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| Amortization |
The periodic principal pay down of a loan. |
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| APR (Annual Percentage Rate |
The actual cost of a mortgage expressed as a yearly rate. This is usually HIGHER than the advertised rate for the mortgage because it takes into account the points paid, and other costs of credit. |
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| ARM (Adjustable Rate Mortgage |
A mortgage in which the interest rate is adjusted, usually annually, based on a preselcted index. |
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| Balloon Payment Mortgage |
A mortgage which involves small payments, usually monthly, for a set period, with the entire remaining principal balance of the loan coming due at a specified time. |
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| Caps on interest |
Consumer safeguards which limit the amount the interest on an adjustable rate mortgage can increase in a given year, or over the lifetime of the loan. |
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| Certificate of Eligibility |
A document provided to qualified veterans that entitles them to a VA loan. |
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| Closing |
The meeting at which the property and funds actually change hands |
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| Construction Loan |
A short-term loan for financing the cost of construction for a newly built home. |
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| Conventional Loan |
A mortgage not insured by FHA or guaranteed by the VA. |
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| Credit Report |
A report documenting the borrower's credit standing. |
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