Mortgage Basics
The initial amount a buyer pays upfront when purchasing a home.
What is a down payment?
This is a deposit made to show you're serious about a home purchase.
What is earnest money?
This official document summarizes the final loan terms and must be provided 3 days before closing.
What is the Closing Disclosure?
This document shows the maximum loan amount you're eligible for.
The professional estimate of a home's market value.
What is an appraisal?
A mortgage rate can be "locked" for this reason.
What is to protect against market rate increase?
This type of loan has a consistent rate for the entire term.
What is a fixed-rate mortgage?
This shows ownership and ensures the property is free of liens.
What is the title?
This document gives and estimate of loan terms, monthly payments, and closing costs.
What is a Loan Estimate?
You might pay this monthly if your down payment is less than 20%.
What is PMI (Private Mortgage Insurance)?
This protects the lender (and possibly the buyer) from title issues.
What is title insurance?
Lenders verify your income, assets, debts, and employment during this stage.
What is the underwriting process?
This 3-letter acronym refers to the percentage of your income that goes toward debt each month.
What is DTI (Debt-to-Income)?
An account that holds property taxes and homeowners insurance payments.
What is an escrow account?
You sign this document to officially agree to repay the mortgage loan.
What is the promissory note?