Common Mortgage Terminology Explained
Acceleration - This a lender’s to payment balance loan borrower by stipulation Due Clause
ARM / Rate - A has rate periodically adjusted. adjustment off from upon is a mortgage.
Amortization - split periodic, equally so the the mortgage balance paid.
APR / Rate - of rate mortgage mortgage’s including and fees.
Appraisal - A estimation property’s value.
Assessment - Tax property a purpose, like example.
Assumption - agreement buyer seller the taking from on seller’s existing mortgage.
Balloon - a amortization the the mortgage. final (often large) balloon paid end end extended time.
Bridge - A used by homebuyer’s present property, permits be close new before one sold.
Buy Down - buy when allows rate lowered subsidization.
Caps - that on of or on basis ARM’s
Change Frequency - increment number that may an ARM
Closing - The the that the buyer, the seller, the which binding signed property is “closed” property transferred.
Closing - The fees by buyer at for of tasks, charges, insurances, etc.
Conversion - for mortgage’s converted fixed-rate point life loan.
Credit - Official the history potential buyer/borrower.
Default - In nutshell, not payment time; legally provide to specified deadline.
Down - paid property fills between and borrowed.
Equity - left comparing on to property’s current value.
Escrow - An is the in borrower for tax reasons. describes that when is closing.
Escrow Payment - part borrowers payment lender pay insurance, lease, purposes.
Fannie - Federal Association; backed buys residential mortgages.
Freddie - Loan Corporation; a organization mortgages depositary HUD-approved lenders.
FHA - that Housing insures, open home meets requirements.
Fixed Installment - regular that on mortgage.
Fixed Rate - A whose will for duration loan.
Foreclosure - by mortgage repossesses the a as of defaulting.
GPM / Payment - Flexible plan the borrower’s payments a timeframe.
GEM / Mortgage - in borrower’s over period time; this is to mortgage’s principal cases.
Hazard - Insurance protection forms damage and/or loss.
HUD-1 Statement - is provided lender/broker a of needed closing, including points, escrow, commissions, fees.
Impound / - of buyer’s monthly by to various taxes.
Index - publicly interest by determine between and rates set rates rate mortgages.
Interest - Monetary by to for money.
Interest Rate - The possible for rate mortgage.
Interest Floor - agreed interest an mortgage.
Interim - A short-term temporary while is completed.
Jumbo Loan - mortgage the by and Mac.
Liabilities - owed buyer.
Lien - claim a property payment financial obligation.
Lock - Mortgage lender’s guarantee quoted good set days time issuing.
Margin - that lender the an set rate.
Market - The a seller upon of property.
Maturity - that loan’s principal to in full.
Mortgage - Document property loan security debt’s payment.
Mortgage - receives the bringing to for of loan arrangement.
Mortgage - on basis purpose a a buyer than 20% equity.
Note - specifying borrower repay at interest a of time.
One Adjustable / ARM - in interest on basis.
Origination - Fee a the in loan.
Owner - Property which provides some the buyer’s financing.
Payment Change - Date new begins ARM GPM.
PITI - Principal, Interest, Taxes, Insurance
Points / Points - money closings purpose cost loan payments. Point to of loan’s total amount.
Power Attorney - legal one able in another.
Preapproval - process a goes decide money can to for.
Prepayment - permitting to payments maturation date.
Prepayment - by to when repays loan an date.
Principal - a loan, total remains the borrower. a payment, the goes final the loan.
PMI / Private - a pay for; when does a 20% payment of property.
Rate - Commitment a to that certain is closing specified time.
Real - that to sale property.
Recission - of or contract; law homeowner days a arrangement. “Right Recission”
Refinancing - of replacement a is mortgaged.
Satisfaction of - Document a the their said loan.
Second - of additional, subordinate a is mortgaged.
Servicing - work keep in such various tax, insurance, and costs.
Shared Appreciation - A which receives for current value; in exchange, seller a future values.
Simple - Interest on owed.
Step - in interest based set a point, after rate constant.
Title - declaring property’s ownership.
Title - Insurance insures home lender in search.
Title - A of determine the of property.
Truth in - Federal requires to APR buyer for loan.
Underwriting - made lender or provide to based qualifications.
By: Aaron Crawford
About the Author:
ARM / Rate - A has rate periodically adjusted. adjustment off from upon is a mortgage.
Amortization - split periodic, equally so the the mortgage balance paid.
APR / Rate - of rate mortgage mortgage’s including and fees.
Appraisal - A estimation property’s value.
Assessment - Tax property a purpose, like example.
Assumption - agreement buyer seller the taking from on seller’s existing mortgage.
Balloon - a amortization the the mortgage. final (often large) balloon paid end end extended time.
Bridge - A used by homebuyer’s present property, permits be close new before one sold.
Buy Down - buy when allows rate lowered subsidization.
Caps - that on of or on basis ARM’s
Change Frequency - increment number that may an ARM
Closing - The the that the buyer, the seller, the which binding signed property is “closed” property transferred.
Closing - The fees by buyer at for of tasks, charges, insurances, etc.
Conversion - for mortgage’s converted fixed-rate point life loan.
Credit - Official the history potential buyer/borrower.
Default - In nutshell, not payment time; legally provide to specified deadline.
Down - paid property fills between and borrowed.
Equity - left comparing on to property’s current value.
Escrow - An is the in borrower for tax reasons. describes that when is closing.
Escrow Payment - part borrowers payment lender pay insurance, lease, purposes.
Fannie - Federal Association; backed buys residential mortgages.
Freddie - Loan Corporation; a organization mortgages depositary HUD-approved lenders.
FHA - that Housing insures, open home meets requirements.
Fixed Installment - regular that on mortgage.
Fixed Rate - A whose will for duration loan.
Foreclosure - by mortgage repossesses the a as of defaulting.
GPM / Payment - Flexible plan the borrower’s payments a timeframe.
GEM / Mortgage - in borrower’s over period time; this is to mortgage’s principal cases.
Hazard - Insurance protection forms damage and/or loss.
HUD-1 Statement - is provided lender/broker a of needed closing, including points, escrow, commissions, fees.
Impound / - of buyer’s monthly by to various taxes.
Index - publicly interest by determine between and rates set rates rate mortgages.
Interest - Monetary by to for money.
Interest Rate - The possible for rate mortgage.
Interest Floor - agreed interest an mortgage.
Interim - A short-term temporary while is completed.
Jumbo Loan - mortgage the by and Mac.
Liabilities - owed buyer.
Lien - claim a property payment financial obligation.
Lock - Mortgage lender’s guarantee quoted good set days time issuing.
Margin - that lender the an set rate.
Market - The a seller upon of property.
Maturity - that loan’s principal to in full.
Mortgage - Document property loan security debt’s payment.
Mortgage - receives the bringing to for of loan arrangement.
Mortgage - on basis purpose a a buyer than 20% equity.
Note - specifying borrower repay at interest a of time.
One Adjustable / ARM - in interest on basis.
Origination - Fee a the in loan.
Owner - Property which provides some the buyer’s financing.
Payment Change - Date new begins ARM GPM.
PITI - Principal, Interest, Taxes, Insurance
Points / Points - money closings purpose cost loan payments. Point to of loan’s total amount.
Power Attorney - legal one able in another.
Preapproval - process a goes decide money can to for.
Prepayment - permitting to payments maturation date.
Prepayment - by to when repays loan an date.
Principal - a loan, total remains the borrower. a payment, the goes final the loan.
PMI / Private - a pay for; when does a 20% payment of property.
Rate - Commitment a to that certain is closing specified time.
Real - that to sale property.
Recission - of or contract; law homeowner days a arrangement. “Right Recission”
Refinancing - of replacement a is mortgaged.
Satisfaction of - Document a the their said loan.
Second - of additional, subordinate a is mortgaged.
Servicing - work keep in such various tax, insurance, and costs.
Shared Appreciation - A which receives for current value; in exchange, seller a future values.
Simple - Interest on owed.
Step - in interest based set a point, after rate constant.
Title - declaring property’s ownership.
Title - Insurance insures home lender in search.
Title - A of determine the of property.
Truth in - Federal requires to APR buyer for loan.
Underwriting - made lender or provide to based qualifications.
By: Aaron Crawford
About the Author:
Aaron is for Mortgage Brokers MBDB.net