Understanding common mortgage terms and definitions
Understanding mortgage terminology is essential when navigating the home financing process. This glossary provides definitions for common terms you'll encounter during your mortgage journey.
The process of paying off a loan over time through regular payments that include both principal and interest.
The total cost of credit expressed as a yearly rate, including interest and other loan costs.
A professional assessment of a property's market value conducted by a licensed appraiser.
Fees and expenses paid at the closing of a real estate transaction, including loan origination fees, title insurance, and other costs.
A mortgage loan that is not insured or guaranteed by the federal government.
The initial payment made when purchasing a home, typically expressed as a percentage of the purchase price.
A neutral third party that holds funds and documents during the real estate transaction process.
A mortgage loan insured by the Federal Housing Administration, often requiring lower down payments.
A mortgage with an interest rate that remains constant throughout the loan term.
A document that provides an estimate of settlement costs for a mortgage loan.
The percentage charged by a lender for the use of borrowed money, expressed as an annual rate.
A mortgage loan that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac.
The ratio of the loan amount to the appraised value of the property, expressed as a percentage.
Insurance that protects the lender in case the borrower defaults on the loan.
A fee charged by the lender for processing a mortgage loan application.
Fees paid directly to the lender at closing in exchange for a reduced interest rate.
A preliminary evaluation by a lender indicating how much money a borrower can qualify for.
The original amount of money borrowed, not including interest or other charges.
The process of replacing an existing mortgage with a new loan, often to obtain better terms.
Insurance that protects against losses resulting from defects in the title to a property.
The process of evaluating a loan application to determine if the borrower qualifies for the loan.
A mortgage loan guaranteed by the Department of Veterans Affairs for eligible veterans and service members.
This glossary covers the most common mortgage terms, but there may be additional terms specific to your loan. Our loan officers are here to explain any terms you encounter during your mortgage process.
Our experienced loan officers are here to help you understand any mortgage terminology and guide you through the home financing process.
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