Glossary of Mortgage Terms

Home appreciation is the rise in a home's market value over time. This can happen because of things like supply and demand, location, the economy, and improvements made to the home.

Home equity is the part of your house that you really own. To figure it out, you take the current market value of your home and subtract what you owe on your mortgage and any other liens on the property.

A home equity line of credit (HELOC) is a type of credit line that is backed by the value of your home. It lets you borrow, pay back, and borrow money again up to a certain amount during a set draw period, usually at a variable interest rate.

A home equity loan is a second mortgage with a fixed interest rate that lets homeowners borrow a lump sum of money based on the difference between the current market value of their home and the amount they still owe on their mortgage.

Homeowners can get a home improvement loan to pay for repairs, renovations, or upgrades to their property. These loans can be secured or unsecured, depending on the type of loan.

Home Possible® is a Freddie Mac mortgage program that allows low- to moderate-income borrowers buy a home with as little as 3% down and flexible credit requirements.

Home title theft is a type of fraud where someone uses forged documents or stolen personal information to transfer ownership of your property without your knowledge or permission.

A home warranty is a service contract that pays for the repair or replacement of major home systems and appliances when they break down due to normal use.

A homeowners insurance binder is a temporary document from your insurance company that proves you have coverage on a property while the full policy is still being processed.

A homeowners insurance deductible is the amount of money you pay out of pocket on a covered claim before your insurance company pays the rest, and it directly affects how much you spend on premiums each year.