Mortgages come with a lot of new terms, and we’re here to make them simple. Browse this glossary to find clear, easy-to-understand explanations of the words and phrases you’ll encounter throughout your home financing journey.
The process of paying off a loan over time through regular scheduled payments.
A professional assessment that determines a property’s current market value.
The total annual cost of a loan, including interest and certain fees.
Financial resources used to evaluate a borrower’s ability to repay a loan.
A mortgage with an interest rate that may change periodically.
The individual or entity that receives and agrees to repay a loan.
A financing option that reduces the interest rate temporarily or permanently.
Short-term financing used while transitioning between properties.
A professional who connects borrowers with lenders.
A mortgage that uses bank deposits instead of tax returns for income verification.
A mortgage not insured or guaranteed by the government.
Fees and expenses paid when finalizing a mortgage transaction.
A refinance that allows the borrower to withdraw home equity as cash.
An additional applicant who shares responsibility for the loan.
A lender’s written promise to provide a mortgage under specific terms.
The upfront amount paid toward the purchase of a property.
A comparison of monthly debt obligations to gross income.
Fees paid to reduce a mortgage’s interest rate.
A clause requiring full loan repayment when the property is sold.
A charge for creating loan paperwork.
An account that holds funds for property taxes and insurance.
A deposit showing serious intent to purchase a home.
A law preventing discrimination in lending.
The true cost of borrowing after fees are considered.
Paying off a loan before the scheduled end date.
A loan with an interest rate that remains constant.
A government-backed mortgage with more flexible qualification guidelines.
A fee charged on VA loans to support the program.
The primary loan secured against a property.
Savings a borrower must have after closing.
A short time after the due date before late fees apply.
A mortgage insured or guaranteed by a federal agency.
A loan where payments increase over time.
A promise to repay a loan if the borrower defaults.
An early breakdown of expected loan costs.
A professional review of a property’s condition.
A revolving line of credit based on home equity .
The percentage of income spent on housing expenses.
Coverage protecting against property damage.
Funds withheld until certain conditions are met.
The cost charged for borrowing money.
Proof of earnings used during loan approval.
A loan repaid through fixed monthly payments.
Another term for an escrow account.
The cost paid for insurance coverage.
Real estate purchased to generate income.
A mortgage application submitted by multiple borrowers .
A court ruling that may affect credit eligibility.
A mortgage exceeding standard conforming loan limits.
Shared ownership with automatic survivorship rights .
Shared legal responsibility for repaying a loan .
A court ruling that may affect credit eligibility.
The length of time to repay a mortgage.
The loan amount compared to the property value.
A document outlining loan terms and costs.
How easily assets can be converted to cash.
The time an interest rate is guaranteed.
The stated interest rate before fees.
A mortgage that does not meet standard lending guidelines.
A loan where closing costs are rolled into the rate or balance.
Income remaining after taxes and deductions .
A legal promise to repay a mortgage loan.
A property with multiple residential units.
The percentage added to an ARM’s index rate.
A professional arranging loans between borrowers and lenders.
The regular amount paid toward the mortgage.
Insurance protecting the lender if the borrower defaults .
A charge for processing a mortgage loan.
A property lived in by the owner.
A loan allowing additional borrowing.
A buyer’s written proposal to purchase a property.
How a property is used by the borrower.
Conditional loan approval based on financial review.
Insurance required for low down payments.
A contract outlining property sale terms.
Legal authority to act on someone’s behalf.
A sudden increase in monthly payments.
A loan meeting federal consumer protection standards.
Income and debt benchmarks used for approval.
Interest rate changes every three months.
Review procedures ensuring loan accuracy.
Determining a borrower’s loan eligibility.
A loan allowing seniors to access home equity.
A period allowing borrowers to cancel certain loans.
The final transfer of property ownership.
Replacing an existing mortgage with a new one.
Bringing a loan current after default.
Where mortgages are bought and sold by investors.
Costs paid by the seller on behalf of the buyer.
A measurement of property boundaries.
A loan designed for borrowers with lower credit scores.
The company managing loan payments.
A final summary of closing costs.
Protection against ownership disputes.
A tax imposed when property ownership changes.
A short-term interest rate reduction.
A law requiring clear loan disclosures.
Shared ownership without survivorship rights.
The full cost paid over the life of the loan.
The lender’s evaluation of loan risk.
Uniform Residential Loan Application (URLA)
A government-backed mortgage for rural properties.
Proof of recurring utility payments.
The remaining loan amount owed.
How the property is intended to be used.
A mortgage guaranteed by the Department of Veterans Affairs.
Confirmation of borrower employment.
The percentage of unoccupied rental units.
Confirmation of borrower savings.
An interest rate that can fluctuate.
Funds available for operations.
A closing where funds are disbursed immediately.
A loan that includes an existing mortgage balance.
A deed guaranteeing clear ownership.
Taxes deducted from income.
A measure of credit risk.
Meeting local land-use requirements.
Area-based lending consideration.
A loan without discount points.
A loan requiring no down payment.
