Mortgage Terms

Adjustable-Rate Mortgage (ARM):

A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.

Credit History:

A record of an individual’s repayment of debt. Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.

Down Payment:

The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

Equal Credit Opportunity Act: (ECOA)

A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Escrow Account:

Once you close your purchase transaction, you may have an escrow account or impound account with your lender. This means the amount you pay each month includes an amount above what would be required if you were only paying your principal and interest. The extra money is held in your impound account (escrow account) for the payment of items like property taxes and homeowner’s insurance when they come due. The lender pays them with your money instead of you paying them yourself.

Fair Market Value:

The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

FHA Mortgage:

A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a government loan.

Fixed-Rate Mortgage:

A mortgage in which the interest rate does not change during the entire term of the loan.

Pre-Qualification:

This usually refers to the loan officer’s written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.

Title Company:

A company that specializes in examining and insuring titles to real estate.

Contact me to receive more information on your home buying or selling process. You may reach me directly at
sheryl [at] sherylmoser.com or call 405-350-3031 or visit my Contact Page to send me a message.