Adjustable Rate Mortgage A mortgage loan was the interest rate adjusts periodically based on the changes of a specified index such as the one-year Treasury Bill or the LIBOR.
Amortization The calculation of the amount of the installment payment it takes to pay off the obligation at the end of a fixed period of time.
Annual Percentage Rate (APR) The total cost of a mortgage stated as a yearly rate. It is typically higher than the note rate because it includes the base interest rate plus specific closing costs.
Appraisal A professional report that estimates the market value of a property.
Assessed Value The value a tax authority places on real property for the purpose of assessing yearly property taxes.
Balloon Mortgage A mortgage that is amortized over a stated period but provides for a lump-sum payment due at an earlier period, e.g. 30-year due in 15, where the payments are based on 30-year repayment but the loan is due paid in full in 15 years.
Cap Limits how much the interest rate on an adjustable rate mortgage (ARM) can increase or decrease.
Cash to Close Liquid assets available to be used to pay the closing costs involved with a mortgage transaction.
Collateral Property pledged as security for a loan, such as property pledged as security for a mortgage.
Conventional Mortgage A mortgage not obtained under a government-insured program.
Deed A legal document that is recorded in the county conveying title to a property.
Deed of Trust The legal document that pledges the property for the security of a mortgage loan.
Default Failure to make mortgage payments in a timely manner or to comply with other requirements outlined in the note.

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