Glossary

Mortgage terms, defined simply

The terms you'll see on your application, your estimate, and your closing disclosure — explained in plain English.

APR

Annual Percentage Rate — the yearly cost of your loan including interest and fees.

Fees paid at closing, including title, taxes, and lender charges — typically 2–5% of the loan amount.

The portion of the home price you pay upfront; the loan covers the rest.

A neutral third party holding funds and documents until all conditions of the sale are met.

Loan-to-Value ratio — your loan amount divided by the home's value or price.

Private Mortgage Insurance — required on conventional loans with less than 20% down.

Optional upfront fees paid to lower your interest rate, also called discount points.

The lender's review of your finances and the property to approve the loan.

The gradual repayment of your loan through scheduled monthly payments of principal and interest.

The total amount you need to bring to closing — your down payment plus closing costs minus any credits or deposits.

A condition that must be met before a sale is finalized, such as a satisfactory inspection or appraisal.

A good-faith deposit submitted with your offer to show you're a serious buyer; applied toward closing costs at settlement.

A loan with an interest rate that stays the same for the entire term.

A loan with an interest rate that can change after an initial fixed period, based on market conditions.

A lender's written commitment to lend a specific amount, based on a credit check and document review.

A quick estimate of how much you may be able to borrow, based on self-reported information.

Insurance that protects you and the lender against claims on the property's title.

A guarantee that your interest rate won't change between the lock date and closing.

Our team is happy to explain anything — no obligation.