Adjustable Rate Mortgage (ARM) - A loan that permits the interest rate to be changed periodically. 

Amortization - The gradual reduction of the principle amount of a loan. The loan is reduced as each payment is made toward the principle. 

Appraisal - Estimated value of the property to determine its market value. 

Balloon Mortgage - A mortgage that has a large amount of the principle due at the time of maturity. 

Bridge Loan - A loan that finances a mortgage at the end of one loan and the start of a new one. 

Closing Cost - Expenses and fees that are added to the price of the property, paid by the buyer and the seller at closing. The agreement of Sale states who pays which costs. 

Condominium - The buyer owns title to a residential unit, shares common areas with other unit owners and pays maintenance fees to the condominium association for property upkeep. 

Conventional Loan - Fixed-rate and fixed-term loan made without government insurance. 

Co-op - In exchange for the right to occupy a co-op unit, the buyer owns shares in the co-op corporation (made up of co-op residents), rather than owning real property. 

Equity - The value that the property owner has excluding debts against it. 

Escrow - Funds left in trust with a third party, to be paid to a designated recipient at a designated time. 

Fannie Mae - The Federal National Mortgage Association, which buys and sells FHA and VA mortgages. 

FHA Mortgage - A loan that is insured by the Federal Housing Administration. 

Fixed-Rate Mortgage -A loan that has one set interest rate. 

Market Value  - The highest price the buyer is willing to pay for a property and the lowest price the seller will accept. 

Mortgage - A lien or claim on property given by a buyer to a lender as security for the money borrowed. 

Points - One percent of the amount of the mortgage loan. 

Prepayment - Payment of a mortgage loan, or portion of the loan, before the due date. 

Principle - The basic loan amount, separate from interest, insurance and taxes. 

Title - Proof of ownership. 

Title Search - A check of the records to assure that the buyer is purchasing property, with no liens, encumbrances or other claims which might adversely affect the title's value or marketability. 

VA Mortgage - A loan guaranteed by the Veterans Administration.