Mortgage Glossary

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Mortgage Glossary as below

Amortization
Making periodic installments to gradually pay off a mortgage.
Appraisal
An assessment or estimate of a property’s value.
Annual Percentage Rate
The yearly cost of interest calculated by taking the average compound interest rate over the term of the credit.
Balloon Payment
The final payment on a mortgage, which can be dramatically larger that previous payments.
Broker An agent
who makes arrangements for the sale of a property on behalf of the seller.
Adjustable Rate Mortgage
A mortgage with an adjustable interest rate. It adjusts periodically up or down with the movement of a specified index.
FHA Loan
A loan that is insured with the Federal Housing Administration
Commercial Mortgage
A loan which is made on commercial (non residential) real estate collateral, in which a mortgage is given to secure payment of principal and interest.

Interest Only Mortgage
During the term of an Interest only mortgage, payments are only made to cover the cost of interest charges. At the end of the mortgage term or when the property is sold the full amount borrowed will have to be repaid.

Fixed Rate Mortgage
A mortgage on which the interest rate is specified in the loan contract and remains the same throughout the term of the mortgage.

Amenity
A feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use. Such as a swimming pool or garden.

Amortization
Repayment of a mortgage loan through monthly installments of principal and interest. The amount that you pay each month is based on a schedule that will allow you to own your home at the end of a specific time period (for example, 15 or 30 years)

Bankruptcy
Bankruptcy usually occurs when someone owes more than they have the ability to repay. A person’s assets are turned over to a trustee and used to pay off outstanding debts.

Credit report
Documentation of an individual’s credit history.

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