Mortgage Vocabulary Flashcards

Comprehensive vocabulary flashcards covering key mortgage, real-estate, and financing terms drawn from the lecture’s English-Spanish Mortgage Glossary. Each card provides a concise English definition to aid understanding and exam preparation.

Acceleration clause

Loan provision that allows the lender to demand immediate repayment of the entire balance if the borrower defaults or otherwise violates the agreement.

Clausula de apresuramiento

Adjustable-rate mortgage (ARM)

A loan whose interest rate can change periodically based on a specified index.

Prestamo hipotecario con tasa de interes variable

Adjustment date

The day on which the interest rate on an ARM is changed

Fecha del ajuste

Amortization

The gradual repayment of a loan through scheduled installments of principal and interest.

Amortización

Amortization schedule

Table showing each payment, how much goes to interest and principal, and the remaining balance over time.

Tabla de amortización

Annual percentage rate (APR)

A standardized measure of the cost of credit, expressed as a yearly rate that includes fees and interest.

Tasa de interés anual

Application

Formal request submitted to a lender for a mortgage or other loan.

Solicitud

Appraisal

An independent estimate of a property’s market value.

Tasación, valoración

Appraised / assessed value

Value placed on real estate by a professional appraiser (appraised) or by a tax authority (assessed).

Valor de tasación

Appraiser

Licensed professional who estimates the value of real property.

Evaluador, Tasador

Appreciation

Increase in a property’s value over time.

Apreciación (en valor)

Assessment

Valuation of property for tax purposes or for allocating shared expenses.

Evaluación Fiscal / Tasación Fiscal

Asset

Any item of financial value owned by an individual or business.

Activo, bienes

Assignment

Transfer of rights or interests in property or a contract to another party.

Asignación

Assumable mortgage

Existing loan that can be taken over by a new buyer, usually with lender approval.

Hipoteca Asumible

Assumption

Act of a buyer accepting liability for an existing mortgage.

Tomar posesión (de la hipoteca de un tercero)

Balloon mortgage

Loan with small regular payments and one large lump-sum payment due at the end of the term.

Hipoteca de pago global

Balloon payment

The final large payment that pays off a balloon loan’s remaining principal.

Pago global

Bankruptcy

Legal proceeding in which a debtor seeks relief from debts under court supervision.

Bancarota

Bill of sale

Document that transfers ownership of personal property from seller to buyer.

Contrato de venta

Biweekly mortgage

Loan requiring payments every two weeks, resulting in 26 payments per year and faster amortization.

Préstamo hipotecario de pago quincenal

Bond market

Marketplace where debt securities such as Treasury or corporate bonds are bought and sold; influences mortgage rates.

Mercado de bonos

Bridge loan

Short-term financing used until permanent financing is obtained or an existing obligation is removed.

Préstamo temporal

Broker

Intermediary who brings borrowers and lenders (or buyers and sellers) together for a fee.

Agente

Buydown

Arrangement in which upfront funds are paid to reduce the interest rate on a mortgage for some period.

Hipoteca con intereses iniciales rebajados

Call option

Opción de Compra con revisiones por intervalos

Cap (payments)

Limit on how much the payment on an ARM can increase at one adjustment or over the life of the loan

Limite/Tope (de los pagos)

Cash-out refinance

Refinancing that replaces an existing mortgage with a larger one, allowing the borrower to take cash from equity.

Refinanciamiento con desenbolso de efectivo

Certificate of deposit (CD)

Time deposit with a bank that pays fixed interest for a specified term.

Certificado de Deposito

Certificate of deposit index

Common index for ARMs based on the average yields of certain CDs.

Índice del Certificado de Depósito

Certificate of Eligibility

VA document verifying a veteran’s entitlement to home-loan benefits.

Certificate of Reasonable Value (CRV)

VA appraisal that sets the maximum loan amount for a VA mortgage.

Certificado de Valor Razonable

Chain of title

Chronological record of ownership transfers for a property.

Clear title

Ownership free of liens or legal questions about rightful possession.

Closing

Meeting at which property ownership is transferred and final documents are signed.

Closing costs

Fees and expenses (beyond the purchase price) paid at settlement, such as origination, title, and recording charges.

Co-borrower

Individual who signs the promissory note along with another borrower and is equally responsible for repayment.

Collateral

Property or assets pledged to secure a loan.

Collection

Process lenders use to obtain payment on delinquent accounts.

Commission

Fee paid to a real estate agent or broker for services, usually a percentage of the sale price.

Common area assessments

Charges levied on property owners to cover maintenance of shared areas in condos or HOAs.

Common areas

Portions of property shared by all owners or tenants, such as hallways and recreational facilities.

Common law

Body of law based on judicial precedent rather than statutes.

Community property

System in some states where spouses equally own property acquired during the marriage.

Comparable sales (comps)

Recently sold properties similar to the subject property, used to estimate value.

Condominium

Individual ownership of a unit plus shared ownership of common elements in a multifamily building.

Condominium conversion

Change of a building’s legal status from rental to condo ownership.

Condominium hotel

Hotel operated building where individual units are sold to owners who may rent them out when not in use.

Construction loan

Short-term financing used to fund building or major renovation; replaced by permanent loan after completion.

Contingency

Condition in a purchase contract that must be met for the agreement to be binding.

Contract

Legally enforceable agreement between two or more parties.

Conventional mortgage

Loan not insured or guaranteed by a government agency such as FHA or VA.

Convertible ARM

Adjustable loan that allows the borrower to switch to a fixed rate under specified conditions.

Cooperative (co-op)

Residential building owned by a corporation; occupants buy shares and receive proprietary leases rather than deeds.

Cost of funds index (COFI)

ARM index based on weighted average of interest paid by savings institutions on deposits.

Credit

Ability of a person to borrow money or obtain goods with the promise to pay later.

Credit history

Record of a borrower’s repayment of debts.

Creditor

Person or institution to whom money is owed.

Credit report

Document detailing an individual’s credit history and current credit status.

Credit repository

Company that compiles and maintains credit information on consumers; a credit bureau.

Debt

Money owed to another person or institution.

Deed

Legal document that transfers ownership of real property.

Deed-in-lieu

Borrower conveys title to the lender to avoid foreclosure.

Default

Failure to meet the terms of a loan agreement, usually by missing payments.

Delinquency

Status of a loan when payments are past due but not yet in default.

Deposit

Money placed with a lender or agent to show good faith or to secure a purchase.

Depreciation

Decrease in property value due to wear, age, or market conditions.

Discount points

Prepaid interest paid to a lender at closing to reduce the loan’s interest rate.

Down payment

Portion of the purchase price paid in cash at closing, reducing the loan amount needed.

Due-on-sale provision

Clause allowing a lender to demand full repayment if the property is sold or transferred.

Earnest money deposit

Buyer’s good-faith money held in escrow to show serious intent to purchase.

Easement

Legal right to use another person’s land for a specific purpose, such as access.

Effective age

Appraiser’s estimate of a property’s age based on condition, not chronological age.

Eminent domain

Government’s right to take private property for public use with just compensation.

Encroachment

Unauthorized intrusion of a structure onto another’s property.

Encumbrance

Claim, lien, charge, or liability on property that may affect its value or transferability.

Equal Credit Opportunity Act (ECOA)

Federal law prohibiting discrimination in credit transactions.

Equity

Difference between a property’s market value and the outstanding mortgage balance.

Escrow

Neutral third-party arrangement holding funds or documents until specified conditions are met.

Escrow account

Account held by lender to collect and pay taxes and insurance on behalf of borrower.

Escrow analysis

Periodic review of escrow account to ensure correct monthly deposits.

Escrow disbursements

Payments made from an escrow account for taxes, insurance, or other items.

Estate

All property and assets owned by an individual at death or during life.

Eviction

Legal removal of a tenant for breach of lease or non-payment.

Examination of title

Review of public records to confirm seller’s ownership and identify liens.

Exclusive listing

Agreement giving one broker the right to sell a property for a specified time.

Executor

Person named in a will to carry out the decedent’s wishes and manage the estate.

Fair Credit Reporting Act (FCRA)

Federal law regulating the collection and disclosure of consumer credit information.

Fair market value

Price a willing buyer and seller would agree upon in an open, competitive market.

Fannie Mae (FNMA)

Government-sponsored enterprise that buys and securitizes mortgages to ensure liquidity.

Federal Housing Administration (FHA)

HUD agency that insures lenders against borrower default on certain mortgages.

Fee simple

Highest form of real property ownership, unlimited in duration and freely transferable.

Fee simple estate

Legal interest representing absolute ownership of real property.

FHA mortgage

Loan insured by the FHA, allowing lower down payments and flexible qualifications.

Firm commitment

Lender’s or insurer’s unconditional agreement to provide a loan under stated terms.

First mortgage

Primary lien on a property, having priority over all other liens.

Fixed-rate mortgage

Loan with an interest rate that remains the same for the entire term.

Fixture

Personal property permanently attached to real property, becoming part of it.

Flood insurance

Coverage protecting against property damage from flooding, typically required in high-risk areas.

Foreclosure

Legal process by which a lender takes ownership of a property due to borrower default.