What can we help you with?
Amres has helped thousands of people get the financing they need.
from 500+ reviews on Zillow
Glossary of Popular Mortgage Terms
Mortgage 101
Looking to learn more about mortgage terms? Here's a handy glossary of terms, so you can get the most out of your next home purchase.
- Adjustable-Rate Mortgage (ARM): A type of mortgage loan with an interest rate that can change over time, typically in response to changes in market conditions.
- Amortization: The process of paying off a debt through regular payments over a period of time.
- Balloon Payment: A large, lump-sum payment due at the end of a mortgage loan term that is used to pay off the remaining balance.
- Bridge Loan: A short-term loan used to bridge the gap between the purchase of a new property and the sale of an existing property.
- Closed-End Mortgage: A mortgage loan with a fixed interest rate and set repayment terms that cannot be refinanced.
- Conversion Option: The option to convert an adjustable-rate mortgage to a fixed-rate mortgage at a predetermined rate.
- Escrow: A neutral third party that holds funds or documents in trust during a real estate transaction.
- Fannie Mae: A government-sponsored enterprise (GSE) that provides funding and support to the mortgage industry.
- Freddie Mac: A government-sponsored enterprise (GSE) that provides funding and support to the mortgage industry.
- Home Equity Loan: A loan that allows a homeowner to borrow against the equity in their home.
- Homeowner's Insurance: An insurance policy that protects a homeowner against losses or damage to their property.
- Housing and Urban Development (HUD): A federal agency that oversees housing and community development programs.
- Interest Only Loan: A mortgage loan where the borrower only pays the interest on the loan for a specified period of time.
- Jumbo Loan: A mortgage loan that exceeds the maximum loan limits set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac.
- Leasehold Estate: A type of property ownership where the tenant has the right to use the property for a specified period of time, but does not own the property outright.
- Lien: A legal claim on a property used as security for a debt.
- Lock-In Period: The period of time during which a borrower is guaranteed a specific interest rate for a mortgage loan.
- Mortgage Banker: An individual or company that originates, underwrites, and services mortgage loans.
- Mortgage Broker: An individual or company that connects borrowers with lenders for a fee.
- Mortgage Insurance: Insurance that protects the lender against losses incurred as a result of a borrower defaulting on a mortgage loan.
- Point: A fee paid by the borrower to the lender, equal to 1% of the loan amount, in exchange for a lower interest rate.
- Prepayment Penalty: A fee imposed on a borrower who pays off a mortgage loan before the end of the loan term.
- Refinancing: The process of obtaining a new mortgage loan to pay off an existing mortgage loan.
- Second Mortgage: A mortgage loan that is subordinate to a first mortgage loan and provides additional financing for a property.
- Underwriting: The process of evaluating a loan application to determine the risk involved and the likelihood of loan repayment.
Latest posts
Don't Stop Here
Check out some of these related articles.
Understanding the Role of Federal Reserve in Mortgage Rates
Understanding the Role of Federal Reserve in Mortgage Rates - This blog post provides a comprehensive overview of the Federal Reserve's impact on mortgage rates. Learn about the history and main role of the Federal Reserve, as well as how it influences the economy. Discover the factors that influence mortgage rates and explore real-life examples to illustrate the connection between the Federal Reserve and mortgage rates. Gain insights into the key tools used by the Federal Reserve and how policy changes can impact mortgage rates. Find tips on monitoring Federal Reserve actions for effective mortgage planning.
Read post
Building a Strong Financial Future: The Impact of Personal Finance on Mortgage Eligibility
Prepare for successful mortgage eligibility by developing responsible spending habits, improving your credit score, and securing stable employment. Learn the key factors to consider, such as debt-to-income ratio and payment histories, which will be taken into account by lenders when reviewing your application.
Read post
Maximizing Your Home's Value: Innovative Strategies for Cash-Out Refinancing
Looking to maximize your home's value for cash-out refinancing? Learn innovative strategies to increase your home's value, understand cash-out refinancing, prepare your home for appraisal, and more. Explore real-life case studies and consider the risks and considerations before deciding. Consult with a financial advisor for expert guidance.
Read post