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Real Estate Glossary

Real Estate Glossary
Use this real estate glossary to research terms you might run across in a real estate transaction.

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One-Year Adjustable-Rate Mortgage	This adjustable-rate mortgage (ARM) offers a low initial interest rate with an interest rate that adjusts annually after the first year. The rate cap per annual adjustment is usually 2 percent; the lifetime adjustment caps can be 5 percent or 6 percent. This type of mortgage may be right for you if you anticipate a rapid increase in income over the first few years of your mortgage. That's because it lets you maximize your purchasing power immediately. It may also be the right mortgage for you if you plan to live in your home for only a few years. Advantages: Maximizes your buying power immediately, especially if you expect your income to rise quickly in the next few years. A low first-year interest rate and a 2 percent annual rate cap. Some one-year ARMs let you convert to a fixed-rate loan at certain adjustment intervals.

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