Clear words to move forward with greater confidence.

A loan option that may use one or more Forms 1099 to help document income for an independent contractor or self-employed person. The lender may ask for tax returns, bank statements, business records, or other documents. Requirements vary by program.

An ARM has an interest rate that may change after an initial period. The loan documents explain when it can change, how the new rate is calculated, and the limits on each change. If the rate rises, the payment may also rise.

Amortization is the gradual repayment of a loan through scheduled payments. Each payment may include principal and interest. Early in many loans, a larger part of the payment goes to interest.

APR is a yearly measure of the cost of credit. It includes the interest rate and certain loan charges, but not every possible cost. APR can help compare similar loan offers with the same amount and term.

An appraisal is an independent professional opinion of a property's value. It may include a property visit, a limited inspection, or another approved method. An appraisal is not a home inspection and does not guarantee the property's condition.

The appraised value is the value estimated by the appraiser. It may be different from the sale price, the owner's opinion, or the value used for property taxes. The lender uses it as part of the loan review.

This is how a lender confirms money in bank, investment, retirement, or other allowed accounts. The lender may use this information to review funds for the down payment, closing costs, and required reserves. The documents and time period needed vary.

A loan option that may use personal or business bank deposits to help evaluate income, often for self-employed borrowers. The lender reviews eligible deposits and may subtract business expenses. The number of statements and other requirements vary.

Short-term financing that may help cover the time between buying one property and selling or refinancing another. It may use available equity as part of the transaction. Rates, fees, payments, and risks vary, so the full terms should be reviewed carefully.

A mortgage broker helps connect a borrower with one or more lenders and assists with the loan process. The broker does not usually provide the loan funds. Compensation may be paid by the lender, the borrower, or as otherwise disclosed and permitted.

A refinance that replaces an existing mortgage with a new loan and may provide some cash from available home equity. The amount received is reduced by amounts paid off and transaction costs. Approval and maximum loan amount depend on the program and property value.

A status showing that the lender has completed major underwriting conditions and is preparing for closing. It is not the same as final funding. New information, document changes, or unmet closing conditions can still delay or affect the loan.

The final stage when required documents are signed and the transaction is completed according to the contract and applicable law. Money and ownership are transferred when all required conditions are met. The place, timing, and process can vary.

Costs connected with getting the loan and completing the property transaction. They may include lender charges, appraisal, title services, recording fees, taxes, insurance, and prepaid amounts. The total varies, and the Loan Estimate and Closing Disclosure provide details for covered loans.

A five-page form used for most closed-end consumer mortgages. It shows final loan terms, projected payments, and closing costs. The borrower generally must receive it at least three business days before the scheduled closing.

Recently sold properties that are similar to the property being valued. An appraiser may compare location, size, condition, features, and sale date. Adjustments may be made when the properties are not exactly alike.

A mortgage that is not insured or guaranteed by a federal government program such as FHA, VA, or USDA. Some conventional loans follow Fannie Mae or Freddie Mac guidelines; others do not. Credit, down payment, and other requirements vary.

A number calculated from information in a credit report. Lenders may use different scoring models and may consider more than one score. A score can affect loan options and pricing, but it does not guarantee approval or a specific rate.

The percentage of qualifying monthly income used for monthly debt payments. The lender calculates it using program rules and verified information. Acceptable limits vary by loan, lender, and borrower profile.

A legal document used in Maryland and many other states to secure a real estate loan. It creates a lien on the property and names trustees who may act as allowed by the document and state law if the loan is not paid. It is different from the deed that shows ownership.

Failure to meet an important loan obligation, such as making payments as agreed. A missed payment can make the loan past due; the loan documents and law explain when default occurs and what may happen next. Contact the loan servicer quickly if payment problems begin.

The part of the purchase price paid without using the first mortgage. It may come from the buyer's allowed funds or another permitted source. The minimum amount depends on the program, property, and borrower eligibility.

A program that may help eligible buyers with part of the down payment or certain closing costs. Assistance may be a grant, a forgivable loan, a deferred loan, or another loan that must be repaid. Availability, funding, occupancy rules, income limits, and repayment terms vary.

A loan often used for investment property. The lender compares the property's qualifying rental income with the debt payment or other expenses defined by the program. The formula, documents, minimum ratio, and personal credit requirements vary.

Money a buyer deposits after a seller accepts an offer, as required by the purchase contract. It is usually credited at closing. Whether it is refundable or may be lost depends on the contract, deadlines, contingencies, and applicable law.

The difference between a property's current value and the debts secured by it. Equity may rise when the debt is reduced or the property value increases. It can also fall if the property value decreases or secured debt increases.

An arrangement in which a neutral party holds money or documents until stated conditions are met. During a purchase, escrow may hold the earnest money or closing funds. The exact meaning depends on the stage of the transaction and local practice.

An account maintained by the loan servicer to collect money for items such as property taxes and homeowners insurance. The amount collected can change when bills or estimates change. A shortage or surplus may affect future payments.

A mortgage made by an approved lender and insured by the Federal Housing Administration. FHA guidelines may allow a lower down payment or more flexible credit review than some other programs. The borrower, property, and loan must meet FHA and lender requirements, and mortgage insurance generally applies.

A mortgage with an interest rate that does not change during the loan term. The scheduled principal-and-interest payment remains the same, but the total monthly payment may change because of taxes, insurance, mortgage insurance, or other items.

A temporary agreement with the loan servicer to pause or reduce payments during an eligible hardship. It does not erase the unpaid amount. The servicer explains how the missed amount will be handled and what options may be available afterward.

A loan option for certain people who are not U.S. citizens or permanent residents and want to finance U.S. property. Identification, visa or residency information, income, assets, credit, down payment, and property-use rules vary. An ITIN or Social Security number may be required by some programs.

Money given by an eligible donor for permitted loan expenses, such as a down payment or closing costs. The lender may require a gift letter and proof of where the money came from and how it was transferred. Donor and documentation rules vary by program.

An older mortgage cost form that was generally replaced by the Loan Estimate for most covered mortgages in 2015. It may still appear in limited types of transactions. Ask which disclosure applies to your loan.

Short-term private financing often used for certain investment or renovation projects. The property value may have a large role in the review, but credit, experience, income, assets, and the project may also be considered. These loans can have higher rates, fees, or shorter repayment periods than traditional mortgages.

A reusable line of credit secured by the home. The borrower may draw funds up to an approved limit during the draw period, subject to the agreement. Many HELOCs have variable rates, and failure to pay can put the home at risk.

Insurance that may cover the home, belongings, liability, or other losses listed in the policy. Coverage, limits, deductibles, and exclusions vary. A lender generally requires enough insurance while the property secures the loan.

The percentage used to calculate interest charged on the loan balance. It is not the same as APR. A lower interest rate does not always mean the lowest total cost because points, fees, loan term, and other features also matter.

A loan option that may accept an Individual Taxpayer Identification Number instead of a Social Security number. Approval, documents, down payment, credit review, and property rules vary. An ITIN is issued for federal tax purposes; it does not by itself change immigration status or authorize work.

A mortgage larger than the conforming loan limit that applies to the property and year. Limits can change each year and may be higher in certain areas. Because the loan does not meet standard conforming limits, credit, asset, income, reserve, and down payment requirements may be different.

The bank, credit union, mortgage company, or other authorized entity that approves and provides the loan funds. The lender sets program requirements within applicable law and may later transfer servicing or sell the loan.

A three-page form used for most covered mortgages. It shows estimated loan terms, projected payments, and closing costs. It is generally provided within three business days after the lender receives the six pieces of information that make up an application. It is not an approval or commitment to lend.

A percentage that compares the loan amount with the value used by the lender. For a purchase, that value is often the lower of the purchase price or appraised value, subject to program rules. LTV can affect eligibility, pricing, and mortgage insurance, but it does not determine them by itself.

A review in which an underwriter evaluates the file under the program's manual rules instead of relying only on an automated recommendation. It may require more documents or explanations. Manual review does not guarantee approval.

A loan secured by real property, often used to buy or refinance a home. The borrower promises to repay under the loan documents, and the property serves as collateral. If serious default is not resolved, the lender may enforce its rights through the legal foreclosure process.

Mortgage insurance charged on FHA-insured loans to protect the lender against certain losses. FHA loans generally include an upfront premium and an annual premium paid through monthly payments. The amount and how long it remains depend on FHA rules and the loan details.

A mortgage that does not meet the federal definition of a Qualified Mortgage. Some Non-QM programs use different ways to document income or evaluate a property. They are still subject to applicable laws, lender guidelines, verification, underwriting, and approval.

The interest rate stated in the promissory note. It is used to calculate scheduled principal-and-interest payments. It is different from APR, which also reflects certain loan costs.

A charge for services connected with making the loan. It may be a percentage of the loan or a fixed amount and should appear in the loan disclosures when applicable. Fees and how they are labeled vary.

A property the borrower intends to use as a primary residence. The borrower must give accurate information about occupancy. Rates, down payment, documents, and eligibility can differ from those for a second home or investment property.

A loan option that may use a business profit-and-loss statement to help evaluate self-employment income. The statement shows business income and expenses. The lender may require it to be prepared or reviewed by a qualified tax professional or CPA and may request other documents.

An upfront charge paid to obtain a particular interest rate. One point equals 1% of the loan amount, but one point does not always reduce the rate by the same amount. Whether points save money depends on the loan terms and how long the loan is kept.

A conditional evaluation based on information and documents reviewed at that time. It may state a possible loan amount or price range, but it is not a final approval or guarantee. Changes in credit, income, assets, debts, property, rates, or program rules can affect it.

An early estimate based mainly on information provided by the consumer, with limited or no verification. It can help start a conversation about possible options. It is not an approval, commitment, or guarantee of how much can be borrowed.

The amount borrowed or the unpaid loan balance, not including future interest. Part of a scheduled payment may reduce principal. Fees or other amounts may be handled separately under the loan documents.

Insurance that protects the lender on certain conventional loans, often when the borrower has a smaller down payment. It does not protect the borrower from foreclosure. Federal cancellation rights commonly use the home's original value and the scheduled loan balance; other requirements and exceptions may apply.

A written agreement that holds a stated interest rate and, sometimes, points for a limited period if its conditions are met. It may expire, require an extension fee, or change if important application or loan details change. Review the lock period and conditions in writing.

A new loan used to replace an existing mortgage or other property debt. A refinance may change the rate, term, payment, borrowers, or cash received, but a benefit is not guaranteed. Consider closing costs, the new loan balance, and long-term cost.

Financing that may include eligible repair or improvement costs in a purchase or refinance loan. Funds may be held and released as work is completed. Eligible projects, contractors, inspections, timelines, and property rules vary by program.

Eligible funds remaining after the money needed for closing is accounted for. Lenders may measure reserves as a number of months of housing payments. The amount and acceptable sources depend on the program and transaction.

A lien that is generally paid after the first mortgage if the property is sold or foreclosed. It may secure a home equity loan, HELOC, or certain assistance program. It can have its own payment, interest, fees, and repayment terms.

Income from owning a business, freelancing, or working as an independent contractor. The lender reviews documents allowed by the program to determine stable qualifying income. The time in business and documents required vary; tax deductions can affect the income used for qualification.

The legal rights of ownership in real property. A title search reviews public records for owners, liens, claims, or other issues. The deed is the document used to transfer ownership; title describes the ownership rights.

Insurance against certain covered title problems that existed before the policy date. A lender's policy protects the lender and is usually required; an owner's policy protects the owner and may be optional. Coverage, exclusions, and duration are stated in the policy.

The lender's review of the borrower's credit, income, assets, debts, documents, and the property under program rules. The underwriter may approve, deny, or request more information. Approval can remain subject to conditions until closing and funding are complete.

A mortgage made by a private lender and partially guaranteed by the U.S. Department of Veterans Affairs for eligible Veterans, service members, and certain surviving spouses. Some eligible borrowers may purchase with no down payment, but lender, credit, income, occupancy, property, entitlement, and VA requirements apply. A VA funding fee may apply, although some borrowers are exempt.

A lender that offers mortgage programs through approved mortgage brokers or correspondent companies instead of working directly with the consumer. The broker helps submit and manage the application. Wholesale pricing is not automatically lower than every retail option; compare the full terms and costs.