Mortgage Basics
This is the upfront percentage of a home’s price that buyers typically pay out‑of‑pocket.
What is a down payment?
This three‑letter acronym is the rate at which the Federal Reserve influences, affecting mortgage rates indirectly.
What is the FFR (Federal Funds Rate)?
This early step tells you how much a lender is willing to let you borrow.
What is pre‑approval?
These recurring payments include property taxes and homeowners' insurance.
What is escrow?
This term refers to the amount of money you borrow from a lender to buy a home.
What is the principal?
This type of mortgage has a rate that can change over time.
What is an adjustable‑rate mortgage?
This final step in the home‑buying process involves signing documents and transferring ownership.
What is closing?
These fees, usually 2–5% of the home price, are paid at closing.
What are closing costs?
This type of mortgage keeps the same interest rate for the entire loan term.
What is a fixed‑rate mortgage?
This number, ranging from 300 to 850, heavily influences the rate you receive.
What is a credit score?
Lenders verify your income, assets, and debts during this stage.
What is underwriting?
This inspection checks the condition of the home before purchase.
What is a home inspection?
This government‑backed loan is popular with first‑time buyers because it allows low down payments.
What is an FHA loan?
This is the term for paying extra upfront to reduce your interest rate.
What are discount points?
This document estimates your loan terms, interest rate, and closing costs.
What is a Loan Estimate?
This optional report determines the home’s market value for the lender.
What is an appraisal?
This is the fee lenders charge to process and create your mortgage.
What are origination fees?
This economic factor, the general rise in prices, often pushes mortgage rates higher.
What is inflation?
This required insurance protects the lender when your down payment is under 20%.
What is PMI (Private Mortgage Insurance)?
This fee is paid to legally transfer the title to the property.
What is a title transfer fee?