Glossary AllABCDEFGHIJKLMNOPQRSTUVWXYZ A Ability-to-repay rule The ability-to-repay rule is the reasonable and good faith determination most mortgage lenders are required to... Learn More → Acceleration Clause Provision in a mortgage that allows the lender to demand payment of the entire principal... Learn More → Additional Principal Payment A way to reduce the remaining balance on the loan by paying more than the... Learn More → Adjustable-Rate Mortgage (ARM) A mortgage with an interest rate that changes during the life of the loan according... Learn More → Adjusted Basis The cost of a property plus the value of any capital expenditures for improvements to... Learn More → Adjustment Date The date that the interest rate changes on an adjustable-rate mortgage (ARM). Learn More → Adjustment Period The period elapsing between adjustment dates for an adjustable-rate mortgage (ARM). Learn More → Affordability Analysis An analysis of a buyers ability to afford the purchase of a home. Reviews income,... Learn More → Amortization The gradual repayment of a mortgage loan, both principle and interest, by installments. Learn More → Amortization Term The length of time required to amortize the mortgage loan expressed as a number of... Learn More → Explore 9 More Docs B Balance Sheet A financial statement that shows assets, liabilities, and net worth as of a specific date. Learn More → Balloon Mortgage A mortgage with level monthly payments that amortizes over a stated term but also requires... Learn More → Balloon Payment The final lump sum paid at the maturity date of a balloon mortgage. Learn More → Before-tax Income Income before taxes are deducted. Learn More → Bi-weekly payment In a bi-weekly payment plan, the mortgage servicer is collecting half of your monthly payment every... Learn More → Biweekly Payment Mortgage A plan to reduce the debt every two weeks (instead of the standard monthly payment... Learn More → Bridge Loan A second trust that is collateralized by the borrower's present home allowing the proceeds to... Learn More → Broker An individual or company that brings borrowers and lenders together for the purpose of loan... Learn More → Buydown When the seller, builder or buyer pays an amount of money up front to the... Learn More → C Cap Limits how much the interest rate or the monthly payment can increase, either at each... Learn More → Certificate of Eligibility A document issued by the federal government certifying a veteran’s eligibility for a Department of... Learn More → Certificate of Reasonable Value (CRV) A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value... Learn More → Change Frequency The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM). Learn More → Checking Account A checking account is a type of bank account that lets you deposit and withdraw... Learn More → Closing A meeting held to finalize the sale of a property. The buyer signs the mortgage... Learn More → Closing Costs These are expenses - over and above the price of the property - that are... Learn More → Compound Interest Interest paid on the original principal balance and on the accrued and unpaid interest. Learn More → Construction loan A construction loan is usually a short-term loan that provides funds to cover the cost... Learn More → Consumer Reporting Agency (or Bureau) An organization that handles the preparation of reports used by lenders to determine a potential... Learn More → Explore 5 More Docs D Debt-To-Income Ratio A debt-to-income (DTI) ratio is a percentage that compares your monthly debt payments to your... Learn More → Deed of Trust The document used in some states instead of a mortgage. Title is conveyed to a... Learn More → Default Failure to make mortgage payments on a timely basis or to comply with other requirements... Learn More → Delinquency Failure to make mortgage payments on time. Learn More → Deposit This is a sum of money given to bind the sale of real estate, or... Learn More → Discount In an ARM with an initial rate discount, the lender gives up a number of... Learn More → Down Payment Part of the purchase price of a property that is paid in cash and not... Learn More → Down Payment Assistance Most states and many counties and cities offer grants and no-interest loans to help home... Learn More → E Effective Gross Income A borrowers normal annual income, including overtime that is regular or guaranteed. Salary is usually... Learn More → Equity The amount of financial interest in a property. Equity is the difference between the fair... Learn More → Escrow An item of value, money, or documents deposited with a third party to be delivered... Learn More → Escrow Disbursements The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and... Learn More → Escrow Payment The part of a mortgagor’s monthly payment that is held by the servicer to pay... Learn More → Load More
