Mortgage jargon, translated

Your interest rate plus most loan costs, expressed as a yearly rate — the number built for comparing offers apples-to-apples. It’s always a bit higher than the plain interest rate because it includes fees.

The one-time costs of getting the loan and transferring the home — lender fees, title work, appraisal, prepaid taxes and insurance. Typically 2–4% of the price, and there are strategies to reduce what comes out of your pocket.

The part of the price you pay upfront. Despite the folklore, it can be 3–3.5% on many programs and $0 on VA and USDA loans. 20% only matters for skipping PMI.

A holding account your servicer runs for you: part of each payment goes in, and your property taxes and insurance get paid from it automatically. You never chase those bills.

A monthly fee on conventional loans with less than 20% down. It protects the lender, not you — but it’s what makes low-down-payment buying possible, and it drops off as you build equity.

Optional upfront interest you can pay to lower your rate. One point = 1% of the loan. Sometimes brilliant, sometimes a waste — depends how long you’ll keep the loan.

A number summarizing your borrowing history. Mortgage programs commonly start around 620 (FHA can go lower). Higher scores mean better pricing — but perfect is not required.

Your monthly debt payments divided by your gross monthly income. It’s the main "how much house can I afford" math lenders run — and it’s why paying off one specific account can change everything.

A real review of your credit, income and assets producing a letter that says "this buyer can close." Sellers take it seriously. It’s the single highest-value early step.

A quick, informal estimate based on what you tell a lender — no document verification. Fine as a first conversation; not what wins offers. That’s pre-approval.

Money left after closing — measured in months of payments. Not always required, but they strengthen a file and they’re just good sense.

Down payment money given by family. Completely allowed on most programs with a simple gift letter. Alex walks you and your generous relative through the paperwork.

An independent professional’s opinion of the home’s value, ordered during the loan. It protects you from overpaying and the lender from over-lending.

Underwriting’s final green light: every condition met, nothing left but scheduling the signing. The best three words in the process.

The final, official statement of your exact numbers — rate, payment, cash to close. You get it at least three business days before signing, by law, so nothing can surprise you at the table.

Freezing your interest rate for a set window (often 30–60 days) so market moves can’t change your deal while your loan closes.

The legal proof the seller can actually sell, plus insurance protecting your ownership against surprises from the property’s past. Boring, essential, handled for you.

The verification stage where the lender’s analysts confirm everything in your file. Requests for "one more document" are normal, not alarming.