Mortgage Dictionary – Glossary of Key Mortgage Phrases

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  • Mortgage Dictionary – Glossary of Key Mortgage Phrases
    Mortgage Dictionary – Glossary of Key Mortgage Phrases

    Is your bank or dealer confusing you with immense phrases? Prevent like to have to sound a total lot savvier when handling your mortgage transaction?This mortgage glossary is a real set up to hone up for your mortgage vocabulary to assemble sense of what can also additionally be a the truth is confusing job.The extra you realize about apparently complex mortgage terms, the extra pain you’ll instill for your bank or dealer. Outsmart them early on and they’ll bear in mind carefully forward of attempting to overcharge you.Try the ever-increasing “mortgage dictionary” under.  Guarantee to click on on the hyper-linked terms to come by a extra detailed definition the set up appropriate:1031 Alternate – a tax-deferred exchange of loyal property employed to offset and even steer particular of capital beneficial properties tax.15-Year Mounted Mortgage – a mounted-fee dwelling mortgage that has 1/2 the regular time length of 30 years.203k Mortgage – an FHA mortgage that capability that you just can finance dwelling enhancements and everlasting financing in a single mortgage mortgage.Three/1 ARM – An ARM that is mounted for the first three years (36 months) of the mortgage time length forward of changing into yearly adjustable.5/1 ARM – An ARM that doesn’t have its first adjustment till twelve months six, and then adjusts as soon as yearly thereafter.Adjustable-Charge Mortgage (ARM) – a mortgage with a variable curiosity fee, which adjusts monthly, biannually, or yearly. Probability-arms and hybrid mortgages are also thought of adjustable-fee mortgages.Alt-A Mortgage – a dwelling mortgage that isn’t high or subprime, but somewhere in the heart.Amortization – the manner a mortgage is paid off over time in installments, detailing how essential goes in direction of curiosity, and how essential is paid in direction of major.Annual Share Charge (APR) – the particular curiosity fee you pay for your mortgage, which components in bills, aspects, and other costs connected with the mortgage.Assumption – the act of assuming accountability for the price of a mortgage lien.Balloon Mortgage – a momentary mortgage with microscopic monthly installments and a extensive lump sum due at the waste of the mortgage time length. An instance would be a 30 due in 15, which amortizes like a 30 twelve months mounted, but is due 15 years earlier.Biweekly Mortgage – a mortgage the set up 26 1/2 funds, or Thirteen full funds, are made yearly.Blanket Mortgage – a single dwelling mortgage aged to present financing for a few properties, akin to condo objects.Bridge Mortgage – a short time length mortgage taken out against one property to finance the accept as true with of a brand original property.Secure-Down – the act of securing a lower than par curiosity fee by paying the bank a lender a top class.Caps – preliminary, periodic, and lifelong price caps which restrict how essential and how most ceaselessly an curiosity fee can swap on an adjustable-fee mortgage.Cash-In Refinance – a refinance transaction the set up debtors ship money to the closing desk to lower their mortgage balance.Certificate of Cheap Establish (CRV) – an appraisal issued by the Veterans Administration to search out out the worth of a property. The mortgage quantity could not exceed the CRV on a VA mortgage.Closing – the final step in the mortgage job when mortgage documents are signed at an escrow or title company.Closing Costs – the quantity of cash that have to be paid to shut your mortgage, collectively with lender bills and 1/Three-celebration costs, collectively with taxes and transfer bills.Combo Mortgage – a first and 2nd mortgage aged at the identical time as to finance a property.Conforming Mortgage – a mortgage that meets Fannie Mae and Freddie Mac guidelines, which also falls below a particular mortgage quantity.Construction Mortgage – a momentary mortgage given to a builder at some level of intervals of the constructing job which is due upon completion of the project.Former Mortgage – any mortgage mortgage that’s not insured or assured by the federal government.Credit score Characterize – a application aged by the bank or lender to evaluate your credit profile and your ability to raise and repay debt.Credit score Fetch – a three-digit number that is aged by lenders to assess your creditworthiness. There are minimal ratings for many dwelling mortgage programs.Debt-to-Earnings Ratio – the ratio of monthly liabilities and housing costs divided by the monthly irascible earnings of the borrower.Deed-in-Lieu of Foreclosures – a mode of averting foreclosures by deeding your maintain dwelling to the lender.Deed of Have faith – a security instrument between the borrower and the lender, recorded in public info as a lien on the topic property. It differs from a mortgage in that the bank can foreclose on the property without judicial court docket cases.Deferred Passion – the quantity of curiosity added to the major mortgage balance when a borrower will pay not as much as the curiosity-handiest repeat fee (scrutinize: likelihood arm).Delinquency – the failure to assemble a monthly mortgage price on time, which is moving to in a roundabout device result in a ogle of default, and later a foreclosures.Carve tag Charge – the curiosity fee the Federal Reserve gives to member banks and thrifts.Physician Mortgage – a mortgage designed namely for a doctor that will possibly possibly allow financing forward of employment history is established.Down Price – an upfront price made by the home buyer in direction of the property accept as true with tag, on the entire starting from 5 to twenty %. The rest of the gross sales costs makes up the mortgage mortgage quantity.Earnest Money – a deposit paid to the vendor by the shopper as a pledge to total a loyal property transaction. If the vendor accepts the offer, the deposit is held in escrow and applied to closing costs when the deal is closed.Equal Credit score Different Act – a federal regulations that forestalls lenders from discriminating candidates essentially based on stride, religion, national origin, intercourse, age, marital jam or involvement in public help programsEscrow – a 1/Three celebration intermediary who holds and allocates funds, collectively with taxes and insurance coverage in a mortgage transaction.Federal Funds Charge – the curiosity fee banks fee one one more for in a single day exercise of excess reserves.Federal Home Mortgage Mortgage Company – one amongst the largest financiers of passe mortgages on the secondary market. Properly is called Freddie Mac.Federal National Mortgage Company – a publicly owned, government-sponsored corporation that capabilities mortgages and resells them on the secondary market. Usually is called Fannie Mae.FHA Mortgage – a program originated at some level of The Broad Despair that permits lower earnings debtors to qualify for mortgages as lengthy as they match particular criteria situation forth by the Federal Housing Administration who insures them.First-Time Home Purchaser – most ceaselessly outlined as any individual who has not owned one more property at any time at some level of the three years outdated to the date of the accept as true with.Mounted-Charge Mortgage – a mortgage with a fixed curiosity fee that’s not going to adjust at any level at some level of the lifetime of the mortgage.Foreclosures – the particular job by which a bank or lender sells a property after a borrower fails to meet the compensation terms of the mortgage.Reward Letter – a letter required by the borrower when the exercise of reward funds to fabricate a mortgage mortgage.True Faith Estimate – a disclosure which particulars your mortgage summary and an estimate of the costs you’ll incur upon settlement, now is called the Mortgage Estimate (LE).Graduated Price Mortgage – a antagonistic amortization mortgage with versatile price alternatives that gradually expand over time till leveling off. Meant for younger couples who are unable to assemble the entire mortgage price, but whose earnings will expand over time.Provocative Money Mortgage – a mortgage of final resort for debtors who can’t fabricate financing in the long-established market ensuing from abominable credit.HARP Mortgage – a refinance mortgage supplied to those with antagonistic equity.Hazard Insurance coverage – insurance coverage which protects a property owner from damages precipitated by fireplace or extreme climate.Home Appraisal – a entire narrative that determines the worth of your maintain dwelling essentially based on a preference of valuation components.Home Equity – the worth of a property less any and all existing liens. If a borrower owns a property worth $500,000 and has liens of $Four hundred,000, equity is $100,000.Home Equity Line of Credit score – a line of credit that makes exercise of the worth of a property as collateral.Impound Account – an memoir established by the issuing bank/lender or mortgage servicer to get monthly and mechanically pay a borrower’s property taxes and insurance coverage costs when funds are due.Passion-Ideal Mortgage – a dwelling mortgage that capability that you just pays factual the curiosity piece of the mortgage price each and every month.Investment Property – a property that you just enact not score, but quite rent out to a tenant.Islamic Mortgage – a mortgage that avoids the price or receipt of curiosity, which is prohibited below Islamic regulations.Jumbo Mortgage – a mortgage quantity above the conforming mortgage limits, which is situation each and every twelve months by Fannie Mae and Freddie Mac. These loans most ceaselessly elevate increased curiosity charges than conforming loans because they’ll’t be bought to Fannie or Freddie.Lender Credit score – a credit paid by the lender to the borrower for taking an above-market curiosity fee.Lender-Paid Mortgage Insurance coverage – the lender will pay to your mortgage insurance coverage in exchange for a increased curiosity fee for your mortgage.Lender Overlay – a tenet (or situation of guidelines) as well to those required by Fannie Mae, Freddie Mac, or the FHA/VA.Letter of Explanation – a frequent mortgage situation required to particular up or present extra particulars for any matter that wants additional evaluate.Lien – a claim against a property by the issuing bank or lender to stable compensation of a debt, most ceaselessly in the make or a mortgage.Mortgage Officer – a manual of a bank or dealer who originates mortgages on their behalf.Mortgage Origination – the initiation of the home mortgage job whereby a borrower submits their info to a bank or lender in uncover to fabricate mortgage financing.Mortgage Processor – the particular person that handles your entire bureaucracy connected with closing your mortgage.Mortgage-to-Establish – the proportion of the appraised property tag that is borrowed from a bank or lender. A down price of 20% would produce a mortgage-to-tag of Eighty%.Margin – a given quantity specified by the bank or lender which when added to the accompanying mortgage index sets the curiosity fee for an adjustable-fee mortgage.Mortgage – a temporary mortgage aged to finance the accept as true with of loyal property, most ceaselessly is called a dwelling mortgage.Mortgage Dealer – an unprejudiced mortgage originator who works on behalf of shoppers to fabricate mortgage financing.  Brokers don’t signify a single bank, but quite work with a huge preference of lenders.Mortgage Carve tag Capabilities – a make of pay as you slither curiosity whereby the borrower lowers the curiosity fee of the mortgage at closing.Mortgage Due Date – the date your mortgage price is due each and every month at some level of the mortgage’s duration.Mortgagee – the issuing bank or mortgage lender.Mortgage Insurance coverage – required insurance coverage on a mortgage if the down price shouldn’t be as much as twenty % and a single mortgage is aged to finance the property.Mortgage Gradual – a time length aged in the mortgage commerce to title a late price that is 30 days or extra late.Mortgage Lender – an institution that originates mortgage loans both to purchase for curiosity earnings or sell on the secondary market.Mortgage Price – the worth of your mortgage, paid monthly.Mortgage Capabilities – stands for a percentage level of the mortgage quantity, most ceaselessly makes up the origination price, which is moving to be a a part of a blow their own horns a few aspects.Mortgage Well-known – the balance of the lien(s) on a property, not collectively with curiosity. What you owe for your mortgage.Mortgage Charge – the fee of curiosity connected with your mortgage.Mortgage Charge Lock – the act of locking-in a desired curiosity fee for your mortgage so it goes to not swap. Debtors also have the system to lope their fee.Mortgage Duration of time – the dimension of your mortgage. Most are 30 years, even supposing 15 years is also very frequent.Mortgage Underwriter – the particular person that decisions your mortgage by both approving, suspending, or declining it.Mortgagor – the borrower or dwelling owner.Detrimental Amortization – when a mortgage price got is under the curiosity-handiest price, the adaptation will seemingly be added onto the major balance of the mortgage.Ninja Mortgage – no earnings, no job, no asset mortgage. A “Ninja mortgage” is commerce slang for a no doc mortgage, which doesn’t require earnings, asset, or job verification.  NoIncomeNoJobAssets.  It’s not namely for Ninjas, except they’ve got something to conceal.No Closing Establish Refinance – a refinance transaction whereby the bank or dealer will pay all settlement costs.Showcase – a written promise to repay the mortgage plus curiosity, which incorporates the title of the borrower, issuing lender, and the terms and provisions.Probability Arm – a dwelling mortgage that offers debtors Four price alternatives, collectively with a antagonistic amortization price likelihood.Origination Price – a percentage of the mortgage quantity charged by the bank or dealer for finishing up the mortgage job.Par Charge – the curiosity fee a borrower will qualify for assuming there might be not one of these thing as a fee manipulation.Price Shock – a surprising, extensive expand in the monthly mortgage price attributable to an adjustable-fee mortgage or thru a refinance with original financing terms.Piggyback Mortgage – a 2nd mortgage that closes simultaneously with the first mortgage to lower the entire compulsory down price.PITI – the monthly housing expense, expressed as major, curiosity, taxes, and insurance coverage (scrutinize: mortgage price).Pre-Approval/Pre-Qualification – processes to search out out what that you just might additionally afford to confirm that you just might additionally fabricate mortgage financing when shopping a property.Prepayment Penalty – if a mortgage is refinanced or repaid outdated to a particular date as agreed upon in the mortgage documents, a price will seemingly be charged by the bank or lender.Essential Characteristic – a dwelling or dwelling you propose to score the majority of the twelve months.High Charge – the curiosity fee supplied by industrial banks to its handiest corporate potentialities.Opt Money Mortgage – a mortgage aged to raise a portion of property.Profitable Mortgage – a dwelling mortgage that meets original underwriting guidelines established by the CFPB.  Usually is called a QM mortgage.Quitclaim Deed – a narrative by which a person both disclaims curiosity in a property or transfers curiosity to one more person, most ceaselessly a companion.Refinance – the act of changing your existing mortgage(s) with a brand original mortgage on the an identical property. There are two major styles of refinancing, collectively with a fee and time length refinance and money-out refinance.Reserve Requirements – the quantity of verifiable sources it is probably you’ll possibly presumably decide to qualify for a given mortgage.Resetting the Clock – while you refinance and lengthen the long-established mortgage time length of your mortgage.Reverse Mortgage – a mortgage reserved for owners feeble sixty two or older who like to tap their dwelling equity without paying monthly mortgage funds.Upright of Rescission – a regulations which enables a dwelling owner to rescind a contract to refinance their main space within three days of signing mortgage documents .2nd Mortgage – a mortgage taken out late a first mortgage, both at the identical time as or after the reality.Vendor Carryback – when a vendor acts because the bank or lender and carries a 2nd mortgage on the topic property.Rapid Sale – a foreclosures replacement the set up a property is bought for not as much as the balance on the connected mortgage.Rapid Refinance – a refinance transaction the set up the lender has the same opinion to lower the fee and/or swap the time length no matter the mortgage balance exceeding the property tag.Said Earnings Mortgage – a mortgage whereby the borrower doesn’t have to narrative their earnings.Streamline Refinance – an expedited refinance that requires tiny underwriting, and can have to even forego the want for an appraisal.Subprime Mortgage – a dwelling mortgage reserved for many who have marginal credit or pain qualifying for a primitive mortgage.Teaser Charge – the preliminary, discounted curiosity fee supplied on adjustable-fee mortgages.Title Insurance coverage – protection against court docket cases and claims tied to the chain of title on the topic property.Underwater Mortgage – a mortgage whose balance exceeds the worth of the property.  Usually is called an “upside down” mortgage.USDA mortgage – a mortgage insured by the USDA that permits debtors to raise properties in rural areas with nothing down.VA Mortgage – a mortgage supplied to veterans and their families that is assured by the Veterans Administration.Yield Spread Top fee – the price mortgage brokers aged to receive from banks and mortgage lenders by originating loans.Zero Down Mortgage – a dwelling mortgage that doesn’t require a down price.Zestimate – the estimated market tag of a portion of property essentially based on Zillow’s algorithm.

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