Mortgage Glossary
A comprehensive dictionary of mortgage terms and definitions to help you understand the language of home financing.
A mortgage loan where the interest rate can change periodically based on changes in a corresponding financial index.
The process of paying off a loan through regular payments over time. Each payment includes both principal and interest.
The total cost of borrowing expressed as a yearly rate, including interest and fees.
A professional assessment of a property's market value conducted by a licensed appraiser.
Fees and expenses paid when finalizing a mortgage, typically 2-5% of the loan amount.
A mortgage loan that is not insured or guaranteed by the government.
A numerical representation of creditworthiness based on credit history, typically ranging from 300 to 850.
The percentage of gross monthly income that goes toward paying debts.
The upfront cash payment made when purchasing a home, expressed as a percentage of the purchase price.
An account held by the lender to pay property taxes and homeowners insurance on your behalf.
A mortgage insured by the Federal Housing Administration, designed for borrowers who may not qualify for conventional loans.
A mortgage where the interest rate remains constant throughout the entire loan term.
The portion of your home that you own outright, calculated as current market value minus outstanding mortgage balance.
The percentage charged by the lender for borrowing money, expressed as an annual rate.
The ratio of your loan amount to the appraised value of the property, expressed as a percentage.
Insurance that protects the lender if you default on your loan, required when down payment is less than 20%.
Fees paid to the lender at closing to reduce your interest rate. One point equals 1% of the loan amount.
A lender's conditional commitment to lend you a specific amount based on a thorough review of your financial information.
The original amount of money borrowed from the lender, excluding interest.
Insurance required on conventional loans when the down payment is less than 20%.
Replacing your existing mortgage with a new loan, typically to get a lower interest rate or change the loan term.
Insurance that protects against financial loss from defects in the title to your property.
The process by which a lender evaluates your loan application to determine the risk of lending to you.
A mortgage guaranteed by the Department of Veterans Affairs for eligible military members, veterans, and surviving spouses.