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Common Mortgage Terminology
Common Mortgage Terminology
Mortgage language can feel complicated. Here are common terms to help you move through the process with more confidence.
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A mortgage with an interest rate that may change over time.
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The process of gradually paying off a loan through scheduled monthly payments.
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A professional estimate of a property’s market value.
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The total yearly cost of the loan, including interest and certain fees.
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Fees and expenses paid at closing related to the mortgage and home purchase.
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A final document outlining your loan terms, monthly payments, and closing costs.
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A short-term loan used to finance the building of a new home or major renovation.
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A comparison of your monthly debt payments to your monthly income.
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The upfront portion of the home purchase price paid by the buyer.
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A deposit made with an offer to show the seller you are serious about purchasing the home.
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An account used to collect and pay property taxes and insurance as part of your monthly mortgage payment.
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A mortgage with an interest rate that stays the same for the life of the loan.
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Insurance required for some homes located in designated flood zones.
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A flexible line of credit secured by your home equity that you can borrow from as needed.
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The portion of your home’s value that you own outright.
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A loan that allows you to borrow against the equity in your home, usually with fixed payments.
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The percentage charged by the lender for borrowing money.
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The length of time you have to repay the loan (such as 15 or 30 years).
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The percentage of the home’s value being financed through the loan.
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A loan used to purchase or refinance a home or property.
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A more detailed review of your finances that provides a stronger indication of loan approval.
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An estimate of how much you may be able to borrow based on basic financial information.
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The amount of money borrowed for your loan.
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Insurance that may be required when a borrower makes a smaller down payment.
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Replacing your current mortgage with a new loan, often to lower payments or change terms.
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A review of public records to confirm property ownership and identify any liens or claims.
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The process lenders use to review and verify your financial information before approving a loan.