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  1. Mortgage: A mortgage is a loan used to purchase a property. The property serves as collateral for the loan, and the lender has the right to take possession of the property if the borrower fails to repay the loan.

  2. Principal: The principal is the amount of money borrowed for the mortgage. It is the total amount that the borrower needs to repay over the life of the loan.

  3. Interest: Interest is the cost of borrowing money. It is the amount that the lender charges the borrower for the use of the principal.

  4. Amortization: Amortization is the process of paying off the mortgage over time. It involves making regular payments that include both principal and interest, with the goal of fully repaying the loan by the end of the mortgage term.

  5. Term: The term of a mortgage is the length of time over which the borrower will make payments on the loan. It is typically 15, 20, or 30 years.

  6. Down Payment: A down payment is the amount of money the borrower pays upfront when purchasing a property. The down payment is typically a percentage of the purchase price, and the larger the down payment, the lower the loan amount and monthly payments.

  7. Private Mortgage Insurance (PMI): PMI is insurance that lenders require borrowers to purchase if their down payment is less than 20% of the purchase price. PMI protects the lender in case the borrower defaults on the loan.

  8. Closing Costs: Closing costs are fees paid by the borrower at the time of closing to complete the mortgage transaction. They can include fees for appraisal, title search, loan origination, and other costs associated with the mortgage process.

  9. Fixed-rate Mortgage: A fixed-rate mortgage is a type of mortgage in which the interest rate remains the same throughout the life of the loan. This provides the borrower with predictable monthly payments.

  10. Adjustable-rate Mortgage (ARM): An adjustable-rate mortgage is a type of mortgage in which the interest rate can change over time based on market conditions. This can result in lower initial payments, but also carries the risk of higher payments in the future.

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