Acceleration clause: A provision in a mortgage that gives the lender the right to demand payment of the entire outstanding balance if a monthly payment is missed.

Adjustable-rate mortgage (ARM): A mortgage whose interest rate changes over time based on an index and a margin.  Rate changes are made in prescribed times and within prescribed limits (caps) as defined in the mortgage contract.

Amortization: The gradual repayment of a mortgage by installments.

Amortization schedule: A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance on the loan.

Annual percentage rate (APR): The total yearly cost of a mortgage stated as a percentage of the loan amount. This includes the base interest rate, mortgage insurance, origination fees, and some other related fees.  See your lender for a more complete explanation of what fees are used to calculate your APR.

Appraisal: The process of estimating and supporting an opinion of value.

Appreciation: An increase in the value of a house due to changes in market conditions or other causes.

As Is: A contract clause indicating the seller will not fix any problems with the property.

Assessed value: The valuation placed upon a property by a public tax assessor for purposes of taxation.

Assumable mortgage: A mortgage that can be taken over ("assumed") by the buyer when a home is sold.

Assumption: The transfer of the seller's existing mortgage to the buyer.

Binder: A preliminary agreement, secured by the payment of earnest money, under which a buyer offers to purchase real estate.

Cap: A provision of an ARM limiting how much the interest rate or mortgage payments may increase.

Cash reserve: A requirement of some lenders that buyers have sufficient cash remaining after closing to make the first two mortgage payments.

Clear title: A title that is free of liens and legal questions as to ownership of the property.

Closing: The occasion where a sale is finalized; the buyer signs the mortgage, and closing costs are paid.  Also called "settlement."

Closing Costs: Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Also called "settlement costs."

Commitment Letter: A formal offer by a lender stating the terms under which it agrees to loan money to a home buyer.

Competitive market analysis (CMA): A comparison approach used by real estate professionals to help sellers set a likely selling price for property.

Condominium: A form of property ownership in which each occupant of a multiunit building owns his or her dwelling unit separately and an undivided interest with other owners in the property's common elements (lobbies, hallways, etc.).

Condominium bylaws: Rules passed by the condominium owners' association that are used to administer the property.

Condominium owners' association: An association of all the owners in a condominium. They may elect a Board of Directors to oversee the administration and management of the condominium.

Contingency: A condition that must be met before a contract is legally binding.

Construction loan: A loan that provides funds for real estate projects.  The lender usually disburses the money as work is completed (called draws).

Conventional mortgage: Any mortgage that is not insured or guaranteed by the federal government.

Convertible ARM: An adjustable-rate mortgage that can be converted to a fixed rate mortgage under specified conditions.

Cooperatives (Co-ops): A form of property ownership in which a corporation owns the building and the tenants purchase shares in the corporation that give them a right to occupy a unit in the building.