Glossary
Mortgage terms, in plain language.
If a term in your loan documents is not here, ask Jim. Nobody should sign something they cannot explain.
- Amortization
- The schedule by which a loan balance is paid down over time through regular principal and interest payments.
- Annual Percentage Rate (APR)
- A broader measure of borrowing cost that reflects the interest rate together with certain fees, expressed as a yearly rate.
- Appraisal
- An independent professional opinion of a property's market value prepared for the lender.
- Closing Disclosure
- The federally required document detailing the final terms and costs of your loan, provided before closing.
- Debt-to-Income Ratio
- Monthly debt obligations, including the proposed housing payment, divided by gross monthly income.
- Discount Points
- An optional upfront charge paid to reduce the interest rate on a loan.
- Escrow Account
- An account held by the servicer to collect and pay property taxes and insurance on your behalf.
- Loan Estimate
- The standardized disclosure of estimated loan terms and costs provided after a complete application.
- Loan-to-Value (LTV)
- The loan amount divided by the property value, expressed as a percentage.
- Mortgage Insurance
- Insurance that protects the lender against loss, generally required when the down payment is below a program threshold.
- Origination Fee
- A charge for processing and originating the loan.
- Rate Lock
- An agreement fixing an interest rate for a defined period before closing.
- Underwriting
- The lender's formal evaluation of credit, income, assets and property against program guidelines.
Start With a Conversation, Not an Application.
Tell Jim what you are trying to accomplish. He will help you understand the numbers, compare your options and determine the right next step.