Adjustable Rate Mortgage – A mortgage with an interest rate that may change, ARMs usually start with better rates than fixed rate mortgages, in order to compensate the borrower for the additional risk that future interest rate fluctuations will create.

Annual Percentage Rate – The yearly cost of a loan, including interest, insurance, and the origination fee (points), expressed as a percentage. Often applied to mortgages, credit cards, and automobile financing.

Collateral – Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default. also called security.

Cosigner – An individual other than the borrower who signs a promissory note and thereby assumes equal liability for it.

Federal Perkins Loan – A need-based, low-interest loan available to students rather than their parents. Repayment doesn't begin until after a student graduates, falls below half-time student status, or leaves college. After graduating, a student typically has a nine-month grace period during which interest doesn't accrue. Perkins loans offer low interest rates to students and can be repaid within ten years.

Federal Stafford Loan—A need-based government loan made to students rather than their parents. The size of the Stafford loan is determined from the expected family contribution. Repayment is not required until after graduation. Unsubsidized Stafford loans accrue interest before graduation, but subsidized Stafford loans do not.

Home Equity Loan – A loan secured by a primary residence or second home to the extent of the excess of fair market value over the debt incurred in the purchase. 
Lease –A written agreement under which a property owner allows a tenant to use the property for a specified period of time and rent.

Mortgage –A loan to finance the purchase of real estate, usually with specified payment periods and interest rates. The borrower (mortgagor) gives the lender (mortgagee) a lien on the property as collateral for the loan.

Line of Credit – An arrangement in which a bank or vendor extends a specified amount of unsecured credit to a specified borrower for a specified time period.

Subprime Mortgage –A class of mortgage used by borrowers with low credit ratings. Borrowers who use subprime loans generally do not qualify for loans with lower rates because they have damaged credit or no credit history, and are thus considered risky by lending agencies. Because the default risk for poor credit borrowers is greater than of other borrowers, lenders charge a higher interest rate on subprime loans.