ADJUSTABLE RATE MORTGAGE(ARM):  Blanket term for any loan with changeable terms that provides for periodic interest rate changes at given intervals during the fife of the loan.  Cost rates, fees, terms and conditions of ARM's vary widely from lender to lender.  Other names for these loans include:  Adjustable Rate Loans, Flexible Rate Loans, Variable Interest Rate, Variable Rate Loans and Variable Rate Mortgages.

AMORTIZATION:  Regular, periodic payments covering interest and principal over a set period of time, sesulting in a zero balance at the end of that time.

AMOUNT FINANCED:  Total amount borrowers will pay for use of money.

ANNUAL INTEREST RATE:  Annual cost of money expressed as percentage.

ANNUAL PERCENTAGE RATE (APR):  Credit cost measures, expressed as yearly rate.  Includes interest and other charges.

APPRAISAL:  Supportable opinion or estimation of the worth or market value of property.

APPRECIATION:  Increase in property value due to any cause.

ASSUMABLE MORTGAGE:  Any mortgage which has a features allowing it to be formally and legally transferred to or assumed by another party.

BI-WEEKLY MORTGAGE:  Conventional loan paid every two weeks which substantially reduces interest paid over the life of the loan.

BUDGET LOAN:  A loan arrangement in which a portion of property taxes and insurance are collected by the lender as part of the mortgage payment and held in escrow to pay when due.

CAP:  Limit on the amount an interest rate or monthly payment can change on an ARM.  3 basic types:  Life of loan cap, payment cap and periodic interest rate cap.

CO-BORROWER:  Applies for the loan along with borrower.  Responsible for repayment just as much as the borrower.

CONVENTIONAL LOAN:  Loan made by conventional/institutional lender without direct government participation (insured/guaranteed).

CREDIT REPORT (RESIDENTIAL CREDIT REPORT):  Special credit report required by conventional and government mortgage lenders.

DEBT RATIOS:  Monthly debt divided by gross income resulting in a percentage figure used to qualify borrowers with a lender.

DOWN PAYMENT:  Percentage paid to reduce the full purchase price of a property and normally needed to secure a conventional mortgage.

FEDERAL HOUSING ADMINISTRATION (FHA):  Division of Housing and Urban Development that insures residential loans made by private lenders.

FHLMC (FREDDIE MAC) & FNMA (FANNIE MAE):  Governmental sponsored corporations engaged in acquiring residential mortgages.

FIXED INTEREST RATE:  An interest rate that remains unchanging during the life of the loan.

GNMA (GINNIE MAE):  Governmental corporation responsible for special assistance loan programs.

GRADUATED PAYMENT MORTGAGE (GPM):  Fixed rate loan with lower monthly payments that gradually increase during the first five years of the loan.

INSURED MORTGAGE:  A mortgage insured to protect the mortgagee against loss in the event of a default.

LOAN COST:  Fees, expenses and charges for services rendered in the acquisition of a loan for real estate.

POINTS-(1 POINT=1%):  Fees charged for loan packaging, processing & funding (Loan Fee Points) or to increase the yield to investors in lieu of increasing the loan rate (Discount Points).