Mortgage
A loan used to purchase a home, where the property itself serves as collateral.
Credit Score
A numerical expression based on a level analysis of a person's credit files to represent the creditworthiness of an individual.
Appraisal
A professional assessment of a property's value conducted by a certified appraiser.
Offer
A formal proposal to buy a property at a specified price.
Down Payment
An initial payment made when something is bought on credit.
Homeowner's Insurance
A form of property insurance that covers losses and damages to an individual's house and assets in the home.
Private Mortgage Insurance (PMI)
Insurance that a borrower might be required to buy as a condition of a conventional mortgage loan if they have a down payment that is less than 20% of the home's purchase price.
Income Verification
The process by which a lender confirms a borrower's income to determine their ability to repay a loan.
Loan Program
Various loan options offered by lenders, each with different requirements and features, such as FHA loans, VA loans, etc.
Title
A legal document evidencing a person's right to or ownership of a property.
Bankrupcy
A legal proceeding involving a person or business that is unable to repay their outstanding debts.
Refinancing
The process of obtaining a new mortgage to replace the original one, usually to get a better interest rate or term.
Escrow
An account held by a third party on behalf of the two parties in a transaction.
Debt-to-Income Ratio (DTI)
A personal finance measure that compares an individual's monthly debt payment to their monthly gross income.
Fixed-Rate Mortgage
A mortgage that has a fixed interest rate for the entire term of the loan.
Adjustable Rate Mortgage (ARM)
A mortgage with an interest rate that is periodically adjusted based on a pre-selected index.
Mortgage Broker
An intermediary who brings mortgage borrowers and mortgage lenders together but does not use its own funds to originate mortgages.
Direct Lender
A financial institution that offers mortgages, typically without using a middleman like a broker.
Pre-Approval
A lender's conditional agreement to lend a specific amount to a homebuyer under certain terms and conditions.
Closing Costs
Fees paid at the closing of a real estate transaction, which can include an origination fee, attorney fee, the first month's interest, and other charges.
Amortization
The process of spreading out a loan into a series of fixed payments over the loan's term.
Lien
A legal right or interest that a lender has in the borrower's property, until the debt obligation is satisfied.
Foreclosure
The process by which a lender takes control of a property and sells it to recover the money owed on a defaulted loan.
Home Inspection
An examination of a real estate property's condition, usually performed in connection with the property's sale.
Earnest Money
A deposit made to a seller showing the buyer's good faith in a transaction.
Annual Percentage Rate (APR)
The annual rate charged for borrowing through a loan or earned through an investment, which includes fees and additional costs associated with the transaction.
Equity
The difference between the market value of a property and the amount still owed on its mortgage.
Underwriting
The process a lender uses to assess the creditworthiness and risk of potential borrowers and to finalize the terms of a loan.
Title Insurance
Insurance that protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances, or defects in the title to the property.
Loan-to-Value Ratio (LTV)
A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
Real Estate Agent
A licensed professional who represents buyers or sellers in real estate transactions.
Principal
The amount of money borrowed on which interest is paid in a mortgage.
Interest
The cost of borrowing money, typically a percentage of the amount borrowed.
Tax Deduction
A reduction of income that is able to be taxed, often due to mortgage interest, property tax, or charitable donations.
Mortgage Note
A legal document that obligates a borrower to repay a loan at a stated interest rate during a specified period of time and is secured by a mortgage.
