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Glossary of terms and acronyms used on this site

There are 93 entries in this glossary.

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Term	Definition
203(b)	FHA's single family program which provides mortgage insurance to lenders to protect against the borrower defaulting; 203(b) is used to finance the purchase of new or existing one to four family housing; 203(b) insured loans are known for requiring a low down payment, flexible qualifying guidelines, limited fees, and a limit on maximum loan amount. Source: www.hud.gov
203(k)	This FHA mortgage insurance program enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan. Source: www.hud.gov
Abstract of Title	Documents recording the ownership of property throughout time. Source: www.hud.gov
Acceleration	The right of the lender to demand payment on the outstanding balance of a loan. Source: www.hud.gov
Affidavit	A signed, sworn statement made by the buyer or seller regarding the truth of information provided. Source: www.hud.gov
Amenity	A feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use; may be natural (like location, woods, water) or man-made (like a swimming pool or garden). Source: www.hud.gov
Amortization	A payment plan that enables you to reduce your debt gradually through monthly payments. The payments may be principal and interest, or interest-only. The monthly amount is based on the schedule for the entire term or length of the loan. Source: www.hud.gov
ARM	Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap. Source: www.hud.gov
As-is Condition	The purchase or sale of a property in its existing condition without repairs. Source: www.hud.gov
Assessed Value	The value that a public official has placed on any asset (used to determine taxes). Source: www.hud.gov
Assessor	A government official who is responsible for determining the value of a property for the purpose of taxation. Source: www.hud.gov
Assumable Mortgage	When a home is sold, the seller may be able to transfer the mortgage to the new buyer. This means the mortgage is assumable. Lenders generally require a credit review of the new borrower and may charge a fee for the assumption. Some mortgages contain a due-on-sale clause, which means that the mortgage may not be transferable to a new buyer. Instead, the lender may make you pay the entire balance that is due when you sell the home. An assumable mortgage can help you attract buyers if you sell your home. Source: www.hud.gov
Balloon Loan or Mortgage	A mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower. Source: www/hud.gov
Bankruptcy	A federal law whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay. Source: www.hud.gov
Biweekly Payment Mortgage	A mortgage paid twice a month instead of once a month, reducing the amount of interest to be paid on the loan. Source: www.hud.gov
Borrower	A person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms. Source: www.hud.gov
Building Code	Based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building. Source: www.hud.gov
Buy Down	The seller pays an amount to the lender so the lender provides a lower rate and lower payments many times for an ARM. The seller may increase the sales price to cover the cost of the buy down. Source: www.hud.gov
Cap	A limit, such as one placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease, either at each adjustment period or during the life of the mortgage. Payment caps do not limit the amount of interest the lender is earning, so they may cause negative amortization. Source: www.hud.gov
Capital Gain	The profit received based on the difference of the original purchase price and the total sale price. Source: www.hud.gov