Every industry has a private vocabulary, and ours is worse than most. Here is what the words on your paperwork mean, without the circular definitions.
If a term is missing, call and ask. We will explain it and then add it here.
The schedule that splits every payment between interest and principal. Early on most of your payment is interest. That flips over time, and by the end almost all of it is principal.
The interest rate plus the lender costs of the loan, expressed as one yearly number. It is always a little higher than the note rate, and it is the number to use when comparing two offers.
An independent opinion of what the property is worth, ordered by the lender. It protects you as much as it protects them, because nobody wins when you overpay.
Everything owed at the closing table beyond the down payment. Title, recording, appraisal, prepaid taxes and insurance, and lender fees. Sellers can sometimes contribute toward them.
A loan that is not government backed and follows Fannie Mae and Freddie Mac guidelines. The most common loan type in the country.
Your monthly debts divided by your gross monthly income. It is the single number that most determines what you qualify for, and it is often improvable in ways people do not expect.
Money paid up front to buy the interest rate down. One point is one percent of the loan amount. Worth it only if you stay long enough to earn the cost back.
A deposit you put down with an offer to show you are serious. It is credited toward your costs at closing, not an extra charge.
What the property is worth minus what you still owe on it. It grows two ways, by paying the loan down and by the property going up.
An account the servicer holds to pay your property taxes and insurance for you, funded by a piece of every monthly payment. It is also the word for the neutral third party who holds funds during a transaction.
A standardized three page form you receive within three business days of applying. It lays out your rate, payment and costs in a format designed to be compared side by side with any other lender's.
The loan amount as a percentage of the property value. Eighty percent LTV means twenty percent equity, which is where mortgage insurance typically comes off.
A premium that protects the lender when the down payment is under twenty percent. On conventional loans it falls off once you reach enough equity. On FHA loans the rules are different and worth asking about.
A fee some lenders charge to process the loan. Reliant Mortgage charges zero.
A written commitment based on documentation the lender has reviewed. It carries real weight with a listing agent, which is why we issue a certificate rather than a verbal maybe.
The amount you borrowed, separate from the interest charged on it.
An agreement that holds your interest rate for a set number of days while the loan is processed, so market movement during that window does not affect you.
Coverage against somebody later claiming an ownership interest in your property. A one time cost that protects you for as long as you own the home.
The review that decides whether the loan is approved. At Reliant this happens in house, which is why files move faster here.
As many times as you want. That is the job.
