A mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower.
Mortgage Terminology
It is extremely important to have a basic understanding of today’s mortgage terminology. When you understand the fundamentals, you will be better prepared to make informed decisions in connection with your mortgage. Use the menu below to navigate alphabetically to the term you are looking for.
Balloon Payment
The final lump sum payment due at the end of a balloon mortgage.
Bankruptcy
A federal law whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay.
Biweekly Payment Mortgage
A mortgage paid twice a month instead of once a month, reducing the amount of interest to be paid on the loan.
Borrower
A person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms.
Bridge Loan
A short-term loan paid back relatively fast. normally used until a long-term loan can be processed.
Broker
A licensed individual or firm that charges a fee to serve as the mediator between the buyer and seller. mortgage brokers are individuals in the business of arranging funding or negotiating contracts for a client, but who does not loan the money. a real estate broker is someone who helps find a house.
Buy Down
An amount paid to the lender so the lender provides a lower rate and lower payments for a fixed period of time at the beginning of the loan.
