Mortgage Terms Defined
- A loan secured by the equity in a property. These are sought for a number of reasons, including home improvements, major purchases or expenses and debt consolidation.
- A type of insurance that covers repairs to specified parts of a house for a specific period of time.
- A government agency established to implement federal housing and community development programs; Oversees the Federal Housing Administration (FHA).
- The percentage of gross monthly income budgeted to pay housing expenses.
- A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized(...)
- A combination fixed rate and adjustable rate loan - also called 3/1,5/1,7/1 - can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest(...)
- See Escrow.
- The index is the measure of interest rate changes a lender uses to decide the amount an interest rate on an ARM will change over time.The index is generally a published number or percentage, such as the average interest rate or yield on Treasury bills. Some index rates tend to be higher than(...)
- This refers to the original interest rate of the mortgage at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). It's also known as "start rate" or "teaser."
- The regular periodic payment that a borrower agrees to make to a lender.
- A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI).
- The fee charged for borrowing money.
- The percentage rate at which interest accrues on the mortgage. In most cases, it is also the rate used to calculate the monthly payments.
- A periodic charge, expressed as a percentage, for use of credit.
- An arrangement that allows the property seller to deposit money to an account. That money is then released each month to reduce the mortgagor's monthly payments during the early years of a mortgage.
- For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.
- For an adjustable-rate mortgage (ARM), the minimum interest rate, as specified in the mortgage note.
- Liability shared among two or more people, each of whom is liable for the full debt.
- The ownership of a property by two or more personas with the survivor taking the share of the deceased.
- A mortgage larger than the limits set by the Federal National Mortgage Association Fannie Mae, FNMA) and the Federal Home Loan Mortgage Corporation (Freddie Mac FHLMC).
- The penalty a borrower must pay when a payment is made a stated number of days (usually 15) after the due date.
- An alternative financing option that allows low- and moderate-income home buyers to lease a home with an option to buy. Each month's rent payment consists of principal, interest, taxes and insurance (PITI) payments on the first mortgage plus an extra amount that accumulates in a savings(...)
- The bank, mortgage company or mortgage broker offering a loan.
- A person's financial obligations. Liabilities include long-term and short-term debt.