Mortgage Glossary

Plain-English definitions of the mortgage terms you need to know — backed by official sources from the CFPB, HUD, and VA.

What Is PMI?

Private Mortgage Insurance — what it costs, when it's required, and when it cancels.

How mortgage payments are structured so early payments go mostly to interest, later to principal.

How escrow accounts collect and pay property taxes and insurance on your behalf.

An overview of all types — PMI, FHA MIP, USDA guarantee fee, and VA funding fee.

How lenders measure your monthly debt load against income, and the limits by loan type.

How LTV determines your PMI requirement, interest rate, and loan eligibility.

The key features, limits, and costs of FHA-insured mortgages backed by HUD.

Benefits, eligibility, and funding fee details for VA-guaranteed home loans.

Home Equity Lines of Credit — how draw and repayment periods work, and the risks.

How discount points buy down your rate, and how to calculate break-even.

Annual Percentage Rate — the true annual cost of borrowing, including interest and certain fees.

The upfront cash you pay toward a home purchase, and how it affects PMI and loan options.

Fees paid at the end of a real estate transaction, typically 2–5% of the loan amount.

Replacing your current mortgage with a new loan to change rate, term, payment, or cash out equity.

A mortgage that exceeds FHFA conforming loan limits and usually has stricter qualification rules.

A mortgage not backed by a government agency, including conforming and jumbo loans.

A government-backed rural development loan with no down payment for eligible homes and borrowers.

The annual cost of borrowing money, separate from APR and affected by credit, market rates, and loan terms.

Reamortizing your loan after a lump-sum principal payment to lower the monthly payment without refinancing.

A payment schedule using 26 half-payments per year, equivalent to 13 monthly payments.