Mortgage Terms To Know

Mortgage Terms to Know

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Here's a handy guide for you.

Mortgage terms can be confusing? Terms such as Fixed Rate and Adjustable Rate seem to have opposite meanings? This glossary explains mortgage terms in an easy-to-understand way.

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Total of Payments

This number tells you the total amount of money you will have paid over the life of your mortgage. “Mortgage Key Terms.” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/consumer-tools/mortgages/answers/key-terms/. … Read more

TRID

“TRID” is an acronym that some people use to refer to the TILA RESPA Integrated Disclosure rule. “Mortgage Key Terms.” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/consumer-tools/mortgages/answers/key-terms/. Accessed 21 … Read more

USDA Loan

The Rural Housing Service, part of the U.S. Department of Agriculture (USDA) offers mortgage programs with no down payment and generally favorable interest rates to … Read more

VA Loan

A VA loan is a loan program offered by the Department of Veterans Affairs (VA) to help servicemembers, veterans, and eligible surviving spouses buy homes.  … Read more

PMI

Private Mortgage Insurance (PMI) is a type of mortgage insurance that benefits your lender.  You might be required to pay for PMI if your down … Read more

Prepaid Interest Charges

Prepaid interest charges are charges due at closing for any daily interest that accrues on your loan between the date you close on your mortgage … Read more

Principal

The principal is the amount of a mortgage loan that you have to pay back. Your monthly payment includes a portion of that principal. When … Read more

Property Taxes

Property taxes are taxes charged by local jurisdictions, typically at the county level, based upon the value of the property being taxed. Often, property taxes … Read more

Right of Rescission

The right of rescission refers to the right of a consumer to cancel certain types of loans. If you are buying a home with a … Read more

Origination Fee

An origination fee is what the lender charges the borrower for making the mortgage loan.  The origination fee may include processing the application, underwriting and … Read more

Owner’s Title Insurance

Owner’s title insurance provides protection to the homeowner if someone sues and says they have a claim against the home from before the homeowner purchased … Read more

Payoff Amount

Your payoff amount is how much you will actually have to pay to satisfy the terms of your mortgage loan and completely pay off your … Read more

PITI

Principal, Interest, Taxes, and Insurance, known as PITI, are the four basic elements of a monthly mortgage payment.  “Mortgage Key Terms.” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/consumer-tools/mortgages/answers/key-terms/. Accessed … Read more

Annual Income

Annual income is a factor in a mortgage loan application and generally refers to your total earned, pre-tax income over a year. Annual income may … Read more

Amount Financed

It means the amount of money you are borrowing from the lender, minus most of the upfront fees the lender is charging you.  “Mortgage Key … Read more

Amortization

Amortization means paying off a loan with regular payments over time so that the amount you owe decreases with each payment. Most home loans amortize, … Read more

Adjustable-Rate Mortgage (ARM)

An adjustable-rate mortgage (ARM) is a type of loan for which the interest rate can change, usually in relation to an index interest rate. Your … Read more

Ability to Repay Rule

The ability-to-repay rule is the reasonable and good faith determination most mortgage lenders are required to make that you are able to pay back the loan. … Read more

5/1 Adjustable-Rate Mortgage

A 5/1 adjustable-rate mortgage (ARM) or 5-year ARM is a mortgage loan where “5” is the number of years your initial interest rate will stay … Read more