HUD1 Statement
Also known as the ""settlement sheet"" it itemizes all closing costs must be given to the borrower at or before closing.

Discount point
Normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount discount points are paid to reduce the interest rate on a loan.

RESPA Real Estate Settlement Procedures Act
A law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs practices and relationships

Closing
Also known as settlement this is the time at which the property is formally sold and transferred from the seller to the buyer it is at this time that the borrower takes on the loan obligation pays all closing costs and receives title from the seller.

FHA Federal Housing Administration
Established in 1934 to advance homeownership opportunities for all Americans assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.

Pre-approve
Lender commits to lend to a potential borrower commitment remains as long as the borrower still meets the qualification requirements at the time of purchase.

Appraiser
A qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate.

Loan-to-value LTV ratio
A percentage calculated by dividing the amount borrowed by the price or appraised value of the home to be purchased the higher the LTV the less cash a borrower is required to pay as down payment.

Fannie Mae Federal National Mortgage Association
A federally-chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors by purchasing mortgages Fannie Mae supplies funds that lenders may loan to potential homebuyers.

Equity
An owners financial interest in a property calculated by subtracting the amount still owed on the mortgage loonsfrom the fair market value of the property.