Mortgage Glossary

Costs & Fees

Amortization

The schedule that pays a loan to zero over time through principal and interest payments.

Property & Valuation

Appraisal

An independent valuation report used to support the lender’s collateral decision.

Loan Types

Bank Statement Loan

A mortgage that qualifies self-employed borrowers using bank deposits instead of tax returns.

Costs & Fees

Closing Costs

Fees and prepaid items due at closing beyond the purchase price or loan amount.

Loan Types

Conforming Loan

A loan that meets agency size and guideline limits for delivery to secondary markets.

Credit & Qualification

Debt-to-Income Ratio (DTI)

Monthly debt payments divided by gross monthly income used in underwriting.

Loan Types

DSCR (Debt Service Coverage Ratio)

A ratio used to qualify investment property loans from rental income.

Credit & Qualification

Loan-to-Value (LTV)

Loan amount divided by appraised value or purchase price, expressed as a percentage.

Loan Types

Non-QM

Non-qualified mortgage programs that use alternative documentation methods.

Insurance

Private Mortgage Insurance (PMI)

Insurance that protects the lender on conventional loans with lower down payments.