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A B 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
An interest rate that can move either up or down at a
designated interval, changing the monthly payment on your loan accordingly.
Amortization
Gradual payment of a debt through regular installments,
covering both interest and principal. Or the payment schedule by which you
reduce a loan to zero.
Annual
Percentage Rate (APR)
This rate includes the loan interest rate plus points,
loan origination fee, and other lender-related costs. The APR allows you to
compare quotes from different lenders.
Appraisal
Required by the lender and prepared by a professional
appraiser, this is an estimate of the value of your new home as of a specific
date.
Assets
Everything of value that you own and that could be used
for payment of debts (including cash, real estate, personal property,
retirement/pension accounts, and so on).
Closing
The completion of a real estate transaction.
Closing
Costs
Costs associated with the submission, approval and closing
of your mortgage application. Examples include loan fees, title fees, and
appraisal fees.
Construction
Loan
A loan providing you with funds to build a home.
Down
Payment
The portion of the purchase price that your are
responsible for, due at the closing.
Escrow
An amount paid along with your monthly mortgage payment.
This amount is held by the lending institution for payment of your property
taxes, homeowner's insurance, mortgage life/disability insurance, private
mortgage insurance, etc.
Equity
The difference between the market value of your home and
any outstanding mortgage loans.
Fixed-Rate
Loan
A loan for which the interest rate will remain constant.
Interest
The charge you pay for the use of money you have borrowed.
Liabilities
Your monthly or fixed obligations, including those amounts
that extend over the next six months. Liabilities include credit card balances,
auto loan payments, alimony, child support, and any other obligations.
Lien
Any legal claim against your new home, ensuring payment of
an unpaid debt.
Loan-to-Value Ratio
(LTV)
Loan amount divided by the sale price or appraised value
of the home, whichever is lower. This is usually expressed as a percent. For
example: An $80,000 mortgage divided by a market value of $100,000 would give
you a loan-to-value of 80%.
Mortgage
Insurance
When your down payment is less than 20%, private mortgage
insurance is required.
PI
Principal and Interest, two elements of your loan
payment--the amount borrowed and the amount it costs to borrow.
PITI
Principal, Interest, Taxes (property) and Insurance
(homeowner's and mortgage).
Point
A point is 1% of your loan amount. This is the initial
charge sometimes required for borrowing money.
Prepaid
Escrow
The amount paid at the time of closing toward escrow
accounts for taxes and insurance.
Principal
The balance which remains due on the original mortgage.
Settlement
Charges
See closing
costs.
Title
This refers to legal ownership of a property.
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