Glossary

Adjustable Rate Mortgage - Back
An adjustable rate mortgage, commonly referred to as an ARM, is a loan type that allows the lender to adjust the interest rate during the term of the loan.  Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change.  Most often these interest rate changes are limited by a rate change cap and a lifetime cap.  If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

Balloon Mortgage - Back
A short-term fixed-rate loan which involves smaller payments for a certain period of time and one large payment for the entire balance due at the end of the loan term.

Bridge Loan - Back
Sometimes called a "swing loan", a bridge loan is generally a loan that is secured by a borrower's current residence to obtain the funds needed to purchase a new home if the current residence will not be sold prior to the purchase of a new home.

FHA Mortgage - Back
A mortgage insured by the Federal Housing Administration (FHA). FHA loans are also known as government mortgages.

Refinancing with Cash Out Options - Back
A refinance loan that provides the borrower with cash that exceeds the amount required to pay off existing mortgages on the home.  This additional cash can be used by the borrower for any purpose.

Term - Back
The loan term is the number of months that you will make monthly payments. If the loan term is the same as the payment calculation term, you will pay the loan in full during the loan term and no balance will be due. If the payment calculation term is greater than the loan term, a balance or "balloon payment" may be due at the end of the loan term.