Key Concepts in Mortgages and Budgeting

Adjustable rate mortgage

A type of mortgage where the interest rate can change over time, typically based on market conditions.

Budget

A plan for managing income and expenses over a specific period, often used to ensure financial stability.

Budget worksheet

A tool or document used to track income, expenses, and savings to help create and manage a budget.

Earnest money

A deposit made by a buyer to show their serious intent to purchase a property, often applied to the down payment.

Fixed expenses

Regular, predictable expenses that do not change from month to month, such as rent or loan payments.

Fixed rate mortgage

A mortgage with an interest rate that remains constant throughout the life of the loan.

Graduate-payment mortgage

A type of mortgage where payments start lower and gradually increase over time, often used by borrowers expecting rising income.

Home equity loan

A loan that allows homeowners to borrow against the equity in their home, typically at a fixed interest rate.

Landlord

A person or entity that owns a property and rents it out to tenants.

Lease

A legal agreement outlining the terms under which a tenant rents a property from a landlord.

Long-term goals

Financial or personal objectives that are planned to be achieved over an extended period, often years or decades.

Mortgage

A loan used to purchase real estate, where the property serves as collateral for the loan.

Offer

A formal proposal made by a buyer to purchase a property, often including price and terms.

Principal

The original amount of money borrowed in a loan, excluding interest or additional fees.

Security deposit

A refundable payment made by a tenant to a landlord to cover potential damages or unpaid rent.

Short-term goals

Financial or personal objectives that are planned to be achieved in the near future, often within a year.