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 financial institution or broker confusing you with huge phrases? Enact you purchase to must sound thousands savvier when handling your mortgage transaction?This mortgage thesaurus is a real do to hone up for your mortgage vocabulary to originate sense of what on the total is a indubitably confusing route of.The more you realize about apparently tough mortgage terms, the more dismay you’ll instill on your financial institution or broker. Outsmart them early on and they’ll judge twice forward of trying to overcharge you.Check out the ever-rising “mortgage dictionary” under.  Design particular to click on on the hyper-linked terms to obtain a more detailed definition where appropriate:1031 Substitute – a tax-deferred alternate of precise estate employed to offset and even avoid capital gains tax.15-Year Mounted Mortgage – a mounted-rate residence loan that has 1/2 the in style term of 30 years.203k Loan – an FHA loan that lets in you to finance residence enhancements and permanent financing in a single mortgage loan.Three/1 ARM – An ARM that is mounted for the first three years (36 months) of the loan term forward of becoming yearly adjustable.5/1 ARM – An ARM that doesn’t have its first adjustment unless year six, and then adjusts once yearly thereafter.Adjustable-Rate Mortgage (ARM) – a mortgage with a variable curiosity rate, which adjusts month-to-month, biannually, or yearly. Option-hands and hybrid mortgages are also regarded as adjustable-rate mortgages.Alt-A Mortgage – a residence loan that isn’t prime or subprime, nonetheless someplace in the guts.Amortization – the system a loan is paid off over time in installments, detailing how well-known goes in opposition to curiosity, and how well-known is paid in opposition to fundamental.Annual Share Rate (APR) – the precise curiosity rate you pay for your mortgage, which elements in expenses, points, and other prices associated with the loan.Assumption – the act of assuming accountability for the payment of a mortgage lien.Balloon Mortgage – a instant-term mortgage with minute month-to-month installments and a mammoth lump sum due at the terminate of the loan term. An instance would be a 30 due in 15, which amortizes esteem a 30 year mounted, nonetheless is due 15 years earlier.Biweekly Mortgage – a mortgage where 26 1/2 funds, or Thirteen beefy funds, are made yearly.Blanket Mortgage – a single residence loan aged to produce financing for multiple properties, akin to rental objects.Bridge Loan – a instant term loan taken out against one property to finance the elevate of a new property.Bewitch-Down – the act of securing a decrease than par curiosity rate by paying the financial institution a lender a premium.Caps – preliminary, periodic, and lifetime rate caps which limit how well-known and how in most cases an curiosity rate can alternate on an adjustable-rate mortgage.Cash-In Refinance – a refinance transaction where borrowers lift cash to the closing table to decrease their mortgage balance.Certificate of Sensible Fee (CRV) – an appraisal issued by the Veterans Administration to resolve the payment of a property. The loan amount may no longer exceed the CRV on a VA loan.Closing – the final step in the loan route of when loan paperwork are signed at an escrow or title company.Closing Charges – the amount of cash that ought to be paid to shut your loan, along side lender expenses and 1/Three-obtain collectively prices, along with taxes and transfer expenses.Combo Loan – a important and 2d mortgage aged similtaneously to finance a property.Conforming Loan – a loan that meets Fannie Mae and Freddie Mac pointers, which also falls below a obvious loan amount.Construction Loan – a instant-term loan given to a builder all the plan in which via intervals of the building route of which is due upon completion of the project.Old school Mortgage – any mortgage loan that is no longer insured or guaranteed by the federal authorities.Credit Document – a machine aged by the financial institution or lender to search out out about your credit rating profile and your capability to retain and repay debt.Credit Obtain – a Three-digit number that is aged by lenders to evaluate your creditworthiness. There are minimum scores for many residence loan applications.Debt-to-Profits Ratio – the ratio of month-to-month liabilities and housing prices divided by the month-to-month harmful earnings of the borrower.Deed-in-Lieu of Foreclosures – one plan of avoiding foreclosure by deeding your residence to the lender.Deed of Belief – a security instrument between the borrower and the lender, recorded in public recordsdata as a lien on the sphere property. It differs from a mortgage in that the financial institution can foreclose on the property with out judicial court cases.Deferred Interest – the amount of curiosity added to the fundamental loan balance when a borrower pays lower than the curiosity-handiest stamp rate (peer: possibility arm).Delinquency – the failure to originate a month-to-month mortgage rate on time, that may sooner or later consequence in a survey of default, and later a foreclosure.Nick again set aside Rate – the curiosity rate the Federal Reserve provides to member banks and thrifts.Doctor Mortgage – a mortgage designed namely for a doctor that will allow financing forward of employment history is established.Down Fee – an upfront rate made by the residence purchaser in opposition to the property elevate set aside, in most cases starting from five to 20 percent. The the relaxation of the sales prices makes up the mortgage loan amount.Earnest Cash – a deposit paid to the seller by the purchaser as a pledge to total an actual estate transaction. If the seller accepts the provide, the deposit is held in escrow and utilized to closing prices when the deal is closed.Equal Credit Opportunity Act – a federal legislation that stops lenders from discriminating applicants per whisk, faith, nationwide foundation, intercourse, age, marital jam or involvement in public aid programsEscrow – a 3rd obtain collectively intermediary who holds and allocates funds, along side taxes and insurance coverage in a mortgage transaction.Federal Funds Rate – the curiosity rate banks payment one one other for in a single day use of excess reserves.Federal Home Loan Mortgage Company – one amongst the very finest financiers of primitive mortgages on the secondary market. Neatly is named Freddie Mac.Federal National Mortgage Company – a publicly owned, authorities-subsidized company that programs mortgages and resells them on the secondary market. Is also known as Fannie Mae.FHA Loan – a program originated all the plan in which via The Splendid Depression that lets in decrease earnings borrowers to qualify for mortgages as lengthy as they fit obvious criteria living forth by the Federal Housing Administration who insures them.First-Time Home Purchaser – fundamentally outlined as somebody who has no longer owned one other property at any time all the plan in which via the three years before the date of the elevate.Mounted-Rate Mortgage – a mortgage with a constant curiosity rate that is no longer going to regulate at any level all the plan in which via the lifestyles of the loan.Foreclosures – the correct route of whereby a financial institution or lender sells a property after a borrower fails to meet the repayment terms of the loan.Present Letter – a letter required by the borrower when the use of gift funds to ruin a mortgage loan.Exact Faith Estimate – a disclosure which details your loan summary and an estimate of the prices you’ll incur upon settlement, now’s named the Loan Estimate (LE).Graduated Fee Mortgage – a negative amortization mortgage with versatile rate alternate solutions that often increase over time unless leveling off. Intended for young couples who are unable to originate the beefy mortgage rate, nonetheless whose earnings will increase over time.Laborious Cash Loan – a mortgage of last resort for borrowers who can’t ruin financing in the conventional market which skill of very harmful credit rating.HARP Loan – a refinance loan offered to those with negative fairness.Hazard Insurance – insurance coverage which protects a property proprietor from damages attributable to fireplace or excessive weather.Home Appraisal – a comprehensive allege that determines the payment of your residence per a replacement of valuation elements.Home Fairness – the payment of a property much less any and all existing liens. If a borrower owns a property price $500,000 and has liens of $Four hundred,000, fairness is $100,000.Home Fairness Line of Credit – a line of credit rating that makes use of the payment of a property as collateral.Impound Yarn – an memoir established by the issuing financial institution/lender or loan servicer to obtain month-to-month and automatically pay a borrower’s property taxes and insurance coverage prices when funds are due.Interest-Most efficient Mortgage – a residence loan that lets in you to pay real the curiosity part of the mortgage rate every month.Funding Property – a property that you just enact no longer earn, nonetheless moderately hire out to a tenant.Islamic Mortgage – a mortgage that avoids the payment or receipt of curiosity, which is illegal below Islamic legislation.Jumbo Loan – a loan amount above the conforming loan limits, which is determined once a year by Fannie Mae and Freddie Mac. These loans fundamentally lift higher curiosity charges than conforming loans as a consequence of they are going to’t be offered to Fannie or Freddie.Lender Credit – a credit rating paid by the lender to the borrower for taking an above-market curiosity rate.Lender-Paid Mortgage Insurance – the lender pays to your mortgage insurance coverage in alternate for a higher curiosity rate for your mortgage.Lender Overlay – a guideline (or living of pointers) to boot to those required by Fannie Mae, Freddie Mac, or the FHA/VA.Letter of Clarification – a overall loan situation required to determined up or present extra details for any matter that wants extra evaluate.Lien – a claim against a property by the issuing financial institution or lender to trusty repayment of a debt, fundamentally in the originate or a mortgage.Loan Officer – a marketing and marketing consultant of a financial institution or broker who originates mortgages on their behalf.Loan Origination – the initiation of the residence loan route of whereby a borrower submits their recordsdata to a financial institution or lender in expose to ruin mortgage financing.Loan Processor – the person that handles the total bureaucracy associated with closing your loan.Loan-to-Fee – the proportion of the appraised property rate that is borrowed from a financial institution or lender. A down rate of 20% would plan a loan-to-rate of Eighty%.Margin – a given amount specified by the financial institution or lender which when added to the accompanying mortgage index sets the curiosity rate for an adjustable-rate mortgage.Mortgage – a instant-term loan aged to finance the elevate of precise property, in most cases is named a residence loan.Mortgage Broker – an self reliant loan originator who works on behalf of clients to ruin mortgage financing.  Brokers don’t signify a single financial institution, nonetheless moderately work with plenty of lenders.Mortgage Nick again set aside Parts – a originate of prepaid curiosity whereby the borrower lowers the curiosity rate of the mortgage at closing.Mortgage Due Date – the date your mortgage rate is due every month all the plan in which via the loan’s duration.Mortgagee – the issuing financial institution or mortgage lender.Mortgage Insurance – required insurance coverage on a mortgage if the down rate is lower than twenty percent and a single loan is aged to finance the property.Mortgage Gradual – a term aged in the mortgage industry to title a insensible rate that is 30 days or more insensible.Mortgage Lender – an establishment that originates mortgage loans both to lend a hand for curiosity earnings or promote on the secondary market.Mortgage Fee – the payment of your loan, paid month-to-month.Mortgage Parts – stands for a proportion level of the loan amount, fundamentally makes up the origination rate, which on the total is a bit of a level to multiple points.Mortgage Well-known – the balance of the lien(s) on a property, no longer along side curiosity. What you owe for your mortgage.Mortgage Rate – the rate of curiosity associated with your mortgage.Mortgage Rate Lock – the act of locking-in a desired curiosity rate for your mortgage so it will most likely not alternate. Debtors even have the likelihood to waft their rate.Mortgage Time frame – the length of your mortgage. Most are 30 years, though 15 years is also very overall.Mortgage Underwriter – the person that choices your mortgage by both approving, suspending, or declining it.Mortgagor – the borrower or homeowner.Adverse Amortization – when a mortgage rate received is under the curiosity-handiest rate, the variation will most likely be added onto the fundamental balance of the loan.Ninja Loan – no earnings, no job, no asset loan. A “Ninja loan” is industry slang for a no doc loan, which doesn’t require earnings, asset, or job verification.  NoIncomeNoJobAssets.  It’s no longer namely for Ninjas, unless they’ve received one thing to conceal.No Closing Fee Refinance – a refinance transaction via which the financial institution or broker pays all settlement prices.Existing – a written promise to repay the mortgage plus curiosity, which contains the title of the borrower, issuing lender, and the terms and provisions.Option Arm – a residence loan that provides borrowers Four rate alternate solutions, along side a negative amortization rate possibility.Origination Rate – a proportion of the loan amount charged by the financial institution or broker for polishing off the loan route of.Par Rate – the curiosity rate a borrower will qualify for assuming there may be now not any longer any rate manipulation.Fee Shock – a sudden, mammoth increase in the month-to-month mortgage rate as a results of an adjustable-rate mortgage or via a refinance with new financing terms.Piggyback Mortgage – a 2d mortgage that closes simultaneously with the first mortgage to decrease the total necessary down rate.PITI – the month-to-month housing expense, expressed as fundamental, curiosity, taxes, and insurance coverage (peer: mortgage rate).Pre-Approval/Pre-Qualification – processes to resolve what which it is most likely you’ll be in a instruct to have ample cash to be particular which it is most likely you’ll be in a instruct to ruin mortgage financing when buying a property.Prepayment Penalty – if a loan is refinanced or repaid before a obvious date as agreed upon in the loan paperwork, a rate will most likely be charged by the financial institution or lender.Important Field – a residence or rental you blueprint to earn the bulk of the year.Top Rate – the curiosity rate offered by industrial banks to its handiest corporate clients.Design shut Cash Mortgage – a mortgage aged to raise a part of property.Certified Mortgage – a residence loan that meets new underwriting pointers established by the CFPB.  Is also known as a QM loan.Quitclaim Deed – a doc whereby a person both disclaims curiosity in a property or transfers curiosity to 1 other person, fundamentally a important other.Refinance – the act of fixing your existing loan(s) with a new loan on the identical property. There are two foremost forms of refinancing, along side a rate and term refinance and cash-out refinance.Reserve Requirements – the amount of verifiable sources you wish qualify for a given mortgage.Resetting the Clock – in the event you refinance and lengthen the conventional loan term of your mortgage.Reverse Mortgage – a mortgage reserved for house owners ragged 62 or older who purchase to faucet their residence fairness with out paying month-to-month mortgage funds.Exact of Rescission – a legislation which permits a dwelling owner to rescind a contract to refinance their vital instruct within three days of signing loan paperwork .2nd Mortgage – a mortgage taken out in the lend a hand of a important mortgage, both similtaneously or after the truth.Vendor Carryback – when a vendor acts as the financial institution or lender and carries a 2d mortgage on the sphere property.Brief Sale – a foreclosure replacement where a property is offered for lower than the balance on the associated mortgage.Brief Refinance – a refinance transaction where the lender is of the same opinion to decrease the rate and/or alternate the term regardless of the mortgage balance exceeding the property rate.Acknowledged Profits Mortgage – a mortgage via which the borrower does no longer must doc their earnings.Streamline Refinance – an expedited refinance that requires restricted underwriting, and may even forego the need for an appraisal.Subprime Mortgage – a residence loan reserved for fogeys who have marginal credit rating or command qualifying for a primitive loan.Teaser Rate – the preliminary, discounted curiosity rate offered on adjustable-rate mortgages.Title Insurance – safety against court cases and claims tied to the chain of title on the sphere property.Underwater Mortgage – a mortgage whose balance exceeds the payment of the property.  Is also known as an “the other plan up” mortgage.USDA loan – a mortgage insured by the USDA that lets in borrowers to raise homes in rural areas with nothing down.VA Mortgage – a mortgage offered to veterans and their families that is guaranteed by the Veterans Administration.Yield Unfold Top rate – the commission mortgage brokers aged to receive from banks and mortgage lenders by originating loans.Zero Down Mortgage – a residence loan that doesn’t require a down rate.Zestimate – the estimated market rate of a part of property per Zillow’s algorithm.

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