A type of mortgage with an interest rate that changes over time, often when the prime rate changes.

The act of calculating your mortgage payments given all the terms and factors in your specific case.

Annual percentage rate, which is the interest rate for the entire year on a loan or debt

A form of refinance where you get money back, or cash out. Usually occurs when you have equity in your home and can borrow more than you owe, refinancing the balance and receiving the overage as cash.

A type of private mortgage loan that follows conventional terms, which typically require a good or better credit score and some type of down payment.

The amount of cash payment you put down when you buy a home; it’s a portion of the home price that you do not finance. Some mortgage loans and lenders require a down payment and often can’t use funds you borrowed from another source for this purpose, so it’s important to save before you shop for a home.

A portion of your mortgage payments that the lender puts aside and holds in trust to pay property tax, homeowners insurance and other expenses.

Loans that are backed, all or in part, by the Federal Housing Authority. People who can’t qualify for conventional loans can often qualify for FHA loans as the credit requirements are less strict and you don’t have to have as large a down payment.

A mortgage where the interest rate is fixed and stays the same over the entire term of the loan.

The difference between how much your home is worth and how much you owe on it. If the number is positive, you have equity in your home. For example, if a home is worth $100,000 and you only owe $80,000, you have equity in the amount of around $20,000.

A loan you take out to remodel or otherwise improve your home. If you have equity in your home, you may be able to use it as security for a home improvement loan.

How much you’re being charged for a debt or loan, usually expressed as a percentage.

A maximum amount that can be charged on an adjustable or variable mortgage loan. Usually, this is detailed in the terms of the loan.

With regard to a mortgage or other loan, the maturity date is the date by which the entire loan should be paid off or any remaining amount might come immediately due.

A loan specifically used to fund the purchase of a home or other piece of property.

Interest rates specifically associated with loans to buy a home.

The length of time someone will take to pay back a mortgage loan. Common terms are 15 and 30 years.

Payment options for an adjustable rate mortgage. Typically includes paying interest only, payment a minimum amount, or paying both principal and interest.

The ability to reduce the interest you pay on a mortgage slightly by paying an upfront fee.

A contingent approval for a certain amount of money as long as a full credit check and other factors, including home valuation and underwriting, checks out.

A process by which a lender does a soft credit check to prequalify you as a good candidate for various offers.

How much you owe on the home or loan not including any interest. Typically, this is close to the total amount you owe or what your payoff on the home would be at any given time.

A payment completely toward the principal on the loan or the amount of your payment that is put toward the principal amount. Usually, the mortgage payments you make are split between interest, principal and escrow.

Also known as PMI. This is a requirement that you carry homeowners insurance and that it’s paid for through your mortgage, which increases the monthly amount you pay. PMI is usually required unless you make a 20% or higher down payment or have 22% or more equity in your home.

Usually refers to the APR or interest rate on a mortgage loan. Ex. “Can I get a good rate on my mortgage?”

A temporary freeze on the interest rate being offered. A mortgage lender may approve you at a certain APR, for example, and lock that offer in for 30 days while you shop for or work to close on a home.

Borrowing via a new loan to pay off the existing mortgage. This is typically done to reduce the monthly payment or get a better interest rate to save money.

The beginning or opening rate you pay at the start of an adjustable rate mortgage.

The legal document showing who has current ownership of a property. The bank or lender has it until you pay off the mortgage, and then, it transfers to you.

A third party that ensures the seller of a home has a legal right to sell it and transfer the title to someone else.

Misrepresenting legal ownership of a title with the intent of defrauding someone of money.

Insurance that protects the owner of a home from title fraud, whether they own the home outright or are still paying a mortgage.

The act of searching for any other owners or liens against a title to ensure it is in the free and clear before a home purchase is finalized.

The process of evaluating how much risk a borrower represents so a lender can make an informed approval and offer. Underwriting decides whether someone will be approved for a loan and what rate may be appropriate.

Loans backed fully or in part by the Veteran’s Administration. They are limited to qualifying vets and family members and can make buying a home easier for some people.