A mortgage loan that is subject to changes in interest rates that can increase or decrease at pre determined intervals.

Calculated by using a standard formula, the APR shows the cost of a loan; expressed as a yearly interest rate, it includes the interest, points, mortgage insurance, and other fees associated with the loan.

An expert opinion on the fair market value of a property at a given time.

A mortgage that offers fixed payments for an initial period of time (usually 5,7 or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower.

Costs incurred to complete a loan transaction. These costs are in addition to the price of the property and down payment. Some examples are, but not limited to: appraisal, closing fee, title insurance, ect.

A building or complex in which units of property, such as apartments, are owned by individuals and common parts of the property, such as the grounds and building structure, are owned jointly by the unit owners.

A private sector loan, or “standard” loan that is not guaranteed or insured by the government.

A record that lists all past and present debts and the timeliness of their repayment; it documents an individual’s credit history.

A number generated by the credit bureaus which is a numerical representation of an individual’s credit profile based on credit history.

The portion of a home’s purchase price that is paid in cash and is not part of the mortgage loan, the difference between the loan amount and the purchase price.

Money put down by a potential buyer to show that he or she is serious about purchasing a home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal.

An account that is set up to hold funds from the monthly payment for property taxes, homeowners insurance, mortgage insurance, ect.

Government backed minimum down payment financing with a lower mortgage insurance premium than conventional financing.

A mortgage with payments that remain the same throughout the life of the loan because the interest rate remains fixed for the term.

An estimate of all closing fees including pre-paid and escrow items as well as lender charges.

Insurance that protects against damages caused to property by fire, windstorms, and other common hazards.

Not required by lender. A private inspection of the property to determine the condition and need for any repairs to the property.

Itemizes all the closing costs involved in the purchase or refinance of a property.

A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home’s purchase price.

A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures, the interest rate, and renders the mortgagor personally responsible for repayment.

Principal, Interest, Taxes, and Insurance- the four elements of a monthly mortgage payment; payments of principal and interest go directly towards repaying the loan while the portion that covers taxes and insurance ( homeowner’s and mortgage, if applicable) goes into an escrow account to cover the fees when they are due.

Payment of mortgage loan, or part of it, before due date. Mortgage agreements often restrict the right of prepayment either by limiting the amount that can be prepaid on any one year or charging a penalty for prepayment.

Insurance that protects the lender against any claims that arise from arguments about ownership of the property; also available for homebuyers.

The process of analyzing a loan application to determine the amount of risk involved in making the loan.

Department of Veterans Affairs: a Federal agency which guarantees loans made to veterans; similar to mortgage insurance, a loan guarantee protects lenders against loss that may result from a borrower default.