Adjustable Rate - A loan with periodic adjustments made to the rate and/or payments. 

Amortization - A mortgage is usually paid using the amortization method rather than the simple interest method. In the most simple terms a mortgage balance is paid more slowly at first with larger sums going toward interest at the beginning of the loan. 

Annual Percentage Rate (aka APR) - The annualized percentage rate of the cost of the loan, including the points, interest, fees, etc. 

Appraisal - Document required by the lender to judge the value of the property that is either being purchased or refinanced. 

Assumption - The taking over of mortgage payments by another borrower without taking a new loan out. Title is also taken over by the new borrower. 

 

Buydown - The lowering of the interest rate on a loan in return for a fee. The buydown can be permanent or temporary. 

Cash-Out - This term is used to reflect the new cash proceeds after closing escrow on a refinance loan. If there was a positive net balance above 1% of the new loan balance the loan is considered a cash out loan. 

Condominium - Normally condo units are attached pieces of property. Ownership is of a fraction of the homeowner's association not of the actual property itself. 

Credit Report - Document which details a borrowers payment history. Usually obtained from three major nationwide bureaus. 

Debt to Income Ratio - Ratio of debts (credit card, car payments, mortgage payments, property taxes and insurance) versus gross income. 

Deed - Document which secures the lenders or beneficiary's interest in the property. 

Discount Points - Percentage points paid on the full balance (including funding fee or mortgage insurance premium) of the loan. 

Earnest Money Deposit - Deposit in the form of a check or cash to secure a property during escrow. 

Escrow - Third and neutral party which handles the transfer of documents and funds involved in the purchase or refinance of a piece of property. 

FannieMae (aka FNMA) - Quasi governmental corporation which acts as a conduit for investors to invest in mortgages that are pooled by lending institutions. 

FreddieMac (aka FHLMC) - Same as FannieMae with some slight differences in guidelines and programs. 

Funding - The point at which the proceeds of the loan are sent to escrow for disbursement to all parties involved in the transaction. 

Funding Fee - Fee charged by VA on VA insured loans.

| Home | Programs | Rates | Apply | Contact | First Time Homebuyers | Refinance |
| Mortgage 101 | Buying a Home |

© 2006 Copyright Janus Mortgage  Terms and conditions apply.  Please see our privacy policy for information about how we protect the information you give us.  All rates, programs and fees are subject to change.  Janus Mortgage is a Real Estate Mortgage Broker licensed by the California Department of Real Estate, license number 01078456.