Amortization: Assigning a specific amount of a total cost to different periods of time in order to create an amortization schedule.

Amortization Schedule: A table that displays each time periods payment on a loan (usually a mortgage), as generated by an amortization calculator.

APN - Assessor's Parcel Number: A unique number assigned to a specific piece of property for indentification purposes.

Appraisal: Estimating the monetary value of real, personal, or intangible property, usually performed as a service by someone recognized as an expert or certified by an organization or government agency.

Adjustable-Rate Mortgage (ARM): A conventional home loan in which the interest rate varies depending on the markets rate at the time. (AKA - Variable Rate Mortgage.)

Annual Percentage Rate (APR): The calculation of the yearly percentage rate you will owe that combines all interest, insurance, points and other fees that are involved with your home loan.

Assessed Value: The monetary value of an asset set by a public tax assessor for taxation purposes.

Assumable Mortgage: A conventional home loan that is transferable from a seller to a buyer. A fee for this process may be charged by your mortgage company.

AVM - Automated Valuation Model: A mathematically generated valuation that primarily utilizes real estate information such as, but not limited to, property characteristics, market demographics, sales prices, and regional trends to calculate a value for a specific property. Simply put; it's a computer program that emulates and expands on certain valuation techniques to predict market value.

Balloon Payment Mortgage: A mortgage that doesn't completely amortize over the life of the loan, in turn leaving a balance due at maturity of the loan. The last payment is known as the balloon payment due to it's large size. These loans are more often for commercial properties than residential properties. (AKA - Balloon Loans.)

Borrower: The person that has been approved for a home loan and has accepted the obligation of repaying the loan and any other fees associated with that home loan.

Cap: The limitations set on increases or decreases in an Adjustable-Rate Mortgages monthly payments or interest rates.

Census Tract: A defined area of a community for the purpose of taking a census. These areas usually follow the same boundries as existing cities or towns.

CMA - Comparative Market Analysis: Provides an estimate of value for a specific property using only a few indicators taken from sales of comparable properties, such as price per square foot. The values provided should not be considered an appraisal because the estimates do not meet the standards of a certified appraisal. CMA's are done by real estate professionals that can often be biased in their "opinion" of what your home is worth in order to help gain your listing.

Comp: An abbreviated term for a "comparable property". Refers to a property used to compare similar characteristics that the comp and the subject property have in common.

Commission: The percentage amount of a homes sale price that is owed to a real estate agent for their assistance in the buying or selling of your home.

Conforming Loans: Loans that conform with the standards and guidelines that the major lenders like Fannie-Mae and Freddie-Mac require. The most important of these standards set annually is the maximum home loan amount allowed. Any home loan over the maximum conforming loan amount is refered to as a Jumbo Loan. The conforming loan limit is 50% higher in Alaska, Hawaii, Guam and the US Virgin Islands.

Conventional Home Loan: Any home loan that is not funded or guaranteed by a government agency.

Default: The term used when a borrower fails to pay their monthly mortgage payments or doesn't meet all the terms of their mortgage.

Deferred Interest: The process of a conventional home loans monthly payments changing over time but the interest rate is fixed. This is also called negative amortization. In this situation the borrower pays monthly payments that are less than the total interest due. The amount that wasn't paid is then added to the total principal balance owed to the lender. The increase in mortgage payments over time can become quite significant. (AKA - Graduated-Payment Mortgage / Graduated-Rate Loan / Negative Amortization)

Delinquency: The term used when a borrower makes an untimely monthly mortgage payment.

Discount Point: These points are paid by the borrower to reduce the interest rate of a loan. Discount points are most often made as an equivalent of 1% of the total home loan and is usually paid at closing. (AKA - Points)

Discounted Rate Mortgage: A conventional home loan that initially allows for a discounted interest rate for a set period of time. This type of mortgage is for homeowners that want a lower monthly payment during the first few years in order to have available funds for furnishing, decorating, remodeling etc.

Down Payment: The initial upfront portion of the payment, usually given in cash. A larger down payment usually results in lower monthly payments and lower interest costs which will in turn build home equity faster.

Earnest Money: The money given by a potential buyer in order to proove their intentions of purchasing the home. If the buyers closes on the house the earnest money is put towards the down payment. The earnest money is returned if the buyers offer is rejected and is simply forfeited if the buyer changes his mind a pulls out of negotiations.

Equity: The montetary amount of principal paid down from your mortgage payments.

Escrow Account: An account in which the lender places part of the borrowers monthly payments into in order to pay for additional expenses such as homeowners insurance, mortgage insurance, property taxes, etc..

Fannie Mae: Federal National Mortgage Association (FNMA) - Owned by private stockholders, FNMA is a federally-chartered enterprise that purchases mortgages and turns them into securities for sale to investors. By making these purchases FNMA is able to supply funds to the lenders so they can make more loans to home buyers.

FHA Loan: A government home loan that is insured by the Federal Housing Administration. These loans are issued by federally qualified lenders.

Fixed-Rate Mortgage (FRM): A conventional home loan that has a permanent interest rate for the life of the loan. In turn, this will also make your home loan payments the same every month.

Flood Insurance: Homeowners insurance that protects against losses from a flood. Most lenders require homes located in a flood plain to have flood insurance before they will approve your home loan.

Foreclosure: When a mortgaged property is sold after the borrower has defaulted.

Freddie Mac: Federal Home Loan Mortgage Corporation (FHLMC) - a federally-chartered enterprise that purchases mortgages and turns them into securities for sale to investors. By making these purchases FHLMC is able to supply funds to the lenders so they can make more loans to home buyers.

Ginnie Mae: Government National Mortgage Association (GNMA) - a government-owned corporation directed by the U.S. Department of Housing and Urban Development. GNMA pools FHA-insured and VA-guaranteed loans in order to back securities for private investment. The investment income provided by GNMA supplies funds to the lenders so they can make more loans to home buyers.

Graduated Payment Mortgage (GPM): A conventional home loan that has monthly payments that change over time but the interest rate is fixed. This is also called negative amortization or deferred interest. In this type of home loan the borrower pays monthly payments that are less than the total interest due. The amount that wasn't paid is then added to the total principal balance owed to the lender. The increase in mortgage payments over time can become quite significant. (AKA - Graduated-Rate Loan / Negative Amortization / Deferred Interest)

Graduated-Rate Loan: A conventional home loan that has monthly payments that change over time but the interest rate is fixed. This is also called negative amortization or deferred interest. In this type of home loan the borrower pays monthly payments that are less than the total interest due. The amount that wasn't paid is then added to the total principal balance owed to the lender. The increase in mortgage payments over time can become quite significant. (AKA - Graduated-Payment Mortgage / Negative Amortization / Deferred Interest)

Government Home Loan: Any home loan that is funded or guaranteed by a government agency.

Home Inspection: The examination of a homes structure and mechanical systems. Alerts the homebuyer of any safety or repair issues that need to be addressed.

Home Price Indexes: These indexes calculate and measure the change in value of all single-family homes as a whole across the country in order to show home price trends geographically. These geographical indexes may be nationwide indexes, state indexes or regional indexes.

Home Warranty: Offers the homeowner protection against unexpected repairs on mechanical systems and appliances that are not covered by the homeowner's insurance.

Homeowner's Insurance: An insurance policy that protects the homeowner against damage to the home and it's contents. It also offers protection against claims of negligence or actions that result in injury or property damage.

Index: The measurment to determine changes in the interest rate charged for an Adjustable-Rate Mortgage.

Insurance: Offers the homeowner protection against specific losses that are secured by the payments made towards the homeowners premium.

Interest: The fee that is charged for the loan or use of money.

Interest Only Mortgage: A type of conventional home loan that the principal is deferred until the loans maturity date and interest payments are the only upfront obligations. Once the home loan matures the full principal balance is due.

Interest Rate: The percentage of interest charged on a monthly home loan payment.

Jumbo Loans: These home loans are considered non-conforming loans because they are over the maximum loan amount set by Fannie Mae and Freddie Mac. Because these home loans are used less frequently they usually have a higher interest rate than a conforming loan.

Lender: An entity that makes funds available to borrowers. Lenders can be private, public or institutional.

Lien: The legal claim of a propety used by lenders to secure the loan from the borrower. If the property is sold the lien must be paid in full.

Maturity: The date in which the total or final payment on a loan or debt is due. It is also reffered to as the "Maturity Date".

Mortgage: A type of loan that is made to finance the purchase of a home or other real estate property. These loans normally have specified payment periods and interest rates. A lien on the property is given by the borrower to the lender as collateral for the loan.

Mortgage Insurance: A type of insurance paid for by the borrower that protects the lender against loss from a borrower defaulting. Most lenders require this insurance if the borrower makes a down payment of less than 20% of the principle. (AKA - Personal Mortgage Insurance / Private Mortgage Insurance)

Negative Amortization Mortgage: A conventional home loan that has monthly payments that change over time but the interest rate is fixed. This is also called negative amortization or deferred interest. In this type of home loan the borrower pays monthly payments that are less than the total interest due. The amount that wasn't paid is then added to the total principal balance owed to the lender. The increase in mortgage payments over time can become quite significant. (AKA - Graduated-Payment Mortgage / Graduated-Rate Loan / Deferred Interest)

Non-Conforming Loans: Loans that do not conform with the standards and guidelines that the major lenders like Fannie-Mae and Freddie-Mac require. The most important of these standards set annually is the maximum loan amount allowed. Any home loan over the maximum conforming loan amount is referred to as a non-conforming Jumbo Loan. The conforming loan limit is 50% higher in Alaska, Hawaii, Guam and the US Virgin Islands.

Non-Disclosure State: A state within the US that has set restrictions for disclosing or revealing certain public information records. The most commonly restricted public record is a homes purchase price. The non-disclosure state include: Alaska, Indiana, Kansas, Mississippi, Missouri, New Jersey, New Mexico, Texas, Utah.

Personal Mortgage Insurance (PMI): A type of insurance paid for by the borrower that protects the lender against loss from a borrower defaulting. Most lenders require this insurance if the borrower makes a down payment of less than 20% of the principal. (AKA - Private Mortgage Insurance)

Points: These points are discounts paid by the borrower to reduce the interest rate of a loan. Discount points are most often made as an equivalent of 1% of the total home loan and is usually paid at closing. (AKA - Discount Points)

Principal: Is the unpaid balance on a loan that a borrower has yet to pay the lender.

Private Mortgage Insurance (PMI): A type of insurance paid for by the borrower that protects the lender against loss from a borrower defaulting. Most lenders require this insurance if the borrower makes a down payment of less than 20% of the principal. (AKA - Personal Mortgage Insurance)

Variable Rate Mortgage: A conventional home loan type in which the interest rate varies depending on the markets rate at the time. (AKA - Adjustable-Rate Mortgage.)