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AMORTIZATION
The repayment of a loan over time by installments, dealing with how much of your payment goes toward interest and how much is paid toward principal
The repayment of a loan over time by installments, dealing with how much of your payment goes toward interest and how much is paid toward principal
ANNUAL PERCENTAGE RATE (APR)
The actual interest rate you pay on your mortgage, including fees, points and other costs associated with the loan
The actual interest rate you pay on your mortgage, including fees, points and other costs associated with the loan
APPRAISAL
A comprehensive report that determines the value of a property based on a number of factors
A comprehensive report that determines the value of a property based on a number of factors
CLOSING
The last step in the loan process where documents are signed at a title company or attorney's office
The last step in the loan process where documents are signed at a title company or attorney's office
CLOSING COSTS
The fees associated with purchasing a property that are not included in the purchased price, typically origination fees, discount points, appraisal fee, survey, title insurance, legal fees, real estate fees, prepayment of taxes and insurance and real estate transfer taxes
The fees associated with purchasing a property that are not included in the purchased price, typically origination fees, discount points, appraisal fee, survey, title insurance, legal fees, real estate fees, prepayment of taxes and insurance and real estate transfer taxes
CONSTRUCTION LOAN
A short-term loan to finance the construction of a new residence, business or investment property, typically converted to a conventional loan after construction
A short-term loan to finance the construction of a new residence, business or investment property, typically converted to a conventional loan after construction
CONVENTIONAL LOAN
A mortgage that is not guaranteed or insured by a government entity such as the Federal Housing Agency (FHA) or Veterans Affairs (VA)
A mortgage that is not guaranteed or insured by a government entity such as the Federal Housing Agency (FHA) or Veterans Affairs (VA)
CREDIT REPORT
A detailed report that includes vital information about you and your credit history, compiled through credit reporting agencies
A detailed report that includes vital information about you and your credit history, compiled through credit reporting agencies
DEBIT-TO-INCOME RATIO
The ratio of your liabilities (monthly bills and living expenses) versus your gross monthly income
The ratio of your liabilities (monthly bills and living expenses) versus your gross monthly income
DEED
An official public document that establishes property ownership
An official public document that establishes property ownership
DOWN PAYMENT
A portion of money paid at the beginning of a loan to demonstrate commitment to the purchase
A portion of money paid at the beginning of a loan to demonstrate commitment to the purchase
EARNEST MONEY
Money paid to the seller by the buyer as a pledge to complete a real estate transaction
Money paid to the seller by the buyer as a pledge to complete a real estate transaction
ESCROW
A fund administered by a third party and used to pay taxes and insurance for a mortgage transaction
A fund administered by a third party and used to pay taxes and insurance for a mortgage transaction
EQUITY
The value of a property, minus any money owed against it
The value of a property, minus any money owed against it
FIXED-RATE MORTGAGE
A mortgage with a fixed interest rate that will not adjust at any point during the life of the loan
A mortgage with a fixed interest rate that will not adjust at any point during the life of the loan
FORECLOSURE
The process by which a bank or lender sells a property after a borrower fails to meet the repayment terms of the loan
The process by which a bank or lender sells a property after a borrower fails to meet the repayment terms of the loan
HOME EQUITY LINE OF CREDIT
A loan that allows you to borrow money from the equity in your home, based on a certain maximum draw amount
A loan that allows you to borrow money from the equity in your home, based on a certain maximum draw amount
HOME INSPECTION
A limited, non-invasive, examination of the condition of home that is completed by a third party prior to selling
A limited, non-invasive, examination of the condition of home that is completed by a third party prior to selling
ORIGINATION FEE
A percentage of the mortgage loan charged by the lender for completing the loan process
A percentage of the mortgage loan charged by the lender for completing the loan process
PRE-APPROVAL
The process through which a lender evaluates the credit of a potential borrower and determines the maximum amount they would be willing to lend
The process through which a lender evaluates the credit of a potential borrower and determines the maximum amount they would be willing to lend
PRINCIPAL
The unpaid balance on your mortgage loan
The unpaid balance on your mortgage loan
PRIVATE MORTGAGE INSURANCE (PMI)
Extra insurance that a lender requires when a buyer obtains a loan for more than 80% of the home's value
Extra insurance that a lender requires when a buyer obtains a loan for more than 80% of the home's value
TITLE INSURANCE
Insurance taken out to protect both the borrower and the lender in case of a title dispute
Insurance taken out to protect both the borrower and the lender in case of a title dispute
TITLE SEARCH
Research conducted on a property prior to the sale to make sure there are no existing liens against it
Research conducted on a property prior to the sale to make sure there are no existing liens against it