CHAPTER 9 A Mortgage Terms Glossary erms Glossary
Learn the terms and definitions of home loans and mortgages. The following glossary is reprinted from Making Home Affordable, an Official Program of the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development. Below is a list of commonly used terms and definitions (U.S. federal government works are not copyrighted under 17 USC 105). Adjustable-Rate Mortgage (ARM): e (ARM): A mortgage loan with an interest rate that is subject to change and is not fixed at the same level for the life of the loan. These types of loans usually start off with a lower interest rate but can subject the homeowner to payment uncertainty when the rate adjusts. Appraisal: A written estimate of a property’s current market value prepared by a professional appraiser. When a property is appraised in connection with a loan, the appraiser is selected by the lender, but the appraisal fee is usually paid by the homeowner. Balloon Mortgage: A mortgage loan that requires a large payment due upon maturity (for example, at the end of ten years). Chapter 13 Bankruptcy: This type of bankruptcy sets a payment plan between an individual debtor (such as a homeowner) and the creditor monitored by the bankruptcy court. Under a Chapter 13 plan, a homeowner can keep the property, but must make payments according to the court’s terms within a three to five- year period. Chapter 7 Bankruptcy: In the case of an individual debtor, a 87
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