Loan Basics
This is the minimum credit score most conventional loans require.
620
This is the term for the initial cost a borrower pays to secure a lower interest rate on their mortgage.
discount points
This government-backed loan program is available exclusively to military service members and veterans.
VA Loan
The standard down payment required for a conventional loan to avoid PMI.
20% down
Buyers should always do this before starting their home search to avoid wasting time on homes they can’t afford.
get pre-approved
This type of loan is backed by the federal government and is popular among first-time homebuyers.
FHA loan
This clause in a mortgage allows the lender to demand full repayment if the borrower misses payments.
acceleration clause
This loan program offers 100% financing, requiring no down payment, for eligible rural and suburban homebuyers.
USDA loan
This is the minimum down payment required for an FHA loan.
3.5%
Buyers should avoid making large cash deposits into their bank accounts before closing because lenders require this for all funds.
paper trail or source funds
This document shows a borrower’s estimated loan terms, projected payments, and closing costs.
Loan Estimate
This type of mortgage allows the interest rate to change over time.
adjustable rate mortgage
This type of conventional loan exceeds the conforming loan limits set by Fannie Mae and Freddie Mac.
jumbo loan
VA loans have this advantage over conventional loans regarding down payments.
no down payment required
Lenders pull this report to assess a borrower’s financial history.
Credit Report
The term for the ratio of a borrower’s monthly debt payments compared to their gross monthly income.
debt to income
The process of combining multiple debts into a single mortgage loan.
debt consolidation
The 203(k) loan program is offered by this government entity to finance home renovations.
FHA
This loan option allows homebuyers to put down as little as 3% on a conventional mortgage.
Home Ready or Home Possible
Buyers should avoid skipping this crucial step before closing, which can uncover potential issues with the home.
Home Inspection
This type of approval gives buyers an edge over pre-qualification by verifying income, assets, and credit upfront.
pre-approval
A clause in a mortgage contract that requires full repayment if the property is sold.
due on sale clause
This type of loan allows homeowners to borrow against their home’s equity, often in the form of a line of credit.
HELOC Home Equity Line of Credit
Buyers can use this type of financial assistance, often provided by state and local programs, to help cover down payments and closing costs.
Down payment assistance
Buyers should avoid maxing out their credit cards before closing because it can increase this key mortgage ratio.
debt to income ratio