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Don't know the difference between Balloon Mortgage and First Mortgage? Look for the definition of these and other real estate terms in our handy Real Estate Glossary below.

Adjustable-rate mortgage (ARM)	A mortgage that permits the lender to adjust its interest rate periodically on the basis of movement in a specified index. Also used collectively to refer to ARMs and graduated-payment adjustable-rate mortgages (GPARMs).
Agreement of Sale	A contract to purchase a property which is legally binding between Buyer and Seller and is signed by all parties involved.
Amortization	Gradual reduction of the mortgage debt through periodic payments scheduled over the mortgage term.
Appraisal	A report that sets forth an estimate or opinion of value.
Assumption	A method of selling real estate wherein the property purchaser agrees to take over the primary liability for payment of an existing mortgage.
Balloon Mortgage	A mortgage that has level monthly payments that will fully amortize it over a stated term, but which provides for a lump-sum payment to be due at the end of an earlier specified term.
Balloon Payment	The remaining balance of a mortgage that must be paid in a lump sum at the end of the mortgage term. The amount may represent slightly more than a monthly payment or may be substantial
Bankruptcy	A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring them to a trustee. It impacts the debtor’s personal liability for mortgage debt but does not affect the lien of the mortgage.
Biweekly payment mortgage	A mortgage that requires payments every two weeks (instead of the traditional monthly-payment).
Bridge Loan	A form of second deed of trust collateralized by a borrower's current home (usually pending sale) such that it allows the proceeds to be used for closing on a new property before the present home is sold.
"Cash-out" refinance transaction	In other words , a refinance transaction resulting in excess cash which the borrower can use for any purpose.
Closing costs	Money paid by the borrower to fund the closing of a mortgage loan. This could include an origination fee, title insurance, survey, appraisal, credit report, flood letter, recording fees, as well as perhaps prepaid Homeowners Insurance, taxes and insurance escrow payments.
Community Home Buyers Program	One of the community lending models under which Fannie Mae and the mortgage insurers offer flexible underwriting guidelines to increase a low- or moderate-income family's buying power and to decrease the total amount of cash needed to purchase a home.
Conventional mortgage	A mortgage that is not insured or guaranteed by the federal government.
Debt (secured or unsecured)	Borrowed money subject to an established repayment schedule.
Debt-to-income-ratios	Calculations that are used in determining whether a borrower can qualify for a mortgage. They consist of a monthly housing expense-to-income ratio and a total obligations-to-income ratio.
Deed-in-lieu	A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure; also called a voluntary conveyance.
Discount points	A unit that represents the cost of money charged by a lender. One point is equal to 1% of the mortgage amount.
Earnest money deposit	Money paid by the purchaser of real estate upon reaching a verbal agreement for the sale of the property to show an offer made in "good faith."
Escrow account	A trust account established to hold funds allocated for the payment of real estate taxes, homeowners insurance and mortgage insurance premiums, etc. until they are disbursed to pay the related bills.
Equity	The current value of your home minus your present loan balance.
FHA	Federal Housing Administration: an agency that insures mortgages made by private lenders.
FHA mortgage	A mortgage that is insured by the FHA; a/k/a "government" mortgage.
FHLMC	Federal Home Loan Mortgage Corporation (Freddie Mac): a corporation chartered by Congress that purchases conventional mortgages in the secondary mortgage market.
First mortgage	A mortgage that is the primary lien against a property.
Fixed-rate mortgage	A mortgage that provides for only one interest rate for the entire term of the mortgage.
Foreclosure	The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property.
Hold Harmless	An agreement made between a Buyer and a Seller allowing the Buyer to take possession of the property prior to settlement.
Home equity line-of-credit loan	A mortgage loan (usually subordinate) allowing the borrower to obtain multiple advances of the loan proceeds up to a specified percentage of the borrower's equity in a property.
Homeowner's insurance	Insurance coverage available for owner-occupied properties to protect against personal liability and physical property damages for a dwelling and its contents.
HUD	Department of Housing and Urban Development.
Index	A number derived from a formula used as an indicator for determining interest rate changes on adjustable-rate mortgages.
In-file credit report	A computer generated account of credit and legal information obtained from a credit repository.
Initial interest rate	The original interest rate of the mortgage when it is closed.
Installment debt	Borrowed money that is repaid in successive payments, usually at regular intervals, for a specific amount and a specified term.
Interest rate buydown plan	An arrangement whereby funds are deposited to an account and released each month to reduce a mortgagor's monthly payments during the early years of a mortgage.
Kick-out clause	An addendum to the agreement of sale allowing the Seller to continue marketing their home to other buyers, while waiting for the main Buyer to sell their home first.
Mortgage	Collectively, the security instrument, the note, the title policy, and all other documents and papers that evidence the debt.
Origination fees	The fee(s), usually a percentage of the face value of the mortgage, charged by a lender to prepare loan documents, check credit, etc.
Prepayment penalty	A charge that may be required during the early years of a mortgage if mortgagor pays in full or in large sums to reduce the unpaid balance.
Rehabilitation mortgage	A mortgage created to cover the costs of repairing, improving, and sometimes acquiring an existing property.
Revolving debt	An arrangement for credit in which the customer receives ongoing purchases or services prior to payment with repayment at regular intervals with no specified amount or term.
Second mortgage	A mortgage that has a lien position subordinate to the first mortgage.
Settlement	The final process when Buyer and Seller meet to sign all the papers transferring property to the Buyer.
Title insurance	A type of insurance that insures against defects in title that were not listed in the title report or abstract.