AMORTIZATION - Means loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

APPRAISAL - An estimate of the value of property, made by a qualified professional called an "appraiser".

CERTIFICATE OF VETERAN STATUS - The document given to veterans or reservists who have served 90 days of continuous active duty (including training time) or 6 years in the reserves. It may be obtained by sending DD 214 to the local VA office with form 26-8261a (request for certificate of veteran status). This document enables veterans to obtain lower down payments on certain FHA insured loans.

CREDIT REPORT - A report documenting the credit history and current status of a borrower's credit standing.

EQUITY - The value an owner has in real estate over and above the obligation against the property.

FHA LOAN - A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans ($155,250), they are generous enough to handle moderately-priced homes almost anywhere in the country.

FHA - Federal Housing Administration

FANNIE MAE - see Federal National Mortgage Association.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - also know as "Fannie Mae" A private corporation, federally chartered to provide financial products and services that increase the availability and affordability of housing for low-, moderate-, and middle-income Americans. The largest corporation in America, Fannie Mae has $287 billion in assets and an additional $544 billion in Mortgage-Backed Securities outstanding. Next to the U.S. Treasury, it is often the second largest borrower in the capital markets. Fannie Mae is traded on the New York Stock Exchange (FNM) and has approximately 190,000 shareholders.

ORIGINATION FEE - The fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property; usually computed as a percentage of the face value of the loan.

PERMANENT LOAN - A long term mortgage, usually ten years or more. Also called an "end loan."

RECORDING FEES - Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.

SETTLEMENT/SETTLEMENT COSTS - see closing/closing costs

BUY-DOWN - The action to pay additional discount points (buy down subsidy) to the lender in exchange for a lower interest rate. The reduced rate may apply for all or a portion of the loan term. This subsidy amount may be paid by the buyer, lender, seller or a combination of parties.

DEFAULT - Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage.

CONSTRUCTION LOAN - A short term interim loan for financing the cost of construction. The lender advance funds to the builder at periodic intervals as the work progresses.

MARKET VALUE - The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.

MORTGAGE INSURANCE - Money paid to insure the mortgage when the down payment is less than 20 percent. See private mortgage insurance, FHA mortgage insurance.

APR - Annual Percentage Rate