ADJUSTABLE-RATE MORTGAGE (ARM)
A mortgage that permits the lender to adjust the interest rate periodically on the basis of changes in a specified index.

AMORTIZATION SCHEDULE
A timetable schedule showing the amount of each payment applied to interest and principal and the remaining balance after each payment is made.

ANNUAL PERCENTAGE RATE (APR)
The cost of a mortgage stated as a yearly rate including such items as interest, mortgage, and loan origination fees or points.

APPRAISAL
A written analysis of the estimated value of a property prepared by a qualified appraiser.

BIWEEKLY PAYMENT MORTGAGE
A mortgage requiring payments every two weeks instead of the standard monthly payment. The result for the borrower is a substantial savings in interest.

BROKER
A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.

CERTIFICATE OF TITLE
A statement provided by an abstract company title or attorney stating that the title to real estate is legally held by the owner.

CLOSING
A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying the closing costs.

COLLATERAL
An asset that guarantees the repayment of a loan. For example, a car or a home.

COMMISSION
The fee charged by a broker or agent for providing services related to a real estate transaction such as procuring the property, bringing the parties together and negotiating a purchase contract or loan.

DEED
The legal document conveying title to a property.

EARNEST MONEY DEPOSIT
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

EQUITY
A homeowner's financial interest in a property. The difference between the market value of a property minus all liabilities owed on the property.

EXCLUSIVE LISTING
A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time, but reserving the owner's right to sell the property himself without the payment of a commission.

FAIR CREDIT REPORTING ACT
A consumer protection law that regulates the disclosure of consumer reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

HOME INSPECTION
A thorough inspection that evaluates the structural and mechanical condition of a property.

LIEN
The legal claim against a property that must be satisfied before the property may be sold.

LOCK-IN
A written agreement in which the lender guarantees a specified interest rate if a mortgage goes to closing within a set period of time.

MORTGAGE
A legal document that pledges a property to the lender as security for payment of a debt.

MORTGAGE INSURANCE
A contract that insures the lender against loss caused by a mortgagor's default on a government mortgage or conventional mortgage.

NET WORTH
The value of all of a person's assets, including cash, minus all liabilities.

PRIME RATE
The interest that banks charge to their preferred customers.

PRINCIPAL
The amount borrowed or remaining unpaid.

REAL ESTATE AGENT
A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.

REALTOR®
A registered collective membership mark which identifies real estate professionals who are members of the National Association Of Realtors® and subscribe to its strict Code of Ethics.

SURVEY
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachment, and other physical features.

TITLE SEARCH
A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

TRUTH IN LENDING
A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate and other changes.

UNDERWRITING
The process of evaluating a loan application to determine the risk involved for the lender.