A loan with an interest rate adjusted periodically, typically at one-year intervals. One-year ARMs adjust every year, but 3-, 5-, and 7-year ARMs don’t adjust until those periods are up, and typically every year after that. The adjustments depend on any number of financial market indexes, including the prime rate.

Someone who acts on behalf of another, such as a real estate agent, for a fee.

Most loans are amortized over 15 or 30 years. An amortization plan reduces a loan, eventually to zero, through monthly payments of principal and interest.

The annual cost of a mortgage, including interest service charges, points, loan fees, mortgage insurance and other fees. The APR is higher than the stated interest rate on a mortgage because it takes the points, fees, etc. into account.

An evaluation, usually made by an outside expert, to determine what a piece of property would sell for in the current marketplace.

The increase in the value of a home.

The value placed on a property used to determine property taxes due.

A mortgage where the remaining balance due to the lender must be paid all at once, usually five, seven or 10 years down the line, at which time the homeowner can refinance.

A licensed real estate professional. The seller’s broker generally would determine the market value, advertise the property, show the property to prospective buyers, and advise the client with regard to offers.

A subsidy, usually paid by a builder, to reduce monthly mortgage payments.

A limit to the amount the interest rate or the monthly payment of an ARM can increase, either during an adjustment period or over the life of the loan.

A title to a property that is free of legal challenges to ownership.

A meeting to sign documents that transfer property from a seller to a buyer (also referred to as a settlement).

Charges paid at settlement for obtaining a mortgage and transferring a real estate title. It can run to a couple of thousand dollars that pays recording and title fees, a survey, points, transfer taxes and other costs.

A listing of recent home sales in the neighborhood prepared by a real estate agent which is used as a basis for price comparison.

A clause in an agreement that must be met (such as an inspection or an escrow payment) before the agreement becomes binding.

A mortgage loan not insured by a government or quasi-government agency such as the Federal Housing Authority or the Veterans Administration.

The ability to change a loan from an adjustable-rate schedule to a fixed-rate schedule at some point in the future.

A report issued by a credit bureau to a lender that shows if a borrower is a good credit risk.

A document which is officially recorded in government records that transfers real estate from one party to another.

Failing to make your mortgage payments at all or on time.

The part of a home’s cost that the buyer must pay out of his own pocket. A down payment is usually paid at closing.

Money paid to the seller or his real estate broker to show that a buyer is serious about buying. Usually a few thousand dollars.

A landowner can grant a second party the right to use land in a certain way. For example, if you need to cross your neighbor's property to access your tool shed, you would ask your neighbor to grant you an easement. Easements may also restrict changes a buyer can make to a property.

The difference between the market value of a home and what is owed to the mortgage company.

An account set up during the purchase process to hold earnest money or other funds. An account set up by the mortgage company to hold the borrower’s money that’s set aside to pay property taxes, hazard insurance or mortgage insurance.

A federal agency that insures mortgages with lower down-payment requirements than conventional loans.

A mortgage with an interest rate that remains constant over the life of the loan.

The proportion of a purchaser's income that lenders will allow for principal, interest, taxes and insurance (see “PITI”) on a property. This ratio is used in the evaluation of a loan application.

A requirement that sellers fully disclose all known defects in a property.

Protection against damage caused by common hazards. Many lenders require borrowers to carry an insurance amount at least equal to the mortgage.

The cost paid to a lender for borrowed money.

Any claim against a property, including mortgages, unpaid taxes, unpaid repair or contractor bills, or other unpaid charges. Property buyers conduct a title search to determine whether any liens against the property exist. A lien must be filed or recorded with the local county government to be attached to a property title.

A broker helps buyers find a mortgage with one of several lenders he represents.

A letter from a lender agreeing to make a mortgage for a specific property, specifying the loan amount, length of time and other conditions.

A contract in which the borrower’s property is pledged as collateral. The loan is repaid in installments. They buyer promises to repay principal and interest, keep the home insured, pay all taxes and keep the property in good condition.

A charge for the work involved in preparing and servicing a mortgage application (usually 1 percent of the loan amount).

A bid made for a home which is for sale, usually in writing. Offers may be withdrawn without penalty prior to acceptance or rejection but becomes binding if accepted.

The four major components of a monthly home payment: principal, interest, taxes and (hazard) insurance.

A map that shows all boundaries of a piece of property.

A one-time charge assessed by the lender at closing to increase his profits from a mortgage. When charged, points range from 1 to 3 points, or 1 to 3 percent of the loan amount.

Occurs when a home buyer secures a guaranteed mortgage approval (for a specific amount) before making an offer on a house.

Occurs when a mortgage company quickly screens loan applicants in a matter of hours. Final approval typically takes at least a few more days, until which there is no guarantee that the loan will be approved.

The amount borrowed, excluding interest and other charges.

A survey to determine the boundaries of a property. The cost depends on the complexity of the survey.

A charge for recording the transfer of a property paid to the county.

A contract between a seller and a buyer that explains in detail exactly what the purchase includes, what guarantees there are, when the buyer can move in, and what recourse the parties have if the contract is not fulfilled or if the buyer cannot get a mortgage commitment.

A professional examination of a property. A survey usually will reveal the size of a property, its boundary distances and where improvements or alterations have been made.

Evidence (usually in the form of a certificate or deed) of a person’s legal right to own a property.

A company that performs and insures title searches. Usually selected by the seller, they sometimes work as a lender's agent and often host the closing of the transaction.

Anything that is wrong with a title, such as an encroachment, easement or lien that has not been recorded with the city building department or the county recorder's office.

Insurance issued by title companies that protects a property owner against defects to or claims against a property. Typically purchased by the buyer upon closing and usually required by the lender.

Taxes levied on the transfer of property or on real estate loans by state and/or local governments.

A federal agency that insures mortgage loans with very liberal down-payment requirements for honorably discharged veterans and their surviving spouses.

A final inspection of a home before settlement to search for problems that need to be corrected before ownership changes hands.

A promise, either written or implied, that material and workmanship are defect-free. Written warranties on new homes are either backed by insurance companies or by the builders themselves.

Regulations established by local governments regarding the location, height and use for any given piece of property within a specific area.