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Acceleration -- The right of the mortgage (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgage (borrower), or by using the right vested in the Due-on-Sale Clause.

Adjustable Rate Mortgage (ARM) -- Is a mortgage in which the interest rate is adjusted periodically based on a pre selected index. Also sometimes known as the renegotiable rate mortgage, the variable mortgage or the Canadian roll over mortgage.

Adjustment Interval -- On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index.

Administration Fee -- Add On Fee by most Realtors (usually an additional $390.00 +/-) over and above the per centage (%) fee charged to you at closing

Amortization -- Means loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance. Comes from the French word, "mort", literally to kill the loan owing.

Annual Percentage Rate (APR) -- Is a interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit cost. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan

Accrued Interest: The amount of interest that has been earned since the last interest payment date. When payments are made, the buyer pays the seller the accrued interest - a pro rata portion of the next interest payment, which will be paid to the buyer of the bond.

Appraisal -- An estimate of the value of property, made by a qualified professional called an "appraiser". There are different types of qualified appraisers. The highest qualification is considered to be the MAI

Assessment -- A local tax levied the County usually against a property for a specific purpose, such as a sewer or street lights. Also can mean the assessed value of the property. Similar, but not the same as an "appraisal" see above.
Assessment -- A local tax levied the County usually against a property for a specific purpose, such as a sewer or street lights. Also can mean the assessed value of the property. Similar, but not the same as an "appraisal" see above.

Assumption The agreement

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Balloon payment A balloon mortgage is one where a lump sum, the balance of the loan principal, becomes payable at the end of the term. A mortgage can be interest only with the whole principal due at the end of the term or it may be calculated to amortize over a longer period, say 30 years, but with the outstanding principal balance payable at the end of, say, 10 years.

Blanket Mortgage -- A mortgage covering at least two pieces of real estate as security for the same mortgage. This provides greater security for the Lender. It may be possible to get a "partial" release so the Borrower can sell one of the properties provided a suitable principal reduction is made.
Borrower (Mortgagor) -- One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full. The mortgage is not actually the loan, it just creates the security interest in the property. It is the promissory note that spells out the repayment terms and interest.

Broker -- An ind ividual (90% +/- are Realtors) in the business of Selling for a "Real Estate Fee" and at times assisting in arranging funding or negotiating contracts for a client. Brokers always charge a fee or receive a commission for their services.

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Caps (interest) -- A limit on the amount the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan. For example a 4/1 cap would mean a maximum interest increase of 4% over the life of the loan and no more than 1% each year.

Capital Gain: The the profit derived from the selling price exceeding its initial purchase price. A realized capital gain is an investment that has been sold at a profit. An unrealized capital gain is an investment that hasn't been sold yet but would result in a profit if sold. Capital gain is often used to mean realized capital gain.

Caps (payments) -- Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change. Mortgage may change per year and/or the life of the loan.
Closing -- The meeting between the buyer, seller and lender or their agents where the property and funds legally changes hands. Also called settlement. Closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording, credit report charge and other costs assessed at settlement. The cost of closing usually are about three to six percent of the mortgage amount. Commitment and agreement, often in writing, between a lender and a borrower to loan money at a future date subject to the completion of paperwork or compliance with stated conditions.
Credit Report -- A report documenting the credit history and current status of a borrower's credit standing. Credit is rated for mortgage purposes from A, excellent, down to D, very poor. To obtain a conforming loan that can be resold to Fannie Mae, the Borrower usually needs A grade credit.
We offer financing from A right down to D credit.

Commitment -- A promise by a lender to make a loan on specific terms or conditions to a borrower or builder. A promise by an investor to purchase mortgages from a lender with specific terms or conditions. Construction loan (interim loan) - A loan to provide the funds necessary to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as it progresses.

Contract sale or deed -- A contract between purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale.
Construction Loan --A short term interim loan for financing the cost of construction. The lender advance funds to the builder at periodic intervals as the work

Channel: When prices trend between two parallel trendlines, this is referred to as a channel.

Conventional Loan -- A mortgage not insured by FHA or guaranteed by the VA.
Cross Default -- Language often in a second mortgage that states that a failure to pay or a default on the first mortgage is a default on the second mortgage.
Also that if the borrower has more than one mortgage with the same lender, then a default on just one of the mortgages puts ALL the other mortgages into default.

Confirmation: A subsequent signal that validates a position stance. Property Buyers and investors sometimes look for more than one method or require validation before acting. For example: confirmation of Renter's rent change may entail an advance past the previous reaction high. For an indicator such as MACD, confirmation of a divergence may be a subsequent moving average crossover.

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Deferred Interest -- see Negative Amortization

Debt-to-Income Ratio -- The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her net effective income (FHA/VA) or gross monthly income (conventional). See Housing expenses-to-income ratio.
Deed of Trust -- In many states, this document is used in place of a mortgage to secure the payment of a note. It involves a third party, the trustee, who holds the deed to the property.

Default -- Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage. This can also mean failure to pay property taxes, maintain insurance on the property or even to maintain the interior and exterior of the property.

Delinquency -- Failure to make payments on time. This can lead to foreclosure. See default.

<Discount Point -- see Point

Down Payment -- Money paid to make up the difference between the purchase price and the mortgage amount. Down payments usually are 10 to 20 percent of the sales price on a conventional loan. VA loans have no downpayment but are only available to Veterans who have not used up their VA entitlement. FHA loans are often as low as 3% downpayment.
When the down payment is less than 20% the Lender will usually require PMI (Private Mortgage Insurance) on a conventional loan, or MIP (Mortgage Insurance Premium) on an FHA loan.

Deferred Interest -- see Negative Amortization

Due-on-Sale Clause -- A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.
Earnest Money -- Money given by a buyer when making an offer to a seller as part of the purchase price to bind a transaction or assure payment. It should be held in escrow by the real estate company, a title company or an attorney. This is usually returnable if the contract does not go through for valid reasons. It may not be returnable if the buyer just changes his mind.

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Escrow -- Refers to a neutral third party who carries out the instruction of both the buyer and seller to handle all the paperwork of settlement or closing. Escrow may also refer to an account held by the lender into which the home buyer pays money for tax or insurance payments.
Equal Credit Opportunity Act (ECOA) -- A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, sex, marital status, handicap status or receipt income from public assistance programs.
Equity - The difference between the fair market value and current indebtedness, also referred to as the owner's interest.

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FHLMC -- The federal Home Loan Mortgage Corporation provides a secondary market for saving and loans by purchasing their conventional loans. Also known as "Freddie Mac."
Fixed Rate Mortgage -- The mortgage interest rate will remain the same on these mortgages throughout the term of the mortgage for the original borrower.

Falling Wedge: A bullish pattern that begins wide at the top and contracts as prices move lower toward a resistance breakout.

FNMA -- The Federal National Mortgage Association is a secondary mortgage institution which is the largest single holder of home mortgages in the United States. FHMA buys VA, FHA and conventional mortgages from primary lenders. Also known as "Fannie Mae.".

Foreclosure -- A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property.

Fannie Mae -- see Federal National Mortgage Association.

Federal Home Loan Bank Board (FHLBB) -- A regulatory and supervisory agency for federally chartered savings institutions.

Federal Home Loan Mortgage Corporation (FHLMC) -- also referred to as "Freddie Mac", is a quasi-government agency that purchases conventional mortgages from insured depository institutions and HUD approved mortgage bankers.

Federal National Mortgage Association (FNMA) --also know as "Fannie Mae" a taxpaying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.

Freddie Mac -- see Federal Home Loan Mortgage Corporation.

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Ginnie Mae --see Government National Mortgage Association.

Government National Mortgage Association (GNMA) also known as "Ginnie Mae", provides sources of funds for residential mortgage, insured or guaranteed by FHA or VA.

Graduated Payment Mortgage (GPM) A type of flexible-payment where the payments increase for a specified period of time and then level off. This type of mortgage may have negative amortization built into it.

Guaranty -- A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.

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Hard Money Lender -- Equity lenders who base their funding decisions on the unencumbered property value and its salability. They do not calculate debt ratio and usually do not take into account the borrower's credit and income. The combined loan-to-value ratio is usually less than 65%. Funding can be very fast. Sometime in 2 days or less.

Hazard Insurance -- A form of insurance in which the insurance company protects the insured from specified losses, such as fire windstorm and the like.

Housing Expenses-to-Income Ratio -- The ratio expressed as a percentage, which results when a borrower's housing expenses are divided by his and/or her net effective income (FHA / VA loans) or gross monthly income (conventional loans). Also see Debt-to-Income Ratio.
Impound That portion of a borrower's monthly payment held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as Reserves.

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Index -- A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one, three and five year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average costs of funds incurred by savings and loans), which is then used to adjust the interest rate on an adjustable mortgage up or down. The rate must be one that is outside the influence of the lender.

Interest -- Amount of money paid on borrowed funds to a lender.

Interest -- Draging Interest-Amount of money paid on borrowed funds to a lender.after thinking you have paid of the balance owed. * this is always done by Banks providing Credit Card. Bank do not disclose all to you. Tell your elect Congress person or Senator.

Internal Revenue Code 1031 --To qualify for a 1031 you must trade equal or up in both price and equity.

Interim Financing -- A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.

Investor -- A money source for a lender.

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Jumbo Loan -- A loan which is larger (more than $203,250) than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans can not be funded by these two agencies, they usually carry a higher interest rate.

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Jumbo Loan -- A loan which is larger (more than $203,250) than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans can not be funded by these two agencies, they usually carry a higher interest rate.

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Lien -- A claim upon a piece of property for the payment of a debt or obligation.
Loan-to-Value Ratio The relationship between the amount of the mortgage loan and appraised value of the property expressed as a percentage.

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Margin -- The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate.

Market Value -- The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.

MIP: Mortgage Insurance Premium -- MIP is the one-half percent borrowers pay each month on FHA insured mortgage loans. It is insurance from FHA to the lender against incurring a loss due to the borrower's default. On September 1, 1983 the MIP was changed to a one time charge to the borrowers.
Mortgage Insurance Money paid to insure the mortgage when the down payment is less than 20 percent. see Private Mortgage Insurance, FHA Mortgage Insurance.

Mortgagee -- The lender.

Mortgagor -- The borrower or home owner.

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Negative Amortization -- Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid principal balance of the loan. The danger of negative amortization is that the home buyer ends up owing more than the original amount of the loan.