The road to a new home is paved with paperwork and plenty of head‑spinning words. Understanding these key terms before you sit down with a lender helps every conversation feel clearer and every signature more confident.
The percentage of the home’s price you finance. A lower LTV—thanks to a larger down payment—often earns better rates.
APR combines the interest rate with certain fees, giving a more complete view of borrowing cost. Comparing APRs, not just rates, keeps you focused on true expenses.
Optional fees can be paid at closing to reduce your interest rate. One "point" is equal to one percent of the loan amount. Paying points is a good option if you plan to stay in the home long enough to recover the cost through lower monthly payments.
An account your lender maintains to pay property taxes and homeowners' insurance on your behalf. Including these costs in each payment avoids large lump‑sum surprises.
Insurance that protects the lender when your down payment is below 20 %. Once you reach a set equity level, you can request removal.
The schedule shows how each payment splits between interest and principal over time. Early payments lean heavier on interest; later payments chip away faster at the balance.
Fees for appraisal, title search, recording and more, typically 2–5 % of the purchase price. We offer worksheets that outline expected costs in your area.
Knowing these terms turns the home‑buying process from daunting to doable. Keep this list handy, and remember our lending specialists are just a call away if any phrase needs a second look. Clear language today sets the stage for confident keys‑in‑hand tomorrow.
