|Adjustable Rate Mortgage (ARM)|
A mortgage whose interest rate changes over time based on an index and a margin. Rate changes are made at prescribed times and within prescribed limits (caps) as defined in the mortgage contract.
|Debt ratio or Debt-to-Income Ratio|
The ratio, expressed as a percentage, is calculated by dividing the monthly payment of long-term debts by gross monthly income.
|Home Owners Association (HOA)|
A nonprofit organization that manages the common areas and services of a planned unit development or condominium project. In a condominium project it has no ownership interest in the common areas; in a planned unit development it holds title to common areas.
A mortgage made subsequent to another and subordinate to the first one.