Common home buying terms and what they mean

When buying a home, it’s not unusual to come across a term you don’t understand. This glossary provides a list of terms you’ll likely hear as you look for a new home.

  • Additional Principal Payment
  • Adjustable-Rate Mortgage (ARM) - See also Hybrid ARM
  • Adjustment Date
  • Adjustment Period
  • Affordability Analysis
  • Amortization
  • Amortization Term
  • Annual Percentage Rate (APR)
  • Appraisal
  • Appraised Value
  • Asset
  • Assignment
  • Assumability
  • Assumption Fee
  • Balance Sheet
  • Balloon Mortgage
  • Balloon Payment
  • Before-tax Income
  • Biweekly Payment Mortgage
  • Bridge Loan
  • Buydown
  • Cap
  • Certificate of Eligibility
  • Certificate of Reasonable Value (CRV)
  • Change Frequency
  • Closing
  • Closing Costs
  • Consumer Reporting Agency (or Bureau)
  • Credit Report
  • Credit Risk Score
  • Default
  • Delinquency
  • Deposit
  • Discount
  • Down Payment
  • Earnest Money
  • Effective Gross Income
  • Equity
  • Escrow
  • Escrow Disbursements
  • Escrow Payment
  • Fannie Mae
  • FHA Mortgage
  • FICO Score
  • First Mortgage
  • Fixed Installment
  • Fixed-Rate Mortgage (FRM)
  • Fully Amortized ARM
  • GNMA
  • Housing Expense Ratio
  • HUD-1 statement
  • Hybrid Adjustable Rate Mortgage
  • Index
  • Installment
  • Insured Mortgage
  • Interest
  • Interest Accrual Rate
  • Interest Rate Ceiling
  • Interest Rate Floor
  • Late Charge
  • Liabilities
  • Lifetime Payment Cap
  • Lifetime Rate Cap
  • Line of Credit
  • Liquid Asset
  • Loan
  • Loan-to-Value (LTV) Percentage
  • Lock-In Period
  • Margin
  • Maturity
  • Monthly Fixed Installment
  • Mortgage
  • Mortgage Insurance
  • Mortgage Insurance Premium (MIP)
  • Mortgage Life Insurance
  • Mortgagor
  • Net Worth
  • Non-liquid Asset
  • Note
  • Origination Fee
  • Owner Financing
  • Payment Change Date
  • Periodic Payment Cap
  • Periodic Rate Cap
  • PITI Reserves
  • Points
  • Pre-Approval
  • Prepayment Penalty
  • Principal
  • Principal Balance
  • Principal, Interest, Taxes, and Insurance (PITI)
  • Private Mortgage Insurance (PMI)
  • Qualifying Ratios
  • Rate Lock
  • Real Estate Settlement Procedures Act (RESPA)
  • Recording
  • Refinance
  • Revolving Liability
  • Secondary Mortgage Market
  • Security
  • Servicer
  • Standard Payment Calculation
  • Step-Rate Mortgage
  • Third-party Origination
  • Total Expense Ratio
  • Treasury Index
  • Truth-in-Lending Law
  • Underwriting
  • VA Mortgage

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