The scheduled payment less the interest (link to interest term) that therefore equals the amount of principal paid.

A professional written report and estimate of the property’s current market value. This is requested by the lender but usually paid for by the borrower.

A type of property sale in which the buyer takes over the remaining payments on the loan that already exists in the seller’s name.

The transaction of the transferring ownership rights of the property from the seller to the buyer. This includes the completion of all documentation as well as the transfer of funds.

Additional signors on the loan (link to loan term) that are equally responsible for repayment.

A percentage of the value of the loan paid upfront as a type of deposit. The smallest percentage generally accepted is 3.0% (IE 3.0% of $100,000.00 is $3,000.00) but 20.0% is the standard amount of a down payment.

Money required before beginning the sale process. This is generally requested for homes that have not yet been built and can be used later as all or part of a down payment.

The value of the home less the outstand balance of the loan (link to loan term).

The agreement of both buyer and seller (if applicable) that any funds due are kept with a third party for security. This is common for down payments, property taxes and certain forms of insurance such as private mortgage insurance.

A charge for borrowed money based off of a percentage of your loan (link to loan term) amount. Your interest rate will vary based on the current market, the amount of your loan (link to loan term) and your credit history.

The lender’s right to claim the property in the event of a default on the scheduled loan (link to loan term) payments.

The amount borrowed by the buyer to purchase the property. The amount is subject to interest and the lender will place a lien on the property until the balance of the loan is paid in full.

The lien against your property when you secure a loan. This lien becomes void when the balance of the loan is paid in full.

A percentage, usually of the amount of the mortgage (link to mortgage term). The amount of points expressed equals that percentage. IE: 5 points equals 5.0%

The amount of loan relative to the value of the property or the amount of the loan less interest.

Insurance required by most lenders to secure the loan against defaulted payments. This is generally required on loans in which less than 20.0% of the value was submitted as a down payment.

Taxes due to the state in which the property is held for school and other local funding needs. Taxes are usually kept in escrow (link to escrow term) and are paid monthly along with the mortgage payment as opposed to paying twice a year as the taxes are due.

Securing a new loan to pay the remaining balance on a previously existing loan. This is usually done to secure a lower interest rate.

The total amount due at closing that a borrower pays into escrow. This includes any prorated interest amount for the balance of the month as well as any commissions or other fees.

The lender’s process of examining all data related to the borrower, the loan and the property in question to determine whether or not the buyer qualifies for the requested amount.