Loan payment by equal periodic payments calculated to pay off
the debt at the end of a fixed period, including accrued
interest on the outstanding balance.
Annual Percentage Rate (APR)
The cost of credit expressed as an annual rate. It must be
calculated by using a formula set by federal law and disclosed
to the borrower to aid in comparing different credit plans.
An estimate of the value of property; made by a qualified
professional called an "appraiser".
An 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.
A short-term interim loan for financing the cost of
construction. The Lender advances funds to the builder at
periodic intervals as the work on the property progresses.
A mortgage not insured by FHA or guaranteed by the VA or Farmers
Home Administration (FmHA).
A report documenting the credit history and the current status
of a Borrower’s credit standing.
The ratio, expressed as a percentage, which results when a
borrower’s monthly payment obligation on long-term debts is
divided by their gross monthly income.
The difference between the fair market value of the asset and
the current debt balance against it; also referred to as the
Refers to a neutral third party who carries out the instructions
of both you and the Seller to handle all the paperwork of
settlement or "closing". Escrow may also refer to an account
held by the Investor into which you would pay money (usually
monthly along with your mortgage payment) for annual or
semi-annual tax and insurance payments.
Professional that examines a home to evaluate its plumbing,
electrical work, roof, structural stability, heating and cooling
systems, and appliances.
Loan to Value Ratio (LTV)
This is the relationship between the amount of the mortgage loan
and the appraised value of the property, expressed as a
percentage. For example, if you received a $95,000 loan on a
home worth $100,000, the LTV Ratio would be 95%.
This is a dollar amount paid to a Lender for making a loan. A
point is one percent of the loan amount.
Private Mortgage Insurance (PMI)
This may be required by your Lender if the loan does not meet
the normal standards of the Lender. The most common reason for
this is a smaller down payment made by the borrower than the
Lender usually requires. This insurance protects the Lender from
a loss if the borrower defaults. It does NOT protect the
borrower, though it may allow the Borrower to qualify for the
loan. The borrower pays the cost for PMI.
Real Estate Broker
The seller of a house pays a real estate broker to attract
potential buyers and help negotiate the contract between the
seller and the buyers. The broker identifies available
properties for buyers and shows them properties that meet their
A document that gives evidence of an individual’s ownership of
An examination of municipal or county records to determine the
legal ownership of a property, usually performed by a title