A loan that allows the lender to adjust the borrower's interest rate and payments at prescribed times and with prescribed limits. Lower interest rates are customary.

The periodic reduction of the principle balance of your loan which occurs as you make your monthly payments.

An estimate of real estate value, usually issued to the standards of the FHA, VA, FNMA.

Expenses incurred in the closing of a real estate or mortgage transaction. The purchaser may have to place a sum of money in escrow for closing.

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

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

• Escrow

That portion of a mortgagor's monthly payment held by the lender to pay for taxes, hazard insurance, mortgage insurance, and other items as they become due.

A division of the Department of Housing and Urban Development whose main activity is the issuing of residential mortgage loans made by private lenders.

A loan that fixes the interest rate at a prescribed rate for the duration of the loan.

Nickname for Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled and operated corporation to support the secondary mortgage market. It purchases and sells residential conventional home mortgages.

Nickname for Federal National Mortgage Association (FNMA), a tax paying corporation created by Congress to support the secondary mortgages insured by FHA or guaranteed by VA, as well as conventional home mortgages.

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 in the interim.

The ratio of the mortgage loan principal (amount borrowed) to the property's appraised value (selling price).

Pledge of real property to secure a debt by written instrument given by the mortgagor.

The consideration paid by a mortgagor for mortgage insurance to FHA. This insurance protects the investor from possible loss in the event of a borrower's default on a loan.

The lender.

The borrower.

A written promise to repay a certain amount of money.

A fee paid at closing for origination of the loan.

One percent of the loan amount.

A sum of money placed in escrow to cover accrued real estate taxes and insurance.

A fee paid to the Mortgagee for paying the mortgage before it becomes due.

Insurance written by a private company protecting the mortgage lender against loss occasioned by a mortgage default.

An additional loan imposed on property with a first mortgage. Generally at a higher interest rate and shorter terms than a 'first' mortgage.

Performed by a registered surveyor, this document depicts the boundary lines of the property and reflects that there are no encroachments, protrusions or easements which affect the liability or marketability of the property.

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 title.

The VA home loan guarantee program is designed to encourage lenders to offer a long term low down payment mortgage to eligible veterans by guaranteeing the lender against loss.