Mortgage Glossary

Term	Definition
203(K) Loan	A type of government-insured mortgage that allows the borrower to take out one loan for a home purchase or home renovation
Accrued Interest	The amount of interest that has been accrued over time on a loan or other financial obligation but has not yet been paid ou
Adjustable Rate Mortgage (ARM)	A mortgage in which your interest rate and monthly payments may change periodically during the life of the loan, based on the fluctuation of an index. Lenders may charge a lower interest rate for the initial period of the loan. Most ARMs have a rate cap that limits the amount the interest rate can change, both in an adjustment period and over the life of the loan. Also called a variable-rate mortgage.
Agreement/Offer	A verbal and written offer to buy a home for a certain dollar amount made from a buyer to a seller.
Amortization	The gradual reduction in the principal amount owed on a debt. During the earlier years of the loan, most of each payment is applied toward the interest owed. During the final years of the loan, payment amounts are applied almost exclusively to the remaining principal.
Annual Percentage Rate (APR)	The annual cost of a loan to a borrower. Like an interest rate, the APR is expressed as a percentage. Unlike an interest rate, however, it includes other charges or fees (such as mortgage insurance, most closing costs, discounts points and loan origination fees) to reflect the total cost of the loan. The Federal Truth in Lending Act requires that every consumer loan agreement disclose the APR. Since all lenders must follow the same rules to ensure the accuracy of the APR, borrowers can use the APR as a good basis for comparing the costs of similar credit transactions.
Application	The initial documentation provided to a lender to begin the mortgage process which contains personal and financial information about the potential borrowers.
Application Fee	Nonrefundable fees paid when you apply for your loan. These fees may include charges for items such as a credit profile or a property appraisal.
Appraisal	An estimate of how much a home is worth. Appraisals are required during the mortgage process so that the lender can be assured they aren't lending more money than the property is worth. Appraisals are conducted by an independent third party.
Approval	When a lender has reviewed your financial situation and confirmed your ability to take on mortgage payments.
Assessed Value	The value of a property, established by a public tax assessor. The assessed value is used to determine property taxes.
Asset	Property owned by a person or company that can produce economic value.
Automatic Clearing House (ACH)	A computer-based electronic network for processing transactions, usually domestic low value payments, between participating financial institutions. It may support both credit transfers and direct debits.
Balance	The amount left to pay on the mortgage principal.
Balloon Loan	A loan that provides you with lower-than-usual monthly payments for a set period of time followed by a payment larger than usual at the end of your loan repayment period. While a balloon loan may lower your monthly payments it can also mean you make higher interest payments over the life of the loan.
Bankruptcy	A legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts.
Borrower	The primary individual applying for a mortgage who is responsible for making all associated payments and fees for the lifetime of the loan. Additional borrowers are referred to as Co-Borrowers.
Bridge Loan	A type of mortgage financing between the termination of one loan and the start of another loan. For example, a bridge loan might be taken out by a borrower and secured by that borrower’s present home so that the closing on a new house can take place before the present home is sold.
Buyer's Agent	The real estate agent that works on behalf of the homebuyer.
Cash Out Refinance	A refinance transaction in which the new loan amount exceeds the total of the principal balance of the existing first mortgage and any secondary mortgages or liens, together with closing costs and points for the new loan. This excess is usually given to the borrower in cash and can often be used for debt consolidation, home improvement or any other purpose.
Cash to Close	The amount a homebuyer needs in cash at the closing of the loan which includes down payment and closing costs.
Certificate of Title	A statement provided by an abstract company, title company or attorney stating who holds title to real estate based on the public record.
Closing (also called Settlement)	The time and place, at which all documents for your loan are signed, dated, and notarized.
Closing Costs	Aside from your down payment, additional cash will be required at closing. Closing costs cover appraisal fees, loan origination fees, title fees, and other fees required to finalize your loan. Closing costs are typically 3-6% of your total loan amount.
Closing Disclosure (CD)	A closing document which provides key information such as interest rate, monthly payments, and costs to close the loan. Consumers are required to receive this form no later than 3 business days before they close on the loan.
Clear to Close (CTC)	When the underwriter has approved all documentation necessary for the title company to schedule the closing and start drafting the Closing Disclosure.
Co-Borrower	An additional borrower on the loan that has a shared responsibility of loan payments and will share ownership of the property.
Combined Loan-to-Value (CLTV)	The ratio between the unpaid principal amount of your first mortgage, plus your credit limit if you have a home equity line of credit, and the appraised value of your home. Expressed as a percentage.
Commitment	A lender's promise to offer a loan or credit of a specified amount to a borrower.
Concession	The closing costs that the seller has agreed to pay.
Conforming Loan	A mortgage loan that has the standard features as defined by (and is eligible for sale to) Fannie Mae and Freddie Mac.
Conditional Approval	The time when your mortgage underwriter is mostly satisfied with your mortgage application.
Conditions	This includes just about anything that a lender needs to be confident that you can repay your mortgage as agreed.
Consumer Financial Protection Bureau (CFPB)	An agency of the United States government responsible for consumer protection in the financial sector.
Construction Loan	A short-term interim loan for financing the cost of home construction. The lender makes payments to the builder at periodic intervals as the work progresses.
Contingency	A specified condition in a sales contract that must be satisfied before the home sale can occur. When buying a home, the 2 most common contingencies are that the house must pass inspection and that the borrower must be approved for a loan.
Conventional Loan	A home loan that is not insured or guaranteed by the federal government. A conventional loan can be for conforming or non-conforming loan amounts.
Credit	Money which is extended from a lender to a borrower based on that borrower’s credit history.
Credit Bureau	An organization that gathers, records, updates and stores financial and public records of individuals who have been granted credit and provides this information to lenders and other authorized users for a fee. The 3 major credit bureaus are Equifax, Experian and TransUnion and you are legally entitled to receive 1 free report each year from each of these agencies.
Credit Limit	The maximum amount you can borrow under a line of credit.
Credit Report	A record of an individual’s debts and payment habits. It helps a lender determine whether or not a potential borrower is a good business risk. The 3 major credit bureaus that provide credit reports are Equifax, Experian and TransUnion and you are legally entitled to receive 1 free report each year from each of these agencies.
Credit Score	A number that rates the quality of an individual’s credit based on the likelihood that a person will repay a credit obligation, such as a mortgage loan. In general, the higher your credit score, the more likely you are to be approved for and to pay a lower interest rate on a loan.
Debt-to-Income (DTI) Ratio	Your total monthly debt payments (for example: loans, credit cards and court-ordered payments) divided by your gross monthly income before taxes and expressed as a percentage.
Deed	A document that legally transfers ownership of real estate from a seller to a buyer and delivered to the buyer at closing. Before making a loan, a lender will usually require a title search or a title report to make sure the borrower legally owns the real estate tthat is being used to secure the loan.
Delinquency	Failure to make payments on time.
Disclosures	documents in which lenders are obligated to be completely transparent about all the terms of the mortgage agreement that they are offering you.
Discount Points	An amount paid to the lender, typically at closing, to lower (or buy down) the interest rate. One discount point equals one percentage point of the loan amount. For example, 2 points on a $100,000 mortgage would cost $2,000. Negative points indicate the amount to be credited at closing to reduce closing costs.
Down Payment	The amount of cash you put towards your home's purchase price. The purchase price minus your down payment becomes your mortgage loan amount.
Earnest Money Deposit	A deposit made toward a down payment as a sign of good faith. The deposit is typically made when a purchase agreement is signed.
Equal Credit Opportunity Act (ECOA)	A federal law that requires lenders and other creditors to make credit available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equity	The difference between the fair market value (appraised value) of your home and your outstanding mortgage balances and other liens.
Escrow	Funds deposited with a third party, to be held until a specific date is reached and/or a specific condition is met.
Fannie Mae	Federal National Mortgage Association, a government-sponsored enterprise that buys and securitizes mortgages for resale in the secondary market.
Federal Housing Administration (FHA)	An agency of the Department of Housing and Urban Development. The FHA provides mortgage insurance for certain residential mortgages. It also sets standards for underwriting these mortgages and for construction of homes secured by these mortgages.
FHA Loan	Loans from private lenders that are regulated and insured by the Federal Housing Administration (FHA). FHA loans differ from conventional loans because they allow for lower credit scores and down payments as low as 3.5 percent of the total loan amount. Maximum loan amounts vary by county.
FICO Score	An acronym for Fair Isaac Corporation, which develops the mathematical formulas used to produce credit scores for assessing credit risk. FICO scores fall between a low of 300 and a high of 850. The higher the FICO score, the lower credit risk a consumer presents.
First-Time Homebuyer	A borrower who has never taken out a mortgage before; often qualifies for various discounts and first-time buyer grants/perks.
Fixed Rate Mortgage	A home loan with a predetermined fixed interest rate for the entire term of the loan.
Forbearance	A period during which your monthly loan payments are temporarily suspended or reduced. You may qualify for forbearance if you are willing but unable to make loan payments due to certain types of financial hardships. During forbearance, principal payments are postponed but interest continues to accrue.
Foreclosure	A legal procedure in which property securing a defaulted loan is sold by the lender in order to repay a borrower’s loan. The amount paid by a buyer at the foreclosure may not be enough to fully repay the loan and the borrower may continue to owe the lender the difference.
Freddie Mac	A government-sponsored enterprise that buys and securitizes mortgages for resale in the secondary market.
Gift Letter	A gift letter is a statement that ensures your lender the money that came into your account is a gift and not a loan in which you do not have to pay the money back.
Government Mortgage/Loan	A loan that is insured by the Federal Housing Administration (FHA), guaranteed by the Department of Veterans Affairs (VA) or guaranteed by the Rural Housing Service (RHS). The insurance protects the lender (not the borrower) if a borrower defaults on the loan. This insurance enables a lender to provide loan options and benefits often not available through conventional financing.
Grace Period	The set amount of time during which no interest is accruing on credit card debt or not being penalized for a late payment on a mortgage loan.
Gross Income	Your income before deductions for taxes, social security, medicare and any health insurance or retirement account contributions you make
Homeowner's Association (HOA)	A homeowners’ association (HOA), is typically formed to manage shared expenses such as landscaping and other maintenance costs for a planned subdivision or other organized community. Condominium HOAs take on more responsibilities including, for example, the maintenance of driveways, shared structures, and roofs.
Home Equity Line of Credit (HELOC)	A home equity line of credit, or HELOC, is a loan in which the lender agrees to lend a maximum amount within an agreed period, where the collateral is the borrower's equity in their house.
House Flipping	The purchase of a house or property at a reduced market rate for the purpose of a quick turnaround, a “flip,” and profit. Most house flippers must do some renovation or home fix-up in order to turn a profit on a home.
Home Inspection	A home inspection is often part of the home buying process. You typically have the right to hire a home inspector to examine a property and point out its strengths and weaknesses. This is often especially helpful to test a home’s structural and mechanical systems including heating, ventilation, air conditioning, and electrical.
Homeowners Insurance (HOI)	Insurance to protect your home against damage from fire, hurricanes and other catastrophes. Usually, homeowners insurance also covers you against theft and vandalism, as well as personal liability in case someone is hurt or injured on your property. A lender will likely require you to name it as a payee under the insurance if you need to make a claim. Also called hazard insurance.
US Department of Housing and Urban Development (HUD)	An acronym for the U.S. Department of Housing and Urban Development. HUD is a government agency responsible for the implementation and administration of housing and urban development programs. Among other things, HUD administers the Federal Housing Administration, enforces RESPA regulations and oversees Fannie Mae and Freddie Mac.
Income Property	Real estate developed or improved to produce income.
Interest-Only Loan	A loan for which you pay only the interest due for a portion of the loan term. This lowers your periodic payment but does not decrease your principal balance on the loan. Making interest-only payments will result in larger payments being due at the end of the interest-only payment period.
Interest Rate	The annual cost of a loan to a borrower, usually expressed as a percentage. The interest rate does not include fees charged for the loan.
Investment Property	Property that is purchased to generate rental income, or to be sold once it has appreciated in value.
Interest Rate Lock	When a lender agrees to lock-in the interest rate before closing. Lock-ins are generally used with mortgages, allowing homebuyers to ensure the rate does not increase from the time they accept the bank offer to closing on the home.
Jumbo Loan	Also known as a nonconforming loan. The amount of the loan exceeds standards that would make it eligible for sale to Fannie Mae and Freddie Mac. Certain geographical areas have temporary conforming loan limits higher than typical conforming limits. Lenders may charge additional fees and place certain restrictions due to the large loan amounts.
Lender Fees	These fees are all items the lender utilizes in order to process, approve (or decline) and fund your mortgage loan.
Liabilities	A person’s debts or financial obligations. Liabilities include long-term and short-term debt, as well as potential losses from legal claims.
Lien	The legal claim of a creditor on a borrower’s property, to be used as security for a debt.
Line of Credit	An agreement by a lender to extend credit up to a maximum amount for a specified time. In a home equity line of credit, the line of credit is secured by the borrower’s home.
Listing Agent	The agent who lists the home for sale and works on the seller's behalf to sell the home at a price and under terms that are best for their client.
Lock Period	The amount of time prior to closing that you can secure an interest rate for your loan. Lock periods typically range from 30 days to more than 90 days. Generally, the longer the lock period, the more you pay in points or interest.
Loan Commitment	A formal notification from a lender stating that the borrower’s loan has been conditionally approved and specifying the terms under which the lender agrees to make the loan.
Loan Estimate (LE)	Disclosure to help consumers understand the key loan terms and estimated costs of a mortgage before they make a complete application. After a consumer submits 6 key elements: name, income, social security number, property address, estimated property value and desired loan amount, the lender is required to provide this form. All lenders are required to use the same standard loan estimate form to make it easier for consumers to compare and shop for a mortgage.
Loan-to-Value (LTV)	The ratio between the unpaid principal amount of your loan, or your credit limit in the case of a line of credit, and the appraised value of your collateral. Expressed as a percentage. For example, if you have an $80,000 first mortgage on a property with an appraised value of $100,000, the LTV is 80% ($80,000 / $100,000 = 80%).
Liquidity	The ability to buy or sell a security or an asset without the transaction having a significant effect on its price.
Mortgage	A legal document giving a lender a lien on real estate to secure repayment of a loan. Mortgage loans generally run from 10 to 30 years, after which the loan is required to be paid off. Also called deed of trust and/or security deed.
Mortgage Banker	A company or individual that originates mortgages, using their own or borrowed funds.
Mortgage Insurance Premium (MIP)	A required fee added into a FHA loan, paid at closing.
Mortgage Lender	A financial institution or mortgage bank that offers and underwrites home loans.
Mortgage Loan Originator or Loan Officer	An individual who guides mortgage applicants throughout the mortgage approval process, from preparing the loan application through closing.
Multi-Family Residence	A residential property with 2 to 4 individual housing units (duplex, triplex or quadplex).
Multiple Listing Service	A database of all homes currently for sale in a given area.
Nationwide Mortgage Licensing System and Registry (NMLSR)	A mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of mortgage loan originators.
National Association of Realtors	An American trade association for those who work in the real estate industry.
Negative Amortization	The result when monthly payments don’t cover all the interest due on the loan. The unpaid interest is added to the unpaid balance, which means the homebuyer will owe increasingly more than the original amount of the loan.
NMLS ID #	The number permanently assigned by the Nationwide Mortgage Licensing System & Registry (NMLS) for each company, branch, and individual that maintains a single account on NMLS.
Note	The document that you sign at the end of your home closing. It contains all the terms of the agreement between the borrower and the lender and accurately reflects all the terms of the mortgage.
Note Rate	The rate you locked in and used to calculate your monthly principal and interest payment to your lender.
Offer	A verbal and written offer to buy a home for a certain dollar amount made from a buyer to a seller.
Origination	The date that the proceeds of a loan are disbursed.
Origination Fee	A fee imposed by a lender to cover certain processing expenses in connection with making a mortgage loan. Usually a percentage of the amount loaned (often 1%). The origination fee is stated in the form of points.
Owner Occupied	A property that the owner occupies as a principal residence.
Payoff	Payment of the outstanding balance of a loan in full. Also, the amount required to pay the outstanding balance in full.
Per diem interest	The amount of interest that accrues daily on a loan. This is calculated by multiplying the outstanding loan balance by the annual rate of interest, then dividing the result by 365
Points	An amount paid to the lender, typically at closing, to lower (or buy down) the interest rate. One discount point equals one percentage point of the loan amount. For example, 2 points on a $100,000 mortgage would cost $2,000. Negative points indicate the amount to be credited at closing to reduce closing costs. Also called discount points or mortgage points.
Power of Attorney	A legal document that grants an individual the rights to act on behalf of another. For example, if a borrower dies or becomes incapable of managing his or her home loan or mortgage, a power of attorney assigned by that individual could manage his or her mortgage and related decisions.
Pre-Approval	A lender’s conditional agreement to lend a specific amount of money to a homebuyer under a specified set of terms.
Pre-Qualification	The process of providing financial and other information (such as employment history and proposed collateral) by a prospective borrower in order for the lender to preliminarily estimate how much the borrower may obtain for the purchase of a home. A prequalification is not a commitment to lend.
Prepaid Interest	Interest collected at closing of a first mortgage, covering the period from the date of disbursement to the start of the next payment period.
Prepayment Penalty	A penalty assessed by some lenders if a loan is paid off before the specified term. This is a lump-sum amount due and payable in addition to the loan balance, and is usually limited to the early years of a mortgage.
Primary Residence	The property where they usually live, typically a house or an apartment. A person can only have one primary residence at any given time, though they may share the residence with other people.
Principal Balance	The unpaid portion of the loan amount. The principal balance does not include interest or any other charges.
Principal, Interest, Taxes, Insurance (PITI)	An acronym for principal, interest, taxes and insurance. Also referred to as the monthly housing expense.
Private Mortgage Insurance (PMI)	For conventional loans, insurance that protects the lender if you default on your loan. If your down payment is less than 20%, most lenders will require you to pay mortgage insurance. Also called private mortgage insurance (PMI)
Processing	When your personal financial information is collected and verified to ensure all needed documentation is in place before the loan file is sent to underwriting.
Processor	The individual esponsible for assembling, administering and processing your loan application paperwork before it gets approved by the loan underwriter.
Processing Fee	A fee charged to cover the administrative costs of processing a loan request.
Property Insurance	Provides protection against most risks to property, such as fire, theft and some weather damage.
Property Taxes	Property taxes are taxes charged by local jurisdictions, typically at the county level, based upon the value of the property being taxed. Often, property taxes are collected within the homeowner’s monthly mortgage payment, and then paid to the relevant jurisdiction one or more times each year. This is called an escrow account. If the loan does not have an escrow account, then the homeowner will pay the property taxes directly.
Prorate	The process of dividing various property expenses between the buyer and seller in a way that allows each party to only pay for the days he or she owns the property.
Purchase Agreement	A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
Qualifying Ratios	Calculations that are used to determine whether a borrower can qualify for a mortgage. They consist of 2 separate calculations: a housing expense as a percent of income and total debt obligations as a percent of income.
Rate	The amount of interest on a loan, expressed as a percentage.
Rate Lock	A commitment issued by a lender to a borrower guaranteeing a specific interest rate for a specified period of time. Rate lock periods are for a fixed number of days, and rate lock expiration occurs when that period has passed, subjecting the interest rate on the loan to market fluctuations since the date of the initial rate lock. When a rate lock expires, you will need to contact your lending specialist to establish a new rate lock prior to closing your loan.
Real Estate Settlement Procedures Act (RESPA)	A consumer protection law that, among other things, requires advance disclosure of settlement costs to home buyers and sellers, prohibits certain types of referral and other fees, sets rules for escrow accounts and requires notice to borrowers when servicing of a home loan is transferred.
Real Estate Agent	A licensed professional who represents buyers or sellers in real estate transactions such as buying, selling and renting out properties.
Reamortize	To take the remaining balance of a mortgage loan and establish a new period of amortization after which the principal balance will be zero. Typically used after the end of the term of an interest-only loan.
Refinance	Paying off your existing loan with the proceeds from a new loan, generally using the same property as collateral, in order to take advantage of lower monthly payments, lower interest rates or save on financing costs.
Rehabilitation Loan	A first mortgage that enables borrowers to purchase or refinance and rehabilitate homes. With this mortgage product, borrowers can qualify for loan amounts based on the as-completed value of the property, up to the maximum loan limits.
Rescission	The cancellation of a contract. In certain real estate-secured transactions that involve the refinance of a primary residence, applicants have 3 business days to cancel the transaction.
Reserve Account	The savings balance that will be there after you close on your home purchase.
Return on Investment	A measure of the performance and efficiency of an investment.
Reverse Mortgage	A reverse mortgage allows homeowners age 62 or older to borrow against their home equity. It is called a “reverse” mortgage because, instead of making payments to the lender, you receive money from the lender. The money you receive, and the interest charged on the loan, increases the balance of your loan each month. Most reverse mortgages today are called HECMs, short for Home Equity Conversion Mortgage.
Risk	Describes the risk that a bond issuer may fail to make payment when requested or that an insurance company will be unable to pay a claim.
Sales Contract	A real estate sales agreement is a formal written contract made between a homebuyer and seller. The document includes property address, condition, purchase price, inspections, date of closing, date of possession and more.
Second Home	A property occupied part-time by a person in addition to his or her primary residence.
Second Mortgage	A second mortgage or junior lien is a loan you take out using your house as collateral while you still have another loan secured by your house.
Secured Loans	Loans for which the borrower gives the lender a lien on property such as an automobile, boat, other personal property or real estate that will serve as collateral for the loan.
Seller's Agent	A real estate agent that works on behalf of the home seller.
Settlement (also called Closing)	The time and place, at which all documents for your loan are signed, dated, and notarized.
Short Sale	A commonly used alternative to a foreclosure. If a homeowner can no longer afford to make mortgage payments and their home is worth less than they owe, a short sale allows them to sell the home to pay off the mortgage. In a short sale, the lender agrees to accept an amount less than is actually owed on the loan, based on a showing of financial hardship.
Single Family Residence	A detached individual housing unit. The property shares no common ground with neighboring properties and shares no wall or roof, but can be part of a planned unit development (PUD).
Sub-Prime Loan	A high-risk loan packaged with non-conforming loan limits and interest rates that make it possible for homebuyers with poor credit to qualify for a mortgage.
Survey	A survey is a drawing of your property showing the location of the lot, the house and any other structures, as well as any improvements on the property.
Term (Loan Term)	The number of years it will take to pay off a loan. The loan term is used to determine the payment amount, repayment schedule and total interest paid over the life of the loan.
Title Company	The agency that will investigate a property’s title (or deed) for discrepancies or undiscovered liens and that will issue title insurance to the lender after the title is deemed clear.
Title Insurance	Insurance that protects an interested party, either the owner or the lender, against issues that would affect legal ownership of the property.
Truth in Lending Act (TILA)	Protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.
Verification of Deposit (VOD)	A verification of deposit form is a document signed by the bank or other financial institution verifying account balance and history.
Verification of Employment (VOE)	Verification of Employment stands as the process by which financial entities and hiring companies go about reviewing an individual’s current employment status as well as their recent history of employment
US Department of Veterans Affairs (VA)	A mortgage offered through a Department of Veterans Affairs program. Available to active and veteran service personnel and their families, VA loans are backed by the federal government, but issued through private lenders
Underwriter	The person who approves or denies a home loan, based on the lender’s underwriting and approval criteria.
Underwriting	The lender’s process of deciding whether to make a loan to a potential borrower based on credit, employment, assets and other factors, and the matching of this risk to an appropriate rate, term and loan amount.
Uniform Residential Loan Application (URLA - 1003)	The standard loan application form published by the Federal National Mortgage Association (Fannie Mae) and used by most lenders.
Unpaid Principle Balance	Unpaid Principal Balance, is the amount you borrowed (which may include amounts that have been added to your principal balance in connection with loan modifications) over the history of the loan that has not yet been paid back. Interest may be charged each month on the Unpaid Principal Balance (or amount owed), according to the terms of your loan.
Unsecured Loan	Typically used when referring to a loan or a line of credit (unsecured loan, unsecured line of credit) that is not backed by collateral.
Upfront Costs	The costs you must pay when applying for a loan. Typically these include loan application fees. Some lenders require some of your closing costs also be paid when you apply.
VA Loan	A mortgage that is guaranteed by the Department of Veterans Affairs (VA) for qualified veterans of U.S. military forces.
Vacation Home	A vacation home is a single-family property that the borrower occupies in addition to his or her primary residence. The property cannot be considered income-producing and must not be part of a mandatory rental pool, but occasionally may be rented to friends and relatives. When property is classified as a second home, rental income may not be used to qualify the applicant. A 2- to 4-unit property is not eligible for second home status.
Variable Rate	An interest rate that may fluctuate or change periodically, often in relation to an index such as the prime rate or other criteria. Payments may increase or decrease accordingly.
W-2	A wage and tax statement provided by your employer annually. The W-2 form details your income and the various local and federal taxes withheld from your income. It is provided to the IRS along with your tax return.
Walk-through	A final inspection shortly before closing to make sure the property is in the same condition that it was at the time the offer contract was written.
Wire Transfer	A transfer of money from one person’s bank to another person’s bank account, either domestically or internationally.
Year-End Statement	The report shows how much was paid in interest during the year, as well as the remaining mortgage loan balance at the end of the year. If the bank has an impound account for you, it will also show how much was paid and reserved in property taxes. If the bank does not have a property tax impound account, then tax details are not displayed on the report.

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