Mortgage terms explained in plain English.

Definitions are simplified for general education and may not cover every legal, regulatory, investor, or program-specific meaning.

A mortgage with an interest rate that may change according to the loan terms after an initial period.

The scheduled process of paying a loan through principal and interest payments over time.

A disclosure measure intended to reflect the cost of credit using specified assumptions and included fees.

An independent opinion of a property’s value prepared for the lending transaction.

Costs connected with the mortgage and real-estate transaction, which may include lender, title, appraisal, recording, prepaid, and escrow items.

A comparison of certain monthly debt obligations with gross monthly income.

The portion of the purchase price paid from the buyer’s funds or an eligible source rather than the first mortgage.

A deposit typically made with a purchase offer and handled according to the purchase contract.

An account or arrangement used to hold funds, often for property taxes and homeowners insurance.

A mortgage in which the note interest rate does not change during the scheduled loan term.

A standardized disclosure that provides estimated loan terms, projected payments, and closing costs.

Insurance that may protect the lender or guarantor when specified loan conditions apply.

Fees calculated as a percentage of the loan amount; discount points may be paid to obtain a different interest rate.

A term used for a mortgage review that may involve verification of financial information; it is not final loan approval.

An early assessment based on information provided by a borrower; practices and definitions vary.

The amount borrowed or the remaining unpaid balance, excluding interest and certain charges.

Mortgage insurance commonly associated with certain conventional loans when required.

The lender’s review of the borrower, property, documentation, and loan against applicable requirements.