Amortization

The process of gradually paying off a mortgage through scheduled payments over a set period.

Appraisal

An estimate of a property's market value conducted by a professional appraiser.

Balloon Payment

A large lump-sum payment due at the end of a loan term.

Bridge Loan

A short-term loan used to cover financial gaps when buying a new home before selling the old one.

Closing Costs

Fees associated with finalizing a mortgage, including legal fees, title insurance, and appraisal costs.

Conventional Mortgage

A mortgage where the borrower makes a down payment of at least 20%, avoiding the need for mortgage default insurance.

Debt-to-Income Ratio (DTI)

A measure comparing a borrower's monthly debt payments to their gross income.

Down Payment

The upfront amount paid towards a home's purchase price, typically a percentage of the total.

Equity

The difference between a home's market value and the outstanding mortgage balance.

Fixed-Rate Mortgage

A loan with a constant interest rate throughout the mortgage term.

Foreclosure

A legal process where a lender takes possession of a property due to missed mortgage payments.

Insurable Mortgage

A mortgage with a down payment of 20% or more that meets certain criteria, allowing the lender to insure it.

Insured Mortgage

A mortgage where the borrower makes a down payment of less than 20%, requiring mortgage default insurance.

Interest Rate

The percentage charged by a lender for borrowing money.

Loan-to-Value Ratio (LTV)

A ratio comparing the mortgage amount to the property's appraised value.

Mortgage Insurance

Insurance that protects the lender in case of borrower default, often required for low-down-payment loans.

Pre-Approval

A lender's conditional commitment to provide a mortgage based on a borrower's financial information.

Uninsured Mortgage

A mortgage with a down payment of at least 20% that doesn't require mortgage default insurance, often used for properties over $1 million or rental properties.

Variable-Rate Mortgage

A mortgage with an interest rate that fluctuates based on market conditions.