Effective Interest Rate - The cost of a mortgage expressed as a yearly rate, usually higher than the interest rate on the mortgage since this figure factors into the up-front costs of acquiring the loan.

Cash Out - A refinance for more than the balance of the current mortgage. The excess money taken out reduces the borrower’s equity.

Refinancing - The process of paying off one loan with the proceeds from a new loan secured by the same property.

Mortgage Loan - A loan for which real estate serves as collateral to provide for repayment in case of default.

Jumbo Loan - A mortgage with a principal balance that exceeds $417,000 the amount eligible for purchase by Fannie Mae and Freddie Mac. Jumbo loans generally carry a higher interest rate.

Home Equity Loan - An additional mortgage secured by the equity in the home. All funds for this loan are disbursed at closing. (In contrast, see Home Equity Line Of Credit).

Home Equity Line Of Credit - A revolving line of credit secured by the equity in the home. Unlike a Home Equity Loan, these funds may be drawn and repaid like a credit card.