Mortgage Glossary
This glossary explains the most common mortgage terms in clear, simple language. Use it as a quick reference whenever you need to understand a word or phrase during the loan process.
Key Mortgage Terms
- Amortization — How your loan is paid down over time
- APR — Total cost of borrowing including fees
- Appraisal — Professional estimate of home value
- Closing Costs — Fees paid at the end of the loan process
- DTI — Debt-to-income ratio
- Equity — The portion of the home you own
- Escrow — Funds held for taxes and insurance
- Interest Rate — Cost of borrowing money
- Loan Estimate — Document showing loan terms and costs
- LTV — Loan-to-value ratio
- Mortgage Insurance — Protects lender if you default
- Pre-Approval — Confirms how much you qualify for
- Principal — Amount borrowed
- Rate Lock — Guarantees your interest rate
- Underwriting — Lender’s review of your financials
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