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Adjustable Rate Mortgage: A loan that adjusts on a regular schedule. Also called “variable rate mortgage.”

Amortization: The process of paying off a loan with regular payments over a fixed time period.

Amortization Schedule: A timetable for payment of a mortgage showing the amounts of each payment that are applied to interest and principal, as well as the remaining balance.

Application Fee: A one-time fee charged by a lender for processing a borrower’s application for a mortgage loan.

Appraisal: A professional opinion of the market value of a property.

Appreciation: An increase in the value of a house due to changes in market conditions, home improvements or other factors.

Assessed Value: The value placed on a house by a public tax assessor for the purpose of determining property taxes.

Asset: Anything an individual owns that has commercial or exchange value.

Biweekly Mortgage: A loan in which you qualify for a 30-year schedule of monthly payments, but make payments every two weeks to pay off the loan sooner and save money on interest charges.

Borrower: The person who obtains a mortgage loan.

Budget: A financial plan for spending and saving money. Also called “spending plan.”

Buy—Downs: Points a borrower pays in advance to lower the interest rate. Also called “discount points.”

Buyer’s Agent: A real estate professional who enters into a contract-of-agency relationship with the buyer and typically gets paid by splitting the sales commission with the selling, or listing, agent.

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