(ARMs) Mortgage loans in which the interest rate and monthly payments may be adjusted periodically to correspond with changes in the cost of funds.

Also referred to as “Time Saver” documentation, whereby lenders use certified copies of documents from the borrower in lieu of mailing our written verifications, i.e. copies of three months bank statements instead of a verification of deposit.

Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments.

A schedule showing each payment of a loan to be amortized and breaking down the payment into the amount applied to principal and the amount applied to interest.

(APR) This is the cost of your credit expressed in terms of an annual rate. Because you may be paying “points” and other closing costs, the APR disclosed is often higher than the interest rate on your loan. The APR can be compared to the APR for other loans for which you may have applied to give you a fair method of comparing price.

(Uniform Residential Loan Application) Loan application

Estimation of the current market value of the property by a certified appraiser. The appraiser determines the value by comparing at least three different properties which are similar in regards to location, construction type, and price that are located within a one mile radius and have been sold within the last 12 months.

(Annual Percentage Rate) This is the cost of your credit expressed in terms of an annual rate. Because you may be paying “points” and other closing costs, the APR disclosed is often higher than the interest rate on your loan. The APR can be compared to the APR for other loans for which you may have applied to give you a fair method of comparing price.

(Adjustable Rate Mortgage) Mortgage loans in which the interest rate and monthly payments may be adjusted periodically to correspond with changes in the cost of funds.

Lender’s charge for paperwork involved in processing records for a new buyer assuming an existing loan.

Some types of mortgages allow for the transfer of mortgage on the property during real estate purchase transaction to the new homeowner. Although most banks reserve the right to call (or demand payment of) the loan when the property is sold which means that the buyer must look for a new mortgage.

Direct debit is an automatic payment which is directly withdrawn from a personal checking account.