The process of purchasing a home or property is often confusing enough without the industry jargon. In an effort to alleviate that confusion that comes from some of the jargon, below is a short list of terms and the meanings. In order to help further the understanding of terms associated with the real estate purchase process here are some mortgage specific definitions and explanations. Two step Mortgage – this is a hybrid home loan that starts as a fixed rate for an agreed upon number of years. When those years have passed the interest rate will become adjustable. Some examples of this kind of mortgage are the 5 and 7 One ARM (adjustable rate mortgage) Balloon Mortgage – this is a steady monthly mortgage that will amortize over time and will provide a lump sum payment due at the end of the term. This price will cover interest, principle, and in rare cases taxes. Amortization can and does occur over a long period of time, even beyond the loan term. Budget Loan – the loan payments for this are designed to cover taxes, insurance, interest and principle on the home mortgage loan. This is a convenient method of assuring your homes needs are covered. It is also possible to do the same with an escrow account. Your Austin real estate agent will be well versed in the industry terms. With that in mind they will be able to help you to understand what applies directly to your situation and what should. Ask questions or refer back to this site for more informative data.