Repayment of your loan amount through regular payments of both principal
and interest, calculated to pay off the loan after a fixed period
annual percentage rate (APR)
Charges imposed on the borrower to obtain a mortgage, expressed
on an annualized basis as an interest rate. It includes the interest
rate, loan fees and points.
Professional estimate of your property's current market value.
Increase in property value (opposite: depreciation).
Property's taxable value according to your local tax assessor
Loan with monthly payments of principal and interest that do not
fully amortize the loan. The last payment is then made up of a lump-sum
of the remaining principal balance.
Home ownership title without liens or claims against it.
The time at which loan documents and funds are signed and delivered
to finalize the funding of a loan. Sometimes called a settlement.
Expenses incurred to finance a home loan and/or transfer ownership
of real estate.
combination rate mortgage
Loan that has a fixed rate for the first 2 or 3 years, then has
an adjustable rate for the remaining years.
combined loan-to-value (CLTV) ratio
Comparison, in the form of a ratio, of the total outstanding loans
against the real property to its appraised value or sales price.
Areas in a condominium or townhouse development used by all residents
and supported with owners' association fees.
Something of value (usually money) exchanged for the act or promise
of another person; a required element in a legally enforceable contract,
such as a home sales contract.
Person who agrees to make loan payments, if you cannot fulfill your
A rating given to a person that establishes creditworthiness based
on credit history, experience and current financial condition.
A report run by an independent credit agency which verifies certain
information concerning your credit standing.
Rejection of an offer to buy, that includes a new offer to consider.
Ratio of your monthly debt obligation to gross monthly income.
Cash paid by the home buyer towards the partial payment of a home's
The collection or deposit of documents and funds from the parties
involved while a purchase loan is being processed that are held
by a third party until all conditions are met to fund the loan.
Federal National Mortgage Association. A government-sponsored private
corporation that buys home loans from lenders and sells them to
Federal Housing Administration.
An agency within the Department of Housing and Urban Development
that provides mortgage insurance for home loans and sets standards
for construction and underwriting.
fixed rate mortgage
Loan with an interest rate and monthly payments that remain constant
throughout the life of the loan.
Funds used for a down payment or closing costs that were a gift
from a relative.
Insurance coverage that compensates the insured for physical damage
to the mortgaged property.
home improvement loan
A loan used to pay for permanent improvements to a home.
Hazard insurance plus provisions to protect against personal liability
and damage or loss to the personal property inside the home.
Any and all housing costs, i.e., rent or mortgage payment, including
principal, interest, taxes, and hazard insurance.
impound or escrow account
Account consisting of a portion of monthly payments collected and
distributed by a lender to pay for taxes, insurance and other expenses.
Ownership of property by two or more persons with equal interest
and equal rights in the property including the right of survivorship.
If one owner dies, ownership rights are passed to the surviving
loan-to-value (LTV) ratio
Ratio of the loan against the real property to its appraised value
or sales price.
Increase in the unpaid loan balance created when monthly payments
do not cover both principal and interest and unpaid interest is
added to the principal balance.
Borrower living in the mortgaged property as his or her primary
PMI (Private Mortgage Insurance)
Insurance coverage purchased to protect lender from non-payment
of the loan.
Upfront fee lenders charge to reduce an interest rate. Each point
typically equals 1 percentage point of the total amount of the loan.
Fee borrowers pay if they pay off a loan during the early years
of its term.
The original amount of money borrowed not including interest owed.
A loan used to buy real property.
Amount for which a property sells.
Real estate professional adhering to the code of ethics of and participating
as an active member in the National Association of Realtors.
New loan obtained on a property that pays off its existing mortgage.
May also be used to receive cash for the equity in your home.