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Housing Finance Agency - A state agency which offers a limited amount of below-market-rate home financing for low-and moderate-income households.
Index - The interest rate or adjustment standard which determines
changes in monthly payments for an adjustable rate loan.
Infrastructure - The public facilities and services needed to support residential development, including highways, bridges, schools, and sewer and water systems
Interest - The cost paid to a lender for use of borrowed money.
Joint Tenancy - A form of ownership by which tenants own a property equally. If one dies, other would automatically inherit entire property.
Level Payment Mortgage - A mortgage whose payments are identical for each month over life of loan.
Mortgage Broker - A broker who represents numerous lenders and helps consumers find affordable mortgages; broker charges a fee only if consumer finds a loan.
Mortgage Commitment - A formal written communication by a lender, agreeing to make a mortgage loan on a specific property, specifying loan amount, length of time and conditions.
Mortgage Company (Mortgage Banker) - A company that borrows money from a bank, lends it to consumers who want to buy homes, then sells loans to investors.
Mortgagee - The lender who makes a mortgage loan.
Mortgage Loan - A contract in which borrower’s property is pledged a s collateral and which can be repaid in installments over a long period. The mortgagor (buyer) promises to repay principal and interest, to keep home insured, to pay all taxes, and to keep property in good condition.
Mortgage Origination Fee - A charge by a lender for work involved in preparing and servicing a mortgage application (usually 1 percent of loan amount).
Negative Amortization - An increase in outstanding balance of a loan when a monthly payment is not large enough to cover all of interest due.
Note - A formal document showing existence of a debt and stating terms of repayment.
PITI - Principal, interest, taxes, and insurance (the 4 major components of monthly housing payments).
Point - A charge of 1 percent of mortgage amount. Points are a one-time charge assessed by lender at closing to increase interest yield on a mortgage loan.
Prepayment - Payment of all or part of a debt prior to its maturity.
Principal - The amount borrowed in a loan, excluding interest and other charges.
Property Survey - A survey to determine boundaries of your property. The cost will depend on complexity of survey.
Rapid Payoff Mortgage - (See Growing Equity Mortgage).
Recording Fee - A charge for recording transfer of a property, paid to a city, county, or other appropriate branch of government.
Real Estate Settlement Procedures Act (RESPA) - A federal law requiring lenders to provide home buyers with information about known or estimated settlement costs. The act also regulates other aspects of settlement procedures.
R-Value - The resistance of insulation material (including windows) to heat passing through it. The higher number, greater insulating value.
Sales Contract - A contract between a buyer and seller which should explain, in detail, exactly what purchase includes, what guarantees there are, when buyer can move in, what closing costs are, and what recourse parties have if contract is not fulfilled or if buyer cannot get a mortgage commitment at agreed-upon terms.
Settlement - (See Closing).
Shared Appreciation Mortgage - A loan in which partners agree to share specified portions of downpayment, monthly payment, and appreciation.
Tenancy in Common - A form of ownership in which tenants own separate but equal parts. To inherit property, a surviving tenant would either have to be mentioned in will or, in absence of a will, be eligible through state inheritance laws.
Title - Evidence (usually in form of a certificate or deed) of a person’s legal right to ownership of a property.
Transfer Taxes - Taxes levied on transfer of property or on real estate loans by state and/or local jurisdictions.
Veterans Administration (VA) - A federal agency which insures mortgage loans with very liberal downpayment requirements for honorably discharged veterans and their surviving spouses.
Walk-Through - A final inspection of a home before settlement to search for problems that need to be corrected before ownership changes hands.
Warranty - A promise, either written or implied, that material and workmanship of a product is defect-free or will meet a specified level of performance over a specified period of time. Written warranties on new homes are either backed by insurance companies or by builders themselves.
Zoning - Regulations established by local governments regarding location, height, and use for any given piece of property within a specific area.
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