A mortgage in which the interest rate may change, up or down,
according to a predetermined index.

A loan which is paid off in equal installments.

An evaluation of of property by an agency of government for taxation purposes.

This permits you to transfer your mortgage to anyone who wants to buy your house, as long as that person meets the credit standards of the lender.

The final payment of a mortgage loan when it is larger than the regular payment; it usually extinguishes the debt.

Cash payments made at closing that allows the borrower to take advantage of lower interest rates for a specific period.

The expenses over and above the price of the house that must be paid before title is transferred.

A loan neither insured by the FHA nor guaranteed by the VA.

A written instrument that conveys title to real property.

The difference between the market value of property and the homeowner's indebtedness.

That portion of a mortgagor's monthly payment held in trust by the lender to pay taxes, hazard insurance, lease payments, and other items as they become due, known as impounds in some states.

The trading of an equity in a piece of property.

A lender's agreement to make a loan to a specific borrower on a specific property. A FHA or PMI agreement to insure a loan on specific property, with a designated purchaser.

Fixed rate, long term mortgage (25-40 years). The payments, however are increased annually in negotiated amounts. The additional dollars are amounts allocated to the outstanding principal, thereby paying the mortgage off earlier than planned (12-15 years).

The holder of a mortgage or the permanent lender for whom the mortgage banker services the loan. Any person or institution that invests in mortgages.

Buyer makes a deposit for the future purchase of a property with the right to lease the property value.

A written promise by a lender to make a loan under certain conditions. These include interest rate, length of loan, lender fees, annual percentage rate, mortgage and hazard insurance and other special requirements.

The ratio of the loan principal (amount borrowed) to the property's appraised value (selling price). On a $100,000 home with a mortgage loan principal of $80,000 the loan-to-value is 80%.

Generally accepted as the best price that a ready, willing and able buyer will pay, and the lowest price a ready, willing and able seller to accept. In other words, the dollar figure at which there is a meeting of the minds.

Pledge of real property to secure a debt by written instrument given by the mortgager. Should be recorded in the County Recorder's Office.

The lender of money or the receiver of the mortgage document.

An arrangement among real estate brokers to make their listings available to each other. If a sale results, the commission is divided between the listing broker and the selling broker.

A written promise to pay a certain amount of money.

A fee or charge for work involved in the evaluation, preparation, and submission of a proposed mortgage loan.

Principal, Interest, Taxes, Insurance: Formula used in calculations of amount the purchaser is qualified to borrow.

One percent of loan amount. This is a fee that the lending institution charges.

A fee paid to the mortgagee for paying the mortgage before it comes due. Also known as prepayment.

The right given a purchaser to pay all or part of a debt prior to it's maturity. The mortgagee cannot be compelled to accept any payment other than those originally agreed to.

A conventional mortgage loan loan on which a private mortgage insurance company protects the lender against loss due to payment by the homeowner.

A contract which gives one the right to lease property at a certain sum with the option to purchase at a later date.

Junior Mortgage or Junior Lien: an additional loan imposed on property with a first mortgage. Generally at a higher interest rate and shorter than a "first" mortgage.

A loan with periodic payments of interest only; the principal sum due in one lump sum upon maturity.

Often used interchangeably with the word ownership. It indicates the accumulation of all rights in property, the owners and others.

An insurance policy which protects the insured (purchaser or lender) against loss arising from defects in a title. A title search is always required before the title insurance is granted.