Adjustable Rate
An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

Amortization
A repayment method in which the amount you borrow is repaid gradually through regular monthly payments of principal and interest. During the first few years, 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 Membership
An amount that may be charged annually for having a line of credit available. Often charged regardless of whether you use the line. Also referred to as a "participation fee."

Annual Percentage Rate (APR)
The cost of credit on a yearly basis, expressed as a percentage. Required to be disclosed by the lender under the federal Truth in Lending Act, Regulation Z. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Does not include title insurance, appraisal and credit report.

Application
An initial statement of personal and financial information which is required to approve your loan.

Application Fee
Fees that are paid upon application. An application fee frequently includes charges for property appraisal ($200-$400) and a credit report ($30-$50).

Appraisal
A fee charged by an appraiser to render an opinion of market value as of a specific date. Required by most lenders to obtain a loan.

Assumption of Mortgage
The agreement of a purchaser to become primarily liable for the payments on a mortgage loan. Unless otherwise specified by the lender, the seller may remain secondarily liable for payments.