APR (Annual Percentage Rate): A term used in the Truth-in-Lending Act to represent the percentage relationship of the total finance charge to the amount of the loan. The APR reflects the cost of your mortgage loan as a yearly rate. It will be higher than the interest rate stated on the Promissory Note because it includes, in addition to the interest rate, loan fees.
LTV (Loan to Value Ratio): A term used to define the amount of a mortgage loan compared to the real estate's appraised value, expressed as a percentage. The conventional, non-insured lending standard is an 80% LTV, which reflects a 20% down payment. Any loan amount in excess of an 80% LTV is subject to private mortgage insurance.
Caps: A term used when defining adjustable rate mortgage (ARM) loan interest rate changes, often expressed as "X/Y." In this example, "X" would represent the maximum amount an ARM could change per adjustment period (i.e. annually for a One-Year ARM), while "Y" would represent the maximum amount an ARM could change for the life of the mortgage loan. Changes in the interest rates could represent increases or decreases.