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Adjustable Rate Mortgage (ARM)

These loans feature periodic interest rate and payment changes.

B/C Paper

A mortgage broker term. This is a class of loan that is used for those who have less than perfect credit, or who have unusual income circumstances. The interest rate will be higher than the standard rate. These loans often include a prepayment penalty.

Closing Costs

Fees and taxes paid by the buyer in conjunction with the mortgage closing and home sale.

Comparables or 'comps'

Real estate slang. Agents and appraisers will attempt to find properties that are similar to yours when discussing the value of your home. Similar properties are called 'comps.'

Conventional loan

Normally refers to a non-governmental insured or guaranteed loan. This is a loan originated by a private source, i.e. bank, savings and loan, etc.

Deed

The document that conveys ownership of real property. It is evidence of ownership. Most deeds are recorded at the county courthouse. There are several types of deeds.

FHA Loan

Federal Housing Administration. This is a government insured loan. The government insured the lender against default by the buyer. The buyer pays for the insurance. There are no income limits on the buyer. The base mortgage limit is currently about $122,000.

Fixed Rate Mortgages

Loans whose interest rate remains constant for the life of the loan. Since the interest rate is constant and the term is known, the principal and interest portion of the payment will not vary.

Government Loan

Either an FHA or VA loan. It is a loan that is insured by or guaranteed by the government.

Lien

An encumbrance on the property. A mortgage is a type of lien.

Mortgage

A lien that is attached to a particular piece of property. A purchase money mortgage is a mortgage that is attached to the property that is being purchased.

Points

A mortgage term that is typically used to refer to 'discount points.' A point, as the word is now used, is simply pre-paid interest. One point equals 1% of the loan amount. Most loans are now quoted with '0' points. If you choose to pay points, your interest rate will normally be reduced. For each point paid, the interest rate will normally be reduced by 1/4 of 1%.

Pre-paid Items

A mortgage term that refers to a class of closing costs. This category usually refers to those funds that are expended for insurance, tax escrows, private mortgage insurance, etc.

Pre-payment Penalty

Some loans penalize you if you pay off your loan early. These loans typically require that you keep the mortgage for 2 to 5 years or pay a penalty to the original lender for the privilege of paying off the loan early.

Settlement Date

The day you buy the property. Settlement is the same as closing, which is the same as delivery of the deed.

Term

The length of the mortgage loan; usually expressed in years.

Title

A term that means ownership. The deed is not the title. It is evidence of it.

Title Insurance

A fee paid, typically by the buyer, to insure that the title has been conveyed free of liens, taxes and other encumbrances.

Title Search

The process by which a person determines property ownership. The searcher checks the county records to determine the owner. They also determine that all types of taxes are paid; mortgages and municipal liens are satisfied, etc.

West Penn Multi-list

A privately owned company that services the real estate community. West Penn is an on-line system that allows all members to access all the listings of all other members. It is an information sharing system.

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