APR
Annual percentage rate reflects interest and certain finance charges as an annualized percentage. It differs from the note interest rate.
The mortgage vocabulary, translated.
Useful terms for your next conversation.
Closing costs
Expenses associated with completing a loan, such as lender, title and other eligible charges. Actual costs depend on the transaction.
DTI
Debt-to-income ratio compares qualifying monthly debt payments with qualifying gross monthly income.
Equity
The difference between a property’s value and debt secured by it.
Escrow
An account used to collect and pay certain property-related expenses, commonly taxes and insurance.
Loan Estimate
A standardized disclosure of estimated loan terms, payments and costs.
LTV
Loan-to-value ratio compares the loan amount with the property value used by the lender.
Mortgage insurance
Coverage that protects the lender under applicable program requirements; costs and cancellation rules vary.
Points
Upfront charges expressed as a percentage of the loan amount. Discuss the payment and break-even tradeoffs.
Rate lock
An agreement with a lender to hold specified pricing for a defined period under its conditions.