Mortgage
A loan used to buy real estate, with the property pledged as security. If the borrower stops paying, the lender can foreclose. Some states use a deed of trust instead of a mortgage document, but people call both a mortgage.
Also called: home loan, mortgage loan
Related terms
The yearly cost of a loan including the interest rate plus certain fees, such as points and origination charges. It is usually higher than the interest rate and makes it easier to compare offers from different lenders.
The percentage a lender charges to borrow money, used to figure the interest part of each payment. It does not include fees, which is why the APR is often higher.
The amount you borrowed, or the part of it you still owe. Each payment covers interest first, and the rest pays down principal, which builds equity.
The part of the purchase price you pay in cash rather than borrow. A larger down payment lowers the loan amount and can remove the need for mortgage insurance on a conventional loan.
A document used in many states instead of a mortgage, where a neutral trustee holds title as security for the loan until it is paid. It usually allows non-judicial foreclosure, which is faster than going to court.
The legal process a lender uses to take and sell a property after the borrower defaults. Some states require a court case (judicial foreclosure), while others allow a faster non-judicial sale under a deed of trust.