MortgageReal Estate Glossary

More Definitions

• Alternative Financing
  A mortgage for individuals with less than perfect credit, undocumented income or any non-standard financial criteria.
• ARM (Adjustable Rate Mortgage)
  A mortgage which allows the lender to adjust the interest rate in accordance with a specified index and margin periodically, as agreed to at the inception of the loan.
• Balloon Mortgage
  A mortgage in which the payments do not fully amortize the loan. The balance of the mortgage is due in a lump sum at a specified date, usually at the end of the term. Some balloon payment loans allow the borrower to convert to a different loan program at the time the final lump sum is due.
• Bridge Loan
  A short-term loan used to provide funds to close on another residential property when the current property has not yet closed.
• Construction Loan
  A loan used for funding the construction of improvements or building(s) on property.
• Conventional Mortgage
  A mortgage loan that is made without FHA insurance, USDA insurance, state bond insurance or VA guarantee.
• Equity Loan
  A long-term loan secured by residential property where the funds are used to purchase another residential property.
• FHA Loan (Federal Housing Administration)
  A mortgage which is partially insured by FHA, usually assumable, and may have reduced down payment requirements compared to conventional mortgages.
• First Mortgages
  Loans secured by real estate used to purchase or refinance residential property where there is no other loan secured by that property.
• Fixed Rate Mortgage
  A mortgage in which the interest rate and payment is fixed over the entire loan term.
• Government Mortgage
  A mortgage loan where a government or quasi-government agency insures or guarantees a portion of the loan based on certain conditions.
• Jumbo Mortgage
  A mortgage which is larger than the legislated purchase limits of Fannie Mae and Freddie Mac (currently $240,000).
• Pre-Approvals
  A full loan commitment that is obtained prior to identifying the property.
• Second Mortgage
  Loans where residential property is used as the collateral. There is already an existing first mortgage, or the second mortgage is done in tandem with the first mortgage.
• USDA Loan (United States Department of Agriculture)
  A mortgage where USDA, a federal agency, guarantees mortgages in specified rural areas.
• VA Loan (Veteran's Administration)
  A mortgage where the Veteran's Administration provides assistance to veterans of the United States Armed Forces by partially guaranteeing loans to veterans with low or zero down payments.