Education & resources

Mortgage Glossary

Plain-language definitions for common mortgage, real-estate, and lending terms.

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Adjustable-rate mortgage (ARM)

A mortgage with an interest rate that may change after an initial period according to the loan’s index, margin, and caps.

A standardized measure that reflects the interest rate and certain loan costs as an annual percentage.

A professional opinion of property value prepared for the mortgage transaction.

Fees and prepaid items associated with obtaining the loan and completing the real-estate transaction.

Monthly debt obligations divided by qualifying gross monthly income.

Upfront interest paid to obtain a specified note-rate adjustment, subject to the lender’s pricing.

The portion of the purchase price paid from the buyer’s eligible funds rather than mortgage proceeds.

An account used to collect and pay eligible property taxes, insurance, and other housing-related charges.

The loan amount divided by the property value used for the transaction.

Coverage that protects a lender or insurer against certain losses; borrower-paid requirements depend on program and loan-to-value.

An initial estimate based on information provided; it is not a loan approval or commitment.

The portion of a payment used to repay the amount borrowed and the interest charged.

An agreement, subject to stated conditions, to hold specified pricing for a defined period.

The review of the borrower, property, documentation, and transaction against applicable requirements.