Glossary Terms

A home loan where the interest rate remains fixed for an introductory period (e.g., 5, 7, or 10 years), then resets periodically based on benchmark financial indices.

The scheduled repayment of a mortgage through regular monthly installments structured so that each payment gradually reduces both interest charges and principal balance.

The total annual cost of borrowing expressed as a percentage, combining the base interest rate with mandatory lender fees, origination charges, and discount points.

An unbiased, independent evaluation conducted by a licensed appraiser to determine the fair market value of a property before final loan approval.

Liquid or semi-liquid funds remaining in a borrower’s bank or investment accounts after paying down payment and closing costs, measured in months of full mortgage payments.

The final liquid dollar amount a buyer must bring to closing, equal to the down payment plus closing costs minus earnest money and credits.

The status issued by an underwriter indicating that all loan conditions have been satisfied and final loan documents are ready for closing.

A standardized five-page federal disclosure document detailing the final loan terms, projected monthly payments, and itemized closing costs.

A traditional mortgage that meets standardized funding guidelines set by Fannie Mae and Freddie Mac, offering down payments as low as 3%.

The percentage of a borrower’s gross monthly income committed to paying recurring monthly debts, including the proposed housing payment.