Some lenders may offer you a choice of indices. Annual Cap is the limit on how high the interest rate of an ARM can rise duing the single year. Annual caps are specified in all of the better ARM mortgage programs. Don't sign without one. The APR is expressed as an annual percentage rate, as required by the Truth In Lending Act.
Amortization is the act of reducing the amount owed on a loan.
Amortization can be made either in one or more lump sums, as well as in periodic installments. Appraisal Value is an estimate of a property's worth, usually based on recent sales of comparable properties nearby. Appraisals, done by certified professionals, are used by lenders to verify a home's value and to justify a lender's mortgage commitment for that home. Balloon Mortgages look and act like fixed-rate mortgages, except that the loan is usually due in three, five or ten years. Then, you must either refinance, or repay the entire outstanding balance in one lump sum.