arm

Definition

Adjustable-Rate Mortgage—a loan where the interest rate can fluctuate based on market conditions after an initial fixed period. It's the financial equivalent of a mystery box: exciting at first, potentially terrifying later.

Example Usage

She chose a 5/1 ARM because the initial rate was fantastic, but now she's nervously watching the market as year five approaches.

Origin

Emerged in the 1980s as lenders sought to shift interest rate risk to borrowers during volatile economic periods

Fun Fact

ARMs became infamous during the 2008 housing crisis when millions of homeowners faced dramatically increased payments they couldn't afford.

Source: Consumer Financial Protection Bureau mortgage terminology

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A three-party alternative to a mortgage where a trustee holds the property title until the loan is paid. Like a mortgage, but with an extra person who can foreclose faster.

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restriction

The legal fine print that tells you what you can't do with your property, crushing dreams of backyard chicken coops and neon pink houses since time immemorial. These are the rules embedded in deeds, HOA bylaws, or zoning laws that limit how you can use or modify property. They're the reason you need to ask permission to build that treehouse in your own yard.

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sub2

Short for 'subject to'—acquiring a property while leaving the existing mortgage in place and making payments on behalf of the seller. It's a creative financing technique that makes attorneys nervous and investors wealthy.

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subject to

Buying property while leaving the existing mortgage in place under the original borrower's name. It's legally questionable, financially risky, and somehow still happens regularly.

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seller carry

When a property seller provides financing to the buyer, essentially acting as the bank and holding a note secured by the property. It's the real estate version of 'I'll spot you until payday'—except with six-figure stakes and actual paperwork.

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