Adjustable-Rate Mortgage (ARM): A mortgage tied to an index that adjusts based on changes in the economy. The ARM typically adjusts annually.

Appraised Value: A property's value as determined by a licensed real estate appraiser.

Appreciation: An increase in a property's value.

ARM: Adjustable Rate Mortgage.

Assessed Value: A property's value as determined by a government tax assessor.

AVM: Automated Valuation Model. An automated method to determine the current value of a property.

Closing: A meeting at which a loan is finalized or settled.

Closing Costs: The costs of a mortgage loan including, but not limited to an origination fee, buy downs, title costs, underwriting fees, document preparation fees and appraisal.

Conforming Mortgage: A loan that conforms to the guidelines established by Fannie Mae or Freddie Mac.

Conventional Mortgage: A mortgage not affiliated with a government program.

Credit Bureau: An organization that collects credit information and organizes it into a credit report.

Credit Report: A report reflecting a person's payment history on credit accounts. A credit report lists a borrower's employment information, creditors, balances owed, monthly payments, payment history and public records such as bankruptcies, foreclosures and judgments. There are three primary credit repositories: Experian, TransUnion and Equifax.

Debt-to-Income Ratio: The percentage of a person's monthly income used to pay for debt.

Deed: A legal instrument used to convey interest in a property.

Depreciation: A decrease in a property's value.

Down Payment: An amount paid directly by a buyer toward the purchase price of a property.

Equity: The difference between what is owed on the property and what it could sell for (less any costs of sale).

Equity Loans: Tapping into an owner's equity, with the property used as the collateral.

Fair Credit Reporting Act: A law regulating how information is reported on a credit report and that establishes procedures to correct any errors therein.

Fair Market Value: The value of a home as determined by how much it would sell for in the applicable market.

Fannie Mae: The Federal National Mortgage Association, the nation's largest investment source for home mortgages.

FHA (Federal Housing Administration): One of several government agencies that guarantees or insures mortgage loans made by private lenders, if the loan, customer and property meet the set standards.

FICO: The Fair, Isaac and Company credit scoring system used by many lenders to determine a borrower's ability to repay a mortgage; uses a scoring range of 450 to 850 - the lower the score, the higher the risk.

Fixed-Rate Mortgage: A mortgage that maintains the same interest rate for the entire term of a loan.

Foreclosure: The process of seizing real estate when a borrower fails to repay the loan as agreed (defaults).

Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporation chartered by the federal government to buy mortgages from lenders and sell securities backed by them.