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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. |
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First Mortgage
A real estate loan with a lien (i.e., mortgage or deed of trust) on the subject property that has priority over any subsequently lien or financial encumbrances. |
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Interest-only payments
Mortgage payments that include only interest. No loan amortization occurs and, thus, the homeowner does not accrue any equity (unless the home value increases). |
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Title Search
An examination performed by a title company of the public records, including court decisions, to disclose facts concerning the ownership of real estate. The title examiner prepares an Abstract and the title agent prepares a Binder but decisions regarding the legal sufficiency of title or questions requiring legal interpretation must be resolved by a licensed attorney at law. |
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