A
Adjustable-Rate Mortgage (ARM): Loan with lower starting rate that adjusts with the market.
Amortization: 30,000-foot view of your mortgage payment over years.
Amortization Schedule: Breakdown of your principal and interest payments over time.
Annual Percentage Rate (APR): Most realistic interest rate that includes fees and charges.
Appraisal: Property inspection by certified appraiser to determine property value
Assessed Value: Specific property value used for tax purposes, not mortgage.
Assets: Owned items with monetary value including cash and accounts, too.
Assumption: When a buyer takes on a seller's existing mortgage.
B
Back-End DTI: All monthly debts over monthly income
Balloon Mortgage: Low upfront payments, lump-sum balance due later.
Bankruptcy: Legal inability to repay debts, affecting loan eligibility.
Buyer’s Agent: Represents home buyer in a real estate transaction.
C
Closing Day: Date for signing final mortgage documents and paying closing costs.
Closing Agent: Coordinates closing documents and funds distribution.
Closing Costs: Additional expenses beyond the home purchase price due at closing.
Closing Disclosure: Final loan details provided by lender three days before closing.
Commitment Letter: Lender's loan terms confirmation.
Concession: Offers or discounts during negotiations, like seller-paid repairs.
Condominium: Owned unit in a multi-unit building or property.
Contingency: Contract exit option if conditions aren't met.
Counter-Offer: Revised offer in ongoing negotiation.
Credit Bureau: Collects credit data, generates credit reports and scores.
Credit History: Record of debt management and payment consistency.
Credit Report: Overview of credit use and history.
Credit Score: Numeric measure of creditworthiness based on history of credit use.
D
Debt: Owed money or financial obligation.
Debt-to-Income Ratio (DTI): Income ratio covering monthly debts.
Deed: Legal document transferring property ownership.
Down Payment: Initial money due when buying a house, not borrowed.
E
Earnest Money Deposit: Money set aside when offer is made, often non-refundable.
Escrow: Account that holds funds for later distribution. (Insurance, taxes, etc.)
F
Front End DTI/Housing Ratio: Primary Housing Expense over monthly income
FHA Loan: Mortgage backed by Federal Housing Administration. Great for first timers.
Fixed Income: Salary or non-fluctuating income. Easier to qualify with.
Fixed-Rate Mortgage: Very common loan with interest rate that doesn’t change over time.
G
Gift Letter: Official document showing money gifted to you for down payment.
Gross Monthly Income: Total monthly pay before deductions or taxes including bonuses, commissions.
H
Home Inspection: Property condition check by professional inspector. Highly recommended, not required.
Homeowner's Insurance: Monetary protection for home damages, liability, personal property.
I
Inquiry: Credit application submission that will show on a credit report.
Interest: Money paid for borrowing money, usually expressed as a percentage.
L
Liabilities: Financial obligations or debts. Car loans, credit cards, alimony, etc.
Listing: Description published to sell a property.
Loan Estimate: Lender-provided mortgage cost overview. Multiple given through mortgage process.
Loan Origination Fees: Lender charges for processing mortgage application.
Lock-In Rate: Guaranteed interest rate for a specific period of time.