Mortgage - The conveyance or pledge  of property in security of a loan

Mortgagee - The lender in a loan transaction

Mortgagor - The borrower who pledges or conveys his property to the mortgagee as security for the loan

Adjustable Rate Mortgage (ARM) - A mortgage whose interest rate may be changed at specified times, within specified limits based on a specified index

Annual Percentage Rage (APR) - The finance charge calculated over 1 year taking into consideration all costs of the loan as required by the Truth in Lending Act

Amortization - Paying off a debt by making periodic payments of both principal and interest

Blanket Mortgage - One mortgage which covers more than one property

Fixed Rate Loan - The interest rate remains constant over the life of the loan

Leverage - The use of borrowed money to purchase property

Maturity - The date on which a mortgage or note becomes due

Negative Amortization - When the payment made is less than the interest rate on the mortgage, the principal increases and the borrower owes more than the original principal

PITI - Principal, Interest, Taxes and Insurance, the most common components of the monthly payment

Points - The amount of money the buyer or seller must pay to the lender in order to get the mortgage at a specified interest rate. One point equals 1% of the principal amount

Principal - The dollar amount borrowed when a mortgage is obtained

Principal Balance - The remaining balance due on a loan

Private Mortgage -  Insurance (PMI) - Insurance written by a private insurance company that protects the lender in the event the borrower defaults the loan. The borrower pays premiums

Refinancing - The repayment of a loan by securing another using the same property as security

Second Mortgage - An additional mortgage that is subordinate to the first or primary mortgage. In case of default, the second mortgagee receives his funds only after the first mortgagee is paid

Term - The length of time over which the loan will be repaid

Title Insurance - An insurance policy that protects the owner or mortgagee from losses arising from defects in the title to a parcel of real estate

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