MORTGAGE DICTIONARY

A written or verbal of an offer to buy a home, made from the seller to the buyer.

Change to an existing contract. Prior to the signing of a valid legal contract parties use addenda to clarify a portion of the original document or alter the terms of the contract.

A mortgage with a variable interest rate. This can adjust monthly, biannually, or annually. Option-arms and hybrid mortgages are also considered adjustable-rate mortgage.

On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index.

The way a loan is paid off over time in installments, detailing how much goes toward interest, and how much is paid through principal.

The truest cost of a home loan.

An estimate of the value of the property, made by a qualified professional 'Appraiser.'

Agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money. Since this is an existing mortgage debt, unlike a new mortgage where closing costs and new, possibly higher, market-rate interest charge will apply.