Glossary

If you're like most people, you're not exactly an expert when it comes to mortgages. We know there's a lot to take in and that can be difficult if you're not familiar with certain key terms. Fortunately at Interest Only Refinance Online, we have a team of experts committed to helping you through the refinancing process. They've put together this helpful glossary section of important mortgage terms you should know:

Amortization - A mortgage payment plan that allows you to gradually pay off your home loan. Can consist of interest or principal payments, or a combination of both.
Annual Percentage Rate - Often referred to as APR, a mortgage's annual percentage rate is the cost of the loan expressed in a yearly rate.
Cap - This is the limit to which an interest rate can be increased, usually refers to adjustable rate mortgages.
Credit History - A detailed record of an individual's debts and their repayment history. Your credit history is important in determining your mortgage terms.
Default - A borrower's inability to make their mortgage payments as the terms solicit. Typically borrowers are considered to have defaulted after 60-90 days.
Delinquency - A borrower's failure to make their mortgage payment on time. Lenders may asses fees to delinquent payments.
Equity - A homeowner's financial interest in their property, the amount of their mortgage that has been paid off.
Foreclosure - A legal process in which the borrower's home is sold to pay off their defaulted mortgage.
Lender - The bank or party that borrows money to consumers through mortgages.
Mature Date - Sometimes referred to as maturity, the date at which the principal balance and interest charges on a mortgage must be repaid.
Mortgage Acceleration Clause - A provision in a mortgage term that allows the lender to demand the loan's principal balance to be repaid immediately under specific circumstances.
Prime Rate - The best interest rate that a specific lender can offer, usually reserved for individuals with the best credit histories.
Principal - The balance of a mortgage that has yet to be repaid, not including interest.
Refinancing - Refinancing is the process of paying off a mortgage with the proceeds of a new one, usually in order to obtain better terms.
Secured Loan - A loan that is backed by collateral or property, a mortgage is a type of secured loan.
Sub-Prime Rate - Refers to the interest rates that lenders can offer to those with less than pristine credit histories.
Term - The length and interest rate of a mortgage, as agreed upon by the lender and borrower.
Title - A legal document which provides proof of ownership of property.
Underwriting - The decision making process involved with approving a mortgage, based on the borrower's credit history, income, and other factors.