acceleration clause
A provision in a mortgage that gives the lender the right to demand payment of the entire principal balance if a monthly payment is missed. • top

acceptance
An offeree’s consent to enter into a contract and be bound by the terms of the offer.  • top

additional principal payment
A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.  • top

adjustable-rate mortgage (ARM)
A mortgage that permits the lender to adjust its interest rate periodically on the basis of changes in a specified index. • top

adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM). • top

adjustment period
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM). • top

amenity
A feature of real property that enhances its attractiveness and increases the occupant’s or user’s satisfaction although the feature is not essential to the property’s use. Natural amenities include a pleasant or desirable location near water, scenic views of the surrounding area, etc. Human-made amenities include swimming pools, tennis courts, community buildings, and other recreational facilities.  • top

amortization
The gradual repayment of a mortgage loan by installments.   • top

amortization schedule
A timetable for payment of a mortgage loan. An amortization schedule shows the amount of each payment applied to interest and principal and shows the remaining balance after each payment is made.  • top

amortization term
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months. • top

amortize
To repay a mortgage with regular payments that cover both principal and interest.   • top

annual percentage rate (APR)
The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance, and loan origination fee (points).   • top

application
A form used to apply for a mortgage loan and to record pertinent information concerning a prospective mortgagor and the proposed security. • top

appraisal
A written analysis of the estimated value of a property prepared by a qualified appraiser. Contrast with home inspection.

appraised value
An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property. • top

appraiser
A person qualified by education, training, and experience to estimate the value of real property and personal property. • top

appreciation
An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation. • top

assessed value
The valuation placed on property by a public tax assessor for purposes of taxation.

assessment
The process of placing a value on property for the strict purpose of taxation. May also refer to a levy against property for a special purpose, such as a sewer assessment.  • top

asset
Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). • top

assignment
The transfer of a mortgage from one person to another. • top

assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold. • top

assumption
The transfer of the seller’s existing mortgage to the buyer. See assumable mortgage. • top

attorney-in-fact
One who holds a power of attorney from another to execute documents on behalf of the grantor of the power. • top

bankruptcy
A legal proceeding in which a debtor's ability to repay creditors is determined. Specifically, the debtor's assets and liabilities are evaluated in accordance with preference and allocation rules in order to use available assets to pay eligible liabilities. • top

borrower
The individual whom obtains or receives a loan with the promise or understanding of repaying it. • top

broker
A person who arranges funding or negotiates contracts for a fee. • top

closed-end loan
A loan in which money is borrowed in one lump sum for a specific period of time.  • top

closing costs
Fees paid at closing, such as, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement.  • top

co-applicant
An individual who applies for credit with you. If the application is approved and the co-applicant signs the loan documents with you, then he/she will assume joint responsibility for repayment of the loan.  • top

conditional loan decision
A preliminary decision to grant credit that is based on information stated by the borrower. Once the stated information can be formally verified, a final loan decision can be made.  • top

condominium
Individual ownership of a unit and an individual interest in the common areas and facilities which serve the condominium development.  • top

contract rate
This is Household terminology. "Contract Rate" means the interest rate applied to the principal balance of the account to calculate periodic finance charges. Also called "Interest Rate" on this web-site. • top

cooperative housing
An apartment building or a group of dwellings owned by a corporation with the residents as stockholders in that corporation. In a cooperative, the corporation or association owns title to the real estate.   • top

credit disability insurance (A&H)
An optional, credit-related insurance product that pays the monthly loan payments when illness or injury prevents the insured from working.  • top

credit history
The record of how you've borrowed and repaid debts.  • top

credit insurance, or credit life insurance or life
An optional, credit related insurance product that pays off the outstanding loan balance up to the maximum amount of the policy when the insured dies.  • top

credit involuntary unemployment insurance (IUI)
An optional, credit related insurance product that makes monthly loan payments when a customer becomes involuntarily unemployed resulting from lockout, general strike (most states), unionized labor disputes, involuntary layoff or termination by employer.  • top

creditor
A person or business from whom you borrow or to whom you owe money.  • top

credit bureau
The agency that keeps your credit history.  • top

credit report
A credit history report that determines an individual’s creditworthiness.  

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creditworthiness
Eligibility of an individual to borrow money based on past and future ability to repay debts.  • top

debt
Money owed to another party.  • top

debt consolidation
Paying off multiple bills and replacing them with one, easy-to-manage payment.  • top

debt-to-income ratio
Total monthly loan, mortgage and credit card obligations divided into Gross Monthly Income.  • top

deed of trust
See mortgage.  • top

default
Failure to repay a loan or otherwise meet the terms of a loan agreement.  

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delinquency
Failure to make payments on time.  • top

equity
Market value of real property, less the value of all existing liens.  • top

finance charge
The cost of credit expressed as a dollar amount.  • top

fixed-rate mortgage
A mortgage on which the interest rate is fixed for the term of the loan.  

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gross monthly income
Total monthly income before any deductions, such as taxes.  • top

home equity
The difference between what your property is worth and how much you currently owe on your mortgage.  • top

home equity loan
A loan that lets you access your home’s equity. It is also referred to as a second mortgage or borrowing against your home.  • top

interest rate
This is the rate applied to the principal balance of the account to calculate periodic finance charges. Also called "Contract Rate" on this web-site.
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joint account
Credit extended to two or more people (who may or may not be spouses) who will sign on the Loan Agreement and, therefore, be jointly responsible for the debt.  • top

late payment
A payment not received by the due date. Additional charges may be imposed if payments are late.  • top

lien
A claim upon a piece of property, for the payment or satisfaction of a debt or obligation.  • top

loan term
The repayment period of a loan.  • top

loan-to-value ratio
The relationship between the amount of all the mortgage loans on a property, and the appraised value of the property expressed as a percentage.  • top

low documentation loan
In a Low-Doc loan, at least one of the factors--income, employment or assets--will be verified but the overall paperwork is significantly less than a standard loan application. Asset verification, for example, might require you to provide bank statements to show you can make a down payment. The price for these quicker-to-obtain, nearly paper-less loans is typically a down payment of at least 20-25 percent and a slightly higher interest rate (about 1/8 to 1/4 percent above the market) for standard loans.   • top

market value
The highest price that a buyer would pay and the lowest price a seller would accept on a property.  • top

minimum draw
The minimum amount of the initial advance and subsequent advances that can be borrowed on a revolving account.   • top

minimum monthly payment
The smallest amount of money the creditor requires an individual to pay each month.  • top

monthly periodic rate
The Annual Percentage Rate (APR) divided by 12 months.   • top

mortgage
A legal document in which property serves as security for the repayment of a loan.  • top

mortgage loan agreement
A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of indebtedness, and states the manner in which it shall be paid. The loan agreement states the amount of the debt that the mortgage secures and renders the mortgagors personally responsible for repayment.  • top

net income
Total monthly income after all deductions.  • top

notary
A public officer who attests or certifies deeds and other writings such as loan documents, usually under his official seal, to make them authentic.  

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origination fee
See Points.   •top

personal loan for homeowners
Our fastest and easiest loan available. A real estate secured loan that allows you to borrow $5,000 - $35,000. No home appraisal or income verification is required.   • top

points
Points allow you to pay a little extra on your loan in the beginning to "buy down" your rate, meaning that you pay a lower contract rate for the life of your loan. Each point is 1-percent of the loan amount and buys down your rate by 0.3-percent. Points may be tax deductible so consult your tax advisor for details. Points are non-refundable.  • top

prepayment penalty
A charge imposed on a borrower who pays off the loan principal early. This charge compensates the lender for lost interest revenue as well as loan origination and servicing expenses incurred.  • top

recording tax
A fee paid to the county government to file the Mortgage in public records.  • top

refinancing
The process of paying off an existing loan with the proceeds from a new loan.  • top

revolving line of credit
A loan which allows additional funds to be borrowed as debt is paid down so long as the outstanding balance does not exceed a certain limit.  • top

second mortgage
See Home Equity Loan  • top

tax deductibility
The ability to deduct the amount of interest paid towards a Mortgage or Home Equity loan from the borrower’s Federally taxable income.  • top

term
The amount of time between your loan start date and the date your entire balance is due.  • top

title
A document that provides legal evidence of property ownership.  • top

title insurance
A policy issued by a Title Insurance company. It insures a homebuyer or person making a mortgage against loss or damage resulting from title defects or liens existing against the property at the time of issuance.  • top

title search
An examination of official real estate records to determine if any defects or liens exist that affect the condition of title on a piece of property.  • top

underwriting
The process of reviewing a loan application to determine whether to make a loan based on credit, employment, assets, and other factors.  • top

unsecured loan
A loan that does not require the user to put up collateral such as a home or auto.  • top

variable Interest Rate
A loan in which the interest rate is adjusted periodically based on an index. It is also called an adjustable rate loan. We do not offer variable interest rate loans.  • top

verification of employment
The process of obtaining information from the applicant's employer verifying his/her position and salary.   • top

verification of mortgage
The process of obtaining information from the applicant's mortgage(s) verifying the applicant's payment history, terms, rates, and balance.  • top