ARM
Adjustable Rate Mortgage. A loan where the interest rate can change according to the index, caps, and margin.

Amortization
The gradual reduction of debt by means of periodic payments sufficient to pay principal and interest and thereby liquidate the debt.

Appraisal
An unbiased, professional estimate of a property's value based on style, appearance, quality of construction, improvements, usefulness, and the comparable value of nearby properties.

Balloon Mortgage
A short term loan, usually 5 to 7 years, that features a fixed interest rate, and a final large balloon payment for balance of the mortgage.

Borrower
A person who receives funds in the form of a loan with the obligation of repaying the loan in full with interest, if applicable.