Interest rate cap: A provision of an ARM limiting how much interest rates may be increased in a given adjustment period.  See also "Lifetime cap."

Joint tenancy: A form of co-ownership giving each tenant equal interest and equal rights in the property, including the right of survivorship.

Junk Fees: Fees that are outside of the normal lender fees that may have official sounding names that pad the loan price.

Late charge: The penalty a borrower must pay when a payment is made after the due date.

Lien: A legal claim against a property that must be paid when the property is sold.

Lifetime cap: A provision of an ARM that limits the total increase in interest rates over the life of the loan.

Loan servicing: The collection of mortgage payments from borrowers and the related responsibilities of a loan servicer, such as foreclosure, tax and insurance escrow, etc.

Lock-in: A written agreement guaranteeing the homebuyer a specified interest rate provided the loan closes with that buyer within a set period of time.

Margin: The set percentage the lender adds to the index rate to determine the current interest rate of an ARM.

Mortgage: A legal document that pledges a property to the lender as security for payment of a debt, usually a loan on the house itself.

Mortgage banker: A company that originates mortgages exclusively for resale in the secondary market (such as to GNMA, FNMA and FHMLC).

Mortgage broker: A company that for a fee matches borrowers with lenders.

Mortgage insurance premium (MIP): Fee paid by a borrower to FHA or a private insurer for mortgage insurance.

Mortgage note: A legal document obliging a borrower to repay a loan at a stated interest rate during a specified period of time: the agreement is secured by a mortgage.

Mortgagee: The lender in a mortgage agreement.

Mortgagor: The borrower in a mortgage agreement.

Negative amoritization: Payment terms under which the borrower's monthly payments do not cover the interest due: as a result, the balance due is added to the loan balance making it rise.

No-document loan: A loan in which the borrower does not have to prove income or assets.

Non-conforming loan: A mortgage not eligible for sale and delivery on the secondary market for various reasons, including the loan amount, loan characteristics or underwriting guidelines.

Notice of default: A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Origination fee: A fee paid to a lender for processing a loan application; it is stated as a percentage of the loan amount. (1% is generally known as one point).

Owner financing: A purchase in which the seller provides all or part of the financing.

Payment cap: A provision of some ARM's limiting how much the interest rate increases.

PITI: An acronym describing principal (P), interest (I), taxes (T), insurance (I), the most common components of a mortgage.

Points: Are interest, usually paid at closing. A point is 1% of the loan amounts.

Pre-approval: A commitment from a lender to make a loan after their review of pertinent documents.

Predatory Loans: High interest, excessive fee loans.

Pre-payment penalty: A fee charged to a borrower who pays off a loan before it is due.

Pre-qualification: The process before the borrower is pre-approved or the loan applied for, how much home a borrower is able to afford.

Principal: The amount borrowed or remaining unpaid; also, that part of the monthly payment that reduces the outstanding balance of a mortgage.