APPRAISAL
An evaluation of a property’s value conducted by a licensed appraiser.
 

CLOSING DISCLOSURE (SETTLEMENT STATEMENT)
A detailed list of all costs and fees paid at closing.
 

DEBT-TO-INCOME (DTI) RATIO
A measure of your monthly debt payments compared to your gross monthly income.
 

DOWN PAYMENT
The upfront amount you pay toward the home.
 

EARNEST MONEY
Payment to show a seller you’re serious about financing. Typically 1% - 5% of the sales price and is applied to your down payment.
 

ESCROW
An account used to pay taxes and insurance.
 

INTEREST
The cost of borrowing money.
 

LOAN ESTIMATE
A standardized form that outlines key terms, estimated costs and fees of your mortgage loan.
 

LOAN TERM
The length of time to repay the loan.
 

ORIGINATION FEE
A charge for processing a new loan application.
 

PREPAYMENT PENALTY
Fees charged if you pay off your loan early.
 

PRIVATE MORTGAGE INSURANCE (PMI)
Insurance required if your down payment is less than 20% of the loan amount.
 

RATE LOCK
A guarantee to hold a certain interest rate for a set period.
 

TITLE INSURANCE
Protects against financial loss from defects in the property title.