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mortgage with a fluctuating interest rate, also known as ARM or variable-rate mortgage
Adjustable-Rate Mortgage
process during which the title to the property is transferred to the buyer
Closing
increase in value over time
Appreciation
decrease in value over time
Depreciation
mortgage with fixed interest rate for the life of the loan
Fixed rate mortgage
fee charged by a lender for the use of borrowed money; expressed as a percentage of the amount borrowed
interest
value of an owner’s share in a property; value minus debt
equity
increase in price levels and reduction in the value of money
inflation
mortgage designed to help individuals who may not qualify for other mortgage loans due to poor credit or lack of down payment
FHA loan
process of a certified professional assessing the value of a property
process of a certified professional assessing the value of a property
mortgage, which is unamortized or only partially amortized, meaning not all of the principal is paid by the end of the loan term through regular payments
Balloon Mortgage
visual examination of the structure and components of a home to find problems or dangers
inspection
amount borrowed
principal
provision stating fulfillment of a contract depends on certain conditions
Contingency
program of the Federal Housing Administration, which allows senior citizens to convert home equity into cash without selling the home
reverse mortgage
privately owned company authorized by Congress to increase the availability of credit in a particular sector of the economy
Government-Sponsored Enterprises (GSE)
GSE, formally called the Federal National Mortgage Association, was established by the U.S. government in 1938: it standardizes how home loans are approved and securitizes conforming loans
fannie mae
process of paying off a loan through specifically structured payments
Amortization
term used to describe when a borrower has negative equity in a property; the value of a property is less than the amount owed on the property; also known as an underwater mortgage
upside down mortgage
account held by a third party to be turned over to another at a specified time
escrow
period of temporary economic decline during which spending and trade are reduced
recession
form of security deposit accompanying an offer to purchase; intended to show the buyer is serious about the home purchase
earnest money
loan guaranteed to eligible veterans, active-duty personnel and surviving spouses
Veteran Affairs (VA) Loan
GSE, formally called the Federal Home Loan Mortgage Corporation, was established by the U.S. government in 1970; it standardizes how home loans are approved and securitizes conforming loans
Freddie Mac
policy protecting a mortgage lender in the event the borrower defaults on payments; typically required when borrowers have less than 20 percent equity
private mortgage insurance