Escrow account
A separate account into which the lender puts a portion of each monthly mortgage payment an escrow account provides the funds needed for such expenses as property taxes homeowners insurance mortgage insurance etc.

Credit report
A record that lists all past and present debts and the timeliness of their repayment it documents an individuals credit history.

Good faith estimate
An estimate of all closing fees including pre-paid and escrow items as well as lender charges must be given to the borrower within three days after submission of a loan application.

Offer
Indication by a potential buyer of a willingness to purchase a home at a specific price generally put forth in writing.

Fair Housing Act
A law that prohibits discrimination in all facets of the homebuying process on the basis of race color national origin religion sex familial status or disability.

Balloon Mortgage
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.

Interest
A fee charged for the use of money .

Loan fraud
Purposely giving incorrect information on a loan application in order to better qualify for a loan may result in civil liability or criminal penalties.

Rehabilitation mortgage
A mortgage that covers the costs of rehabilitating repairing or Improving a property some rehabilitation mortgages - like the FHAs 203k - allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.

Lien
A legal claim against property that must be satisfied When the property is sold