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 monetary institution or dealer complex you with mountainous phrases? Manufacture you are looking out for to sound heaps of savvier when handling your mortgage transaction?This mortgage thesaurus is a valid jam to hone up on your mortgage vocabulary to get dangle of sense of what customarily is a truly complex course of.The more you realize about apparently refined mortgage terms, the more peril you’ll instill to your monetary institution or dealer. Outsmart them early on and so that they’ll mediate twice sooner than making an try to overcharge you.Overview out the ever-expanding “mortgage dictionary” under.  Be particular to click on the hyper-linked terms to fetch a more detailed definition where appropriate:1031 Alternate – a tax-deferred switch of valid property employed to offset or even steer clear of capital beneficial properties tax.15-365 days Mounted Mortgage – a mounted-rate dwelling loan that has half the conventional time length of 30 years.203k Mortgage – an FHA loan that lets in you to finance dwelling enhancements and everlasting financing in a single mortgage loan.three/1 ARM – An ARM that’s mounted for the significant three years (36 months) of the loan time length sooner than turning into yearly adjustable.5/1 ARM – An ARM that doesn’t possess its first adjustment till 365 days six, after which adjusts once yearly thereafter.Adjustable-Rate Mortgage (ARM) – a mortgage with a variable ardour rate, which adjusts month-to-month, biannually, or yearly. Option-hands and hybrid mortgages are also belief to be adjustable-rate mortgages.Alt-A Mortgage – a rental loan that isn’t top or subprime, but somewhere in the center.Amortization – the technique a loan is paid off over time in installments, detailing how grand goes toward ardour, and the procedure in which grand is paid toward predominant.Annual Percentage Rate (APR) – the correct ardour rate you pay on your mortgage, which components in charges, aspects, and diversified charges related to the loan.Assumption – the act of assuming accountability for the cost of a mortgage lien.Balloon Mortgage – a transient mortgage with little month-to-month installments and a tidy lump sum due on the tip of the loan time length. An instance would possibly possibly be a 30 due in 15, which amortizes luxuriate in a 30 365 days mounted, but is due 15 years earlier.Biweekly Mortgage – a mortgage where 26 half payments, or 13 beefy payments, are made yearly.Blanket Mortgage – a single dwelling loan frail to present financing for various properties, equivalent to condominium devices.Bridge Mortgage – a transient time length loan taken out in opposition to one property to finance the acquisition of a sleek property.Expend-Down – the act of securing a decrease than par ardour rate by paying the monetary institution a lender a top class.Caps – initial, periodic, and lifelong fee caps which limit how grand and the procedure in which in most cases an ardour rate can suggested an adjustable-rate mortgage.Cash-In Refinance – a refinance transaction where debtors snarl cash to the closing desk to diminish their mortgage steadiness.Certificate of Practical Charge (CRV) – an appraisal issued by the Veterans Administration to get dangle of out the value of a property. The loan quantity can also simply not exceed the CRV on a VA loan.Closing – the final step in the loan course of when loan paperwork are signed at an escrow or title firm.Closing Costs – the volume of cash that must be paid to shut your loan, in conjunction with lender charges and third-fetch collectively bills, along with taxes and transfer charges.Combo Mortgage – a significant and second mortgage frail on the identical time as to finance a property.Conforming Mortgage – a loan that meets Fannie Mae and Freddie Mac guidelines, which also falls under a particular loan quantity.Development Mortgage – a transient loan given to a builder in the future of intervals of the building course of which is due upon completion of the venture.Primitive Mortgage – any mortgage loan that’s not insured or guaranteed by the federal govt.Credit Myth – a instrument frail by the monetary institution or lender to get dangle of out about your credit ranking profile and your capacity to elevate and repay debt.Credit Ranking – a three-digit quantity that’s frail by lenders to evaluate your creditworthiness. There are minimum rankings for various dwelling loan programs.Debt-to-Earnings Ratio – the ratio of month-to-month liabilities and housing bills divided by the month-to-month unpleasant earnings of the borrower.Deed-in-Lieu of Foreclosure – a strategy of fending off foreclosures by deeding your glean dwelling to the lender.Deed of Belief – a security instrument between the borrower and the lender, recorded in public records as a lien on the subject property. It differs from a mortgage in that the monetary institution can foreclose on the property without judicial court docket cases.Deferred Passion – the volume of ardour added to the predominant loan steadiness when a borrower pays lower than the fervour-highest insist rate (look: option arm).Delinquency – the failure to get dangle of a month-to-month mortgage fee on time, which can eventually lead to a witness of default, and later a foreclosures.Bargain Rate – the fervour rate the Federal Reserve offers to member banks and thrifts.Physician Mortgage – a mortgage designed particularly for a health care provider that would possibly also simply enable financing sooner than employment ancient past is established.Down Charge – an upfront fee made by the dwelling purchaser toward the property catch mark, customarily ranging from five to 20 %. The leisure of the gross sales costs makes up the mortgage loan quantity.Earnest Cash – a deposit paid to the seller by the purchaser as a pledge to total a valid property transaction. If the seller accepts the offer, the deposit is held in escrow and applied to closing charges when the deal is closed.Equal Credit Opportunity Act – a federal law that forestalls lenders from discriminating candidates primarily based on go, religion, nationwide starting put aside, intercourse, age, marital position or involvement in public aid programsEscrow – a third fetch collectively intermediary who holds and allocates funds, in conjunction with taxes and insurance protection in a mortgage transaction.Federal Funds Rate – the fervour rate banks price one another for in a single day utilize of extra reserves.Federal Home Mortgage Mortgage Corporation – one of the highest financiers of dilapidated mortgages on the secondary market. Properly is known as Freddie Mac.Federal National Mortgage Corporation – a publicly owned, govt-sponsored corporation that programs mortgages and resells them on the secondary market. Furthermore known as Fannie Mae.FHA Mortgage – a program originated in the future of The Broad Despair that lets in decrease earnings debtors to qualify for mortgages as long as they fit particular criteria jam forth by the Federal Housing Administration who insures them.First-Time Home Buyer – customarily defined as someone who has not owned another property at any time in the future of the three years ahead of the date of the acquisition.Mounted-Rate Mortgage – a mortgage with a constant ardour rate that will not adjust at any point in the future of the existence of the loan.Foreclosure – the coolest course of wherein a monetary 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 using gift funds to function a mortgage loan.Lawful Faith Estimate – a disclosure which fundamental aspects your loan abstract and an estimate of the bills you’ll incur upon settlement, now identified because the Mortgage Estimate (LE).Graduated Charge Mortgage – a unfavorable amortization mortgage with versatile fee alternate choices that delicately lengthen over time till leveling off. Supposed for young couples who’re unable to get dangle of the beefy mortgage fee, but whose earnings will lengthen over time.Hard Cash Mortgage – a mortgage of last resort for debtors who can’t function financing in the common market attributable to horrible credit ranking.HARP Mortgage – a refinance loan supplied to these with unfavorable equity.Hazard Insurance protection – insurance protection which protects a property owner from damages attributable to fire or extreme weather.Home Appraisal – a comprehensive story that determines the value of your glean dwelling primarily based on various valuation components.Home Equity – the value of a property much less any and all existing liens. If a borrower owns a property value $500,000 and has liens of $400,000, equity is $100,000.Home Equity Line of Credit – a line of credit ranking that makes utilize of the value of a property as collateral.Impound Myth – an account established by the issuing monetary institution/lender or loan servicer to catch month-to-month and robotically pay a borrower’s property taxes and insurance protection charges when payments are due.Passion-Easiest Mortgage – a rental loan that lets in you to pay correct the fervour part of the mortgage fee every month.Funding Property – a property that you just develop not rob, but quite hire out to a tenant.Islamic Mortgage – a mortgage that avoids the cost or receipt of ardour, which is illegal under Islamic law.Jumbo Mortgage – a loan quantity above the conforming loan limits, which is determined every 365 days by Fannie Mae and Freddie Mac. These loans customarily elevate better ardour rates than conforming loans as a result of they’ll’t be supplied to Fannie or Freddie.Lender Credit – a credit ranking paid by the lender to the borrower for taking an above-market ardour rate.Lender-Paid Mortgage Insurance protection – the lender pays to your mortgage insurance protection in switch for the next ardour rate on your mortgage.Lender Overlay – a guiding precept (or jam of guidelines) as properly as to these required by Fannie Mae, Freddie Mac, or the FHA/VA.Letter of Rationalization – a protracted-established loan condition required to sure up or present additional fundamental aspects for any matter that desires additional evaluation.Lien – a claim in opposition to a property by the issuing monetary institution or lender to stable repayment of a debt, customarily in the produce or a mortgage.Mortgage Officer – a representative of a monetary institution or dealer who originates mortgages on their behalf.Mortgage Origination – the initiation of the dwelling loan course of whereby a borrower submits their info to a monetary institution or lender in insist to function mortgage financing.Mortgage Processor – the particular particular person that handles the overall bureaucracy related to closing your loan.Mortgage-to-Charge – the percentage of the appraised property price that’s borrowed from a monetary institution or lender. A down fee of 20% would produce a loan-to-price of eighty%.Margin – a given quantity specified by the monetary institution or lender which when added to the accompanying mortgage index devices the fervour rate for an adjustable-rate mortgage.Mortgage – a transient loan frail to finance the acquisition of valid property, also ceaselessly known as a rental loan.Mortgage Broker – an independent loan originator who works on behalf of customers to function mortgage financing.  Brokers don’t signify a single monetary institution, but quite work with a immense quantity of lenders.Mortgage Bargain Capabilities – a produce of pay as you drag ardour whereby the borrower lowers the fervour rate of the mortgage at closing.Mortgage Due Date – the date your mortgage fee is due every month in the future of the loan’s duration.Mortgagee – the issuing monetary institution or mortgage lender.Mortgage Insurance protection – required insurance protection on a mortgage if the down fee is lower than twenty % and a single loan is frail to finance the property.Mortgage Late – a time length frail in the mortgage industry to name a late fee that’s 30 days or more past due.Mortgage Lender – an institution that originates mortgage loans both to sustain for ardour earnings or sell on the secondary market.Mortgage Charge – the value of your loan, paid month-to-month.Mortgage Capabilities – stands for a percentage point of the loan quantity, customarily makes up the origination fee, which customarily is a part of a present various aspects.Mortgage Valuable – the steadiness of the lien(s) on a property, not in conjunction with ardour. What you owe on your mortgage.Mortgage Rate – the rate of ardour related to your mortgage.Mortgage Rate Lock – the act of locking-in a desired ardour rate on your mortgage so it will most likely’t switch. Borrowers even possess the likelihood to waft their rate.Mortgage Time length – the dimension of your mortgage. Most are 30 years, despite the indisputable truth that 15 years will more than likely be very long-established.Mortgage Underwriter – the particular particular person that choices your mortgage by both approving, suspending, or declining it.Mortgagor – the borrower or rental owner.Harmful Amortization – when a mortgage fee obtained is under the fervour-highest fee, the variation will likely be added onto the predominant steadiness of the loan.Ninja Mortgage – 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 not particularly for Ninjas, until they’ve bought something to cover.No Closing Charge Refinance – a refinance transaction wherein the monetary institution or dealer pays all settlement charges.Sign – a written promise to repay the mortgage plus ardour, which entails the name of the borrower, issuing lender, and the terms and provisions.Option Arm – a rental loan that offers debtors four fee alternate choices, in conjunction with a unfavorable amortization fee option.Origination Charge – a percentage of the loan quantity charged by the monetary institution or dealer for finishing up the loan course of.Par Rate – the fervour rate a borrower will qualify for assuming there just isn’t this form of thing as a rate manipulation.Charge Shock – a surprising, tidy lengthen in the month-to-month mortgage fee as a outcomes of an adjustable-rate mortgage or via a refinance with sleek financing terms.Piggyback Mortgage – a second mortgage that closes simultaneously with the significant mortgage to diminish the total significant down fee.PITI – the month-to-month housing expense, expressed as predominant, ardour, taxes, and insurance protection (look: mortgage fee).Pre-Approval/Pre-Qualification – processes to get dangle of out what you would also afford to be particular you would also function mortgage financing when shopping a property.Prepayment Penalty – if a loan is refinanced or repaid ahead of a particular date as agreed upon in the loan paperwork, a fee will likely be charged by the monetary institution or lender.Valuable Characteristic – a rental or home you intend to rob the extensive majority of the 365 days.Prime Rate – the fervour rate supplied by industrial banks to its highest company customers.Bring collectively Cash Mortgage – a mortgage frail to catch a fraction of property.Licensed Mortgage – a rental loan that meets sleek underwriting guidelines established by the CFPB.  Furthermore known as a QM loan.Quitclaim Deed – a doc wherein a particular person both disclaims ardour in a property or transfers ardour to a different particular person, customarily a well-known other.Refinance – the act of fixing your existing loan(s) with a sleek loan on the identical property. There are two significant forms of refinancing, in conjunction with a rate and time length refinance and cash-out refinance.Reserve Necessities – the volume of verifiable resources that you just must qualify for a given mortgage.Resetting the Clock – while you refinance and lengthen the original loan time length of your mortgage.Reverse Mortgage – a mortgage reserved for house owners extinct 62 or older who wish to faucet their dwelling equity without paying month-to-month mortgage payments.Factual of Rescission – a law which enables a rental owner to rescind a contract to refinance their significant position within three days of signing loan paperwork .Second Mortgage – a mortgage taken out stupid a significant mortgage, both on the identical time as or after the truth.Seller Carryback – when a seller acts because the monetary institution or lender and carries a second mortgage on the subject property.Short Sale – a foreclosures alternative where a property is supplied for lower than the steadiness on the associated mortgage.Short Refinance – a refinance transaction where the lender is of the same opinion to diminish the rate and/or switch the time length despite the mortgage steadiness exceeding the property price.Acknowledged Earnings Mortgage – a mortgage wherein the borrower doesn’t possess to doc their earnings.Streamline Refinance – an expedited refinance that requires limited underwriting, and can also simply even forego the need for an appraisal.Subprime Mortgage – a rental loan reserved must you possess marginal credit ranking or peril qualifying for a dilapidated loan.Teaser Rate – the initial, discounted ardour rate supplied on adjustable-rate mortgages.Title Insurance protection – safety in opposition to complaints and claims tied to the chain of title on the subject property.Underwater Mortgage – a mortgage whose steadiness exceeds the value of the property.  Furthermore known as an “upside down” mortgage.USDA loan – a mortgage insured by the USDA that lets in debtors to catch houses in rural areas with nothing down.VA Mortgage – a mortgage supplied to veterans and their households that’s guaranteed by the Veterans Administration.Yield Unfold Top rate – the commission mortgage brokers frail to receive from banks and mortgage lenders by originating loans.Zero Down Mortgage – a rental loan that doesn’t require a down fee.Zestimate – the estimated market price of a fraction of property primarily based on Zillow’s algorithm.

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