Mortgage Terms

Adjustable Rate Mortgage (ARM)	Blanket term for any loan with changeable terms that provides for periodic interest rate changes at given intervals during the life of the loan. Cost, rates, fees, terms and conditions of ARM's vary widely from lender to lender. Other names for these loans include: Adjustable Rate loan, Flexible Rate Loan, Variable Interest Rate, Variable Rate Loans and Variable Rate Mortgages
Amortization	Regular, periodic payments covering interest and principal over a set period of time, Resulting in a zero balance at the end of that time.
Amount Financed	Total amount borrowers will pay for use of money.
Annual interest Rate	Annual cost of money expressed as percentage.
Annual Percentage Rate (APR)	Credit cost measures, expressed as yearly rate. includes interest and other charges.
Appraisal	Supportable opinion or estimation of the worth or market value of property.
Appreciation	Increase in property value due to any cause
Assumable Mortgage	Any mortgage which has features allowing it to be formally and legally transferred to or assumed by another party.
Bi-Weekly Mortgage	Conventional loan paid every two weeks which substantially reduces interest paid over the life of the loan.
Budget Loan	A loan arrangement in which a portion of the property taxes and insurance are collected by the lender as part of the mortgage payment and held in escrow to pay when due.

Cap	Limit on the amount an interest rate or monthly payment can change on an ARM. 3 basic types: Life of loan cap, payment cap & periodic interest rate cap.
Co-Borrower	Applies for the loan along with the borrower. Responsible for repayment just as much as the borrower.
Conventional Loan	Loan made by conventional/institutional lender without direct government participation (insured/guaranteed).
Credit Report (Residential Credit Report)	Special credit report required by conventional and government mortgage lenders.
Debt Ratios	Monthly debt divided by gross income resulting in a percentage figure used to qualify borrowers with a lender.
Down Payment	Percentage paid to reduce the full purchase price of a property and normally needed to secure a conventional mortgage.
Federal Housing administration (FHA)	Division of Housing and Urban Development that insures residential loans made by private lenders.
FHLMC (FreddieMac) & FNMA (FannieMae)	Governmental sponsored corporations engaged in acquiring residential mortgages.
Fixed Interest Rate	An interest rate that remains unchanging during the life of the loan
GNMA (GinnieMae)	Governmental corporation responsible for special assistance loan programs.

Graduated Payments Mortgage (GPM)	Fixed rate loan with lower monthly payments that gradually increase during the first five years of the loan.
Insured Mortgage	A mortgage insured to protect the mortgagee against loss in the event of a default.
loan Cost	Fees, expenses and charges for services rendered in the acquisition of a loan for real estate.
Points (1 point = 1 %)	Fees charged for loan packaging, processing & funding (Loan Fee Points) or to increase the yield to investors in lieu of increasing the loan rate (discount Points).