurance, survey fees, and attorney
fees, and pre-paid items, such as tax and insurance escrow
Property owned by a borrower that is pledged to a lender in
order to secure a loan.
Home loan financing that is not insured by FHA or guaranteed
by the VA.
15 or 30-Year Fixed Rate
The interest rate is the same for the entire 15 or 30 year
home loan term. The term "conventional" means this home loan
is not an FHA insured or VA guaranteed home loan program.
Money that is owed, which the borrower promises to repay.
Ratio commonly used to determined qualification for a home
loan. Compares total monthly obligations plus your home loan
payments with your total monthly gross income.
The part of the purchase price of a home that the buyer pays
in cash. The purchase price minus the down payment equals
the loan amount, exlcusive of closing costs.
(Tax reserves and insurance reserves) A reserve is a sum of
money set aside to be used later for a particular purpose.
The mortgage lender usually requires the borrower to establish
and maintain a reserve so that the borrower will have sufficient
funds to pay general taxes and renew insurance when these
items become due.
The difference between the market value of a property and
the balance owed on that property’s home loans.
A price freely agreed upon by a willing buyer and a willing
seller of a property, with neither party being under any compulsion
to buy or sell.
Housing Administration (FHA)
A federal agency that provides home loan insurance for residential
loans and sets standards for construction and underwriting.
A loan in which the interest rate remains the same for the
entire term of the loan.
A signed statement by a gift donor explaining that a cash
gift used by the borrower to qualify for a loan does not have
to be repaid.
Faith Estimate (GFE)
A document prepared by the lender that tells borrowers the
estimated cost they will pay at or before closing. The lender
must mail the GFE to the applicant within three business days
after the application is received.
Insurance that compensates the insured for loss on property
because of physical damage by fire, wind, or other natural
A published interest rate such as the prime rate, London InterBank
Offer Rate (LIBOR) or Treasury Bill. Lenders commonly use
indexes to establish interest rates charged on adjustable
The charge for borrowing an amount of money for a certain
period of time. Also known as the note rate.
A jumbo loan is a home loan in the amount of $240,100 or above.
15-or 30-Year Fixed Rate
The interest rate is the same for the entire 15-or-30 year
home loan term. The term "jumbo" means the loan amount is
$240,100 or above.
The total monthly payment amount involved in paying back a
home loan: principal, interest, taxes, hazard insurance, mortgage
insurance, and assessments.
A pledge of real estate as security for the repayment of a
An insurance policy that insures a lender against a loss if
a borrower defaults on his or her loan payments.
A mortgage insurance company that insures a lender against
loss if borrowers default on their loan payments.
A promise issued in writing stating that money borrowed for
the purchase of a home loan will be repaid at a specific interest
rate over a given period of time.
The lender in a home loan transaction.
The borrower in a home loan transaction.
The amount charged by a lender to a borrower for processing,
underwriting and completing home loan documents, and distributing
A one time charge, charged in lieu of interest, equal to 1%
of the principal amount of a home loan.
An insurance policy written by a private company that insures
a lender against certain losses if a borrower defaults on
his or her loan payments.
report prepared for the benefit of the lender that gives an
opinion of the fair market value of the property, also known
A registered trademark of the National Association of Realtors
that refers to a real estate agent who is a member of, or
is affiliated with, the National Association of Realtors®.
The procedures related to the collection of home loan payments
and the management of escrow accounts.
Evidence of the right to, or ownership of, property.
A type of insurance that insures against loss brought on by
defects in title to real estate.
A search of public records to uncover the facts relating to
the ownership of real estate.
A federal law that requires lenders to disclose, in writing,
certain credit terms and conditions of a home loan to the
The process of analyzing information such as a borrower’s
ability to repay a home loan, the acceptability of the property
as security, and the loan rate and term to determine the risk
of lending money.
of Veterans Affairs (VA)
An agency of the federal government. A VA home loan is a home
loan that is guaranteed by the VA The VA home loan guarantee
program encourages lenders to offer long-term, low down payment
financing to eligible veterans.