Glossary

AMI – Area Median Income

ARM-Adjustable Rate Mortgage- a type of loan for which the interest rate can change

Annual Income-Total earned, pre-tax over a year

APR- Annual percentage rate, a broader measure of the cost of borrowing money than the interest rate

Condition inspection-a formal inspection of a rental property to establish any existing damages and note the state of each item in the property

Co-signer or co-borrower- someone who agrees to take full responsibility for paying back a mortgage loan with you

Credit History- a record of your credit accounts and your history of paying on time as shown in your credit report

Credit report statement that has information about your credit activity and current credit situation such as loan paying history and status of credit accounts

Credit score- numerical representation of how you have paid other loans and debts. Lenders often use this score to predict how you will pay back a loan and in determining if they will grant you a loan. Your credit score moves up and down depending on how you pay your bills. 

Debt ratio- Debt to income ratio is all your monthly debt payments divided by gross monthly income

Down payment-Amount you pay toward the home upfront

Equity- the amount your property is currently worth minus the amount of existing loans

Eviction-legal process a landlord or property owner uses to remove the tenant from the property, terminating the lease early

FHA-Federal Housing Administration

FHA loan- loans from private lenders that are regulated and insured by the Federal Housing Administration

Finance charge-total amount of interest and loan charges you would pay over the entire life of the loan

First-time homebuyer: someone who has not owned and occupied their own home in the last three years.

FICO Score is a proprietary model created by Fair Isaac Corporation (FICO). Credit Score is a proprietary model created by Equifax. Equifax Credit Score uses a numerical range of 280 to 850 whereas FICO Score uses a numerical range of 300 to 850.

FTHB- Programs that help first-time home buyers purchase their first home (FHA, VA, USDA, Fannie Mae, etc.

Fixed Rate Mortgage- type of home loan for which the interest rate is set when you take out the loan and it will not change during the term of the loan

Fixed term lease- specifies a set period of time (usually 12 months) that a tenant agrees to rent the apartment

Guarantor-a third party who “guarantees” you’ll pay your rent and fulfill your financial obligations as a renter

HOA -Homeowner’s Association -typically formed to manage shared expenses such as landscaping and other maintenance

Home Equity Loan- allows you to borrow money against your home’s existing equity

Home Equity Line of Credit (HELOC)- Leverages your home’s equity, allows homeowners to apply for an open line of credit to borrow up to a fixed amount on an as-needed basis

HUD- The Department of Housing and Urban Development is a government agency that helps people get and maintain quality affordable housing

Interest rate-the cost you will pay each year on a mortgage to borrow money, expressed by a percentage rate

Mortgage- an agreement between you and a lender that allows you to borrow money to purchase or refinance a home.

PMI- Private Mortgage Insurance is a type of mortgage insurance that benefits your lender

Principal-Amount of mortgage loan that you have to pay back

Lessee- the tenant

Lessor- the property owner or management company

Lease renewal- information regarding what needs to be done if you want to renew your agreement after the initial time period has passed

Renter’s Insurance-protection for you and your belongings

Security deposit- payment that is proof of your intent to move in and take care of the place

Sublease/Sublet-re-renting a property to another party for a portion of the existing list

USDA – United States Department of Agriculture

USDA Loan-Rural Housing Service, part of the US Department of Agriculture offers mortgage programs with no down payment and generally favorable interest rates to rural home buyers

VA – Veteran Affairs

VA Loan- A loan program offered by the Department of Veteran Affairs to help service members, veterans, and eligible surviving spouses buy homes