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Glossary of Mortgage Terms Every Borrower Should Know

Buying a home or refinancing? Understanding key mortgage terms is essential to making informed financial decisions. This glossary breaks down the most important mortgage loan terms so you can move forward with clarity and confidence.

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We believe in clear communication by explaining the terms others gloss over.

Common Mortgage Terms You Should Know

Mortgage Terms Made Simple

This page serves as a go-to resource for borrowers looking to better understand mortgage terms used throughout the loan process. Whether you’re comparing rates, reviewing disclosures, or closing on a property, knowing these mortgage loan terms will help you feel more confident every step of the way.

The process of paying off a loan over time through regular monthly payments. Each payment goes toward both the interest and the principal.

Annual Percentage Rate (APR)

The total cost of your loan on an annual basis, including interest and certain fees. It’s designed to help you compare loan offers.

A professional estimate of a property's market value, typically required by a lender during the mortgage process.

Fees and expenses (beyond the down payment) paid to finalize a mortgage — including title fees, appraisal costs, and more.

The initial cash you pay upfront when buying a home, typically expressed as a percentage of the purchase price.

An account used to hold funds for property taxes and homeowners insurance, which your lender pays on your behalf.

The portion of your home that you own outright — calculated as your home’s value minus what you still owe on your mortgage.

A government-backed mortgage loan designed to help buyers with lower credit scores or smaller down payments.

Fixed-Rate Mortgage

A mortgage with a stable interest rate and monthly payment over the life of the loan.

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