Real Estate Terms and Definitions

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. Housing counseling agency Provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and homebuying. Amortization Repayment of a mortgage loan through monthly installments of principal and interest; the monthly payment amount is based on a schedule that will allow you to own your home at the end of a specific time period (for example, 15 or 30 years) Appraisal A qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate. Fixed-rate mortgage A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change. PMI Private Mortgage Insurance; privately-owned companies that offer standard and special affordable mortgage insurance programs for qualified borrowers with down payments of less than 20% of a purchase price. Federally Assisted Projects A federally assisted project is one which receives Federal reimbursement or payment of some project expenses such as planning, construction, right-of-way acquisition, and property management. Interest rate The amount of interest charged on a monthly loan payment; usually expressed as a percentage. Flood insurance Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a 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.

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	Did You Know?
	Do not ignore the letters from your lender If you are having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help. Stay in your home for now. You may not qualify for assistance if you abandon your property.