Accelerated Clause: A provision that gives the lender the right to demand payment, of the entire loan balance, if the borrower violates any of the clauses in the note.

Annual Percent Rate: Interest rate that reflects the cost of the mortgage as a yearly rate. This is usually higher than the stated rate because it accounts for points and other credit costs.

Appraisal: The market value of the property, made by a licensed appraiser.

Cash reserve: Cash available to make the first two mortgage payments after closing.

Closing: When both seller and buyer sign final documents, usually at a title company and closing cost monies are delivered.

Commitment: Promise by lender to make a loan on agreed terms to borrower

Contingency: a condition that must be met before a contract is legally binding.

Deed: The legal document which gives title to a property.

Delinquency: Failure to make payments on time.

Depreciation: A decline in the value of property.

Down Payment: Money paid to make up the difference between the sales price and the mortgage loan.

Earnest Money: Money given by buyer as part of the contract terms which shows good faith usually placed in escrow at the closing title company.

Escrow: Money held in a non interest account, by mortgage lender to pay taxes and insurance when due.

Foreclosure: Legal process by which the lender or seller forces a sale of a property because borrower has not followed the terms of the loan.

Fixed rate mortgage: A mortgage that carries a fix interest rate for the full term of the loan.

Hazard Insurance: a form of insurance in which the insurance protects the Insured from specific losses such as fire.

Homeowner's Insurance: Insurance that covers liability and hazard on a property.

Homeowner's warranty: A warranty that covers specific types of repairs for a specific time on a property.

Interest: A fee charged which is usually a percentage, by the lender for borrowing money.

Interim Financing: In construction, usually the builder requests a loan to construct and or build the project this is also know as an interim loan.

Lien: a legal claim again a property that must be resolved prior to the sale of said property.

Mortgage: Legal document that ties the property to the lender as security for payment.

Mortgage Insurance: Money paid to insure the mortgage when the down payment is less than 20 percent. This protects the lender in the event of default on the note.

Mortgagee: the lender

Mortgagor: the borrower

Origination Fee: this is a fee charged by the lender to set up the loan, process the documents usually a percentage of the loan amount.

PITI: Principal, interest, taxes and insurance

Points: Each point is equal to one percent of the loan. Loan discount points are prepaid interest assessed at closing by the lender.

Pre-Payment Penalty: Fee charged for early payoff of a debt.

Principal: the amount of debt owed not including interest.

Recording Fees: Money paid to the lender for recording the property sale making it part of public records.

Title: The document that gives evidence of ownership

Title Insurance: Insurance policy issued by a title company insures against errors in title search. Fee is usually based on a rate based on the value of the property.

Underwriting: The process in which the lender submits the loan package for full approval.