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  • Adjustable Rate Mortgage (ARM):

    A mortgage having an interest rate which is usually initially lower than that of a mortgage with a fixed rate but is adjusted periodically according to the cost of funds to the lender.

  • Amortize:

    To liquidate (a debt, such as a mortgage) by installment payments or payment into a sinking fund. Part of your payment is applied to principal and some to interest until your debt is paid in full.

  • Appraisal:

    A valuation of property by the estimate of an licensed appraiser.

  • APR (Annual Percentage Rate):

    Describes the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a mortgage. It is a finance charge expressed as an annual rate.

  • Bi-Weekly Payments:

    Thirteen payments per year made every two weeks. The net result is that your mortgage will be paid before the end of the term.

  • Clear To Close:

    The step in the mortgage process when the borrowers can schedule their closing and all commitment conditions have been reviewed and accepted by the lender.

  • Closing:

    Or settlement, is the final step in executing a real estate transaction. Transfer of title occurs at this time.

  • Commitment Letter:

    A Loan Commitment Letter is the document an underwriter sends to the borrower once a loan is approved.

  • Conventional Mortgage:

    A type of mortgage in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac.

  • Debt Ratio:

    Calculated by dividing the total monthly debt payments by the total gross monthly income.

  • Deed:

    A formal legal document signed, witnessed, and delivered to effect a conveyance or transfer of property or to create a legal obligation or contract.

  • Fixed Rate:

    An interest rate that does not change over the life of a loan.

  • FHA (Federal Housing Administration) Mortgage:

    loan which is provided by an FHA approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford.

  • Loan To Value (LTV):

    Ratio expresses the amount of a first mortgage lien as a percentage of the total appraised value of real property. For instance, if a borrower borrows $130,000 to purchase a house worth $150,000, the LTV ratio is $130,000/$150,000 or 87%.

  • Mortgage:

    A loan secured by real property. Note- A written promise to pay a specific sum of money on a certain date. Also called promissory note.

  • Pre-qualification:

    The act or process of determining the approximate amount a borrower will be able to borrow before he/she actually applies for a loan. Prequalification looks at the borrower's current income and debt to make this determination.

  • Pre-Approval:

    A commitment by a mortgage lender to provide a loan with a certain monthly payment to a borrower. A lender offers pre-approvals in hopes that the borrower to whom it is offered will use that lender in securing a mortgage.

  • PMI (mortgage insurance):

    An insurance policy that a mortgage holder buys on behalf of a lender, protecting the lender in the event of default on the mortgage. Most lenders require their mortgage borrowers to purchase PMIs if the mortgage's loan-to-value ratio is more than 80%.


    The State of New York Mortgage Agency (SONYMA) is a public authority created in 1970 by the state government of New York to provide affordable homeownership to low- and moderate-income New Yorkers. It offers affordably priced fixed-rate mortgages through several mortgage programs for eligible homebuyers. Each program offers competitive interest rates, low down payments, down payment assistance and no prepayment penalties. SONYMA offers its programs through a network of participating lenders throughout New York state who contract with the agency to offer SONYMA's programs to their customers.

  • USDA:

    USDA stands for United States Department of Agriculture. USDA mortgages provide low-cost insured home mortgage loans. Income and property price limits apply as well as geographical restrictions.

  • VA:

    Department of Veteran Affairs provides mortgages for qualified veterans and spouses.