GLOSSARY OF MORTGAGE TERMS
Since most of us don't use mortgage terminology in our normal daily conversations, listed below are some of the most commonly used terms. If you don't find a term below or still have questions, just ask us.
Abstract (of title)
A written summary of the title history of a particular piece of real estate.
A provision of a mortgage or note which provides that the entire outstanding balance will become due and payable in the event of default.
Adjustable Rate Mortgage (ARM)
A mortgage in which the interest rate is adjusted periodically, based on the movement of a financial index.
Repayment of loan by installment payments. As the payments are made, the debt is reduced so that at the end of fixed period or term, no money will be owed.
Annual Percentage Rate (APR)
The annual percentage rate refers to the total cost of the loan, expressed as a yearly rate.
That part of the closing costs pre-paid to the lender at time of application to cover initial expenses.
A report made by a qualified person as to the value of a property as of a given date.
The value placed on a piece of real estate by the taxing authority for the purpose of taxation. Also called an assessment.
Assumption of Mortgage
The purchaser takes over mortgage payments for the balance of the loan, assuming primary liability. Unless specifically released by the lender, the seller remains secondarily liable.