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Point -- One percent of the loan principal which is charged in addition to interest and fees.

Prepayment Penalty -- A fee paid by a borrower who pays off the loan before it is due.

Prequalification -- Informal estimate of how much financing a potential borrower might expect to obtain. Done before paying substantial loan application fees.

Principal -- The amount of money borrowed, for which interest is charged; or, one of the parties to a contract.

Prorate -- Divide or assess proportionately, as in the case of daily interest accrued prior to closing.

Qualifying Income Ratio -- Used by lenders to decide whether to offer an individual a loan. One kind compares only the amount of the proposed monthly mortgage payment to the monthly income. Another compares the amount of all monthly obligations to the monthly income.

RESPA Statement -- (Real Estate Settlement Procedures Act) -- A precise breakdown of closing costs for both sellers and buyers.

Revolving Debt -- An arrangement for credit in which the customer receives purchases or services on an ongoing basis prior to payment. Repayment is usually at regular intervals but not for a specified amount or term, i.e. charge cards.

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Table Fund -- The use of money on deposit to fund a loan at closing.

VA Mortgage -- A mortgage that is guaranteed by the Department of Veterans Affairs. Veterans Administration is an independent agency of the federal government created to administer a variety of benefit programs designed to facilitate the adjustment of returning veterans to civilian life. The VA home loan guaranty program is designed to encourage lenders to offer long term, low down payment mortgages to eligible veterans by guaranteeing the lender against loss.

Variable Rate Mortgage -- A mortgage agreement that allows for adjustment of the interest rate in keeping with the fluctuating market and terms agreed on in the note.

Yield -- Ratio of income from an investment to total cost of the investment over a given period of time. Return on investment.