Glossary

Having inadequate cash to meet current obligations. Real property is considered an illiquid investment because of the time and effort required to convert it to cash.

Form of agency that occurs when the words and actions of the parties indicate that there is an agency relationship.

A contract created by actions, but not necessarily written or spoken.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.

A fund set aside for future needs, such as an escrow or reserve account.

An impound refers to the funds a mortgagor pays to the lender along with their monthly principal and interest payments for the payment of real estates taxes and hazard insurance. This is also referred to as an escrow account. The money is held by the lender to make payments when they are due.

A computer-generated report containing credit and legal information obtained from one of the main credit bureaus.

Real estate developed and improved to produce steady income.

A published interest rate used to establish the interest rate offered on an Adjustable Rate Mortgage (ARM). Some of the most common indices are treasury bills, treasury securities, London Inter-Bank Offering Rates (LIBOR) and the Cost of Funds Index (COFI).

An index of eleven indicators designed to forecast the strength of the economy six to nine months in the future. Frequency: monthly. Source: Commerce Department.

A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund. Individuals can place IRA funds in bank accounts or in other forms of investment such as stocks, bonds, or mutual funds.

A fixed-weight measure of physical output of the nation's factories, mines and utilities. Monthly percent changes in the index reflect the rate of change in output. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. Frequency: monthly. Source: Federal Reserve.

An increase in the amount of money or credit available relative to the amount of goods or services available. Inflation causes an increase in the general price level of goods and services. Over prolonged periods, inflation can reduce the purchasing power of a dollar, making it worth less.

The original, starting interest rate of a loan at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes called a teaser rate.

A regularly scheduled periodic payment that a borrower agrees to make to a lender.

Borrowed money that is repaid in equal periodic payments. Cars and furniture are often paid for with installment loans.

A property title that a title insurance company agrees to insure against defects and claims.

A form of contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy. The periodic payments are known as insurance premiums.

A document stating that insurance is only temporarily in effect. Because the coverage will expire by a certain date, a permanent policy must be obtained prior to the expiration date.

A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (PMI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.

The cost of the use of money.

The rate at which interest accrues on a mortgage. Usually, it is also the rate used to calculate the monthly payments.

The cost of borrowing a lender's money. Interest takes into account the risk and cost to the lender for a loan. The interest rate on a fixed rate mortgage depends on the going market rate and how many discount points you pay up-front. An adjustable rate mortgage's interest is a variable rate made up of the index and the lender's margin.

An arrangement where the property seller, borrower or other party deposits money to an account so that it can be released each month to reduce the borrower's interest rate or monthly payments during a specified period of a loan.

The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage loan note.

The Interest Rate/APR shown can change at any time without notice. A final interest rate offer will be made after you complete our online application and the information you provided is reviewed by us. The interest rate charged will vary with the Prime Rate as quoted by the Wall Street Journal, and is subject to increase.

A property that is not occupied by the owner.