Glossary
- Adjustable-rate mortgage: A loan with an interest rate that may change after an initial period.
- Appraisal: An opinion of property value prepared as part of a loan review.
- Borrower: A person applying for or responsible for a loan.
- Cash-out refinance: A refinance that may allow eligible equity to be accessed.
- Closing costs: Fees and charges connected to completing a loan transaction.
- Credit score: A number lenders may use when reviewing credit history.
- Debt-service coverage ratio: A comparison of rental income to property debt payments.
- Down payment: Money paid toward the purchase price at closing.
- Escrow: A process or account used to hold funds or documents during a transaction.
- Fixed-rate mortgage: A loan with an interest rate that does not change during the loan term.
- Foreign national borrower: A borrower whose residency or citizenship status may require specialized review.
- HELOC: A home equity line of credit.
- Investment property: A property purchased or owned for rental or investment use.
- ITIN borrower: A borrower using an Individual Taxpayer Identification Number.
- Loan-to-value: A comparison of loan amount to property value.
- Non-QM: A mortgage program outside standard conventional qualification rules.
- Occupancy: How the property is used, such as primary residence or investment property.
- Pre-approval: A preliminary review that is not a final loan approval.
- Primary residence: A home the borrower intends to live in as the main home.
- Refinance: Replacing or restructuring an existing mortgage.
- Self-employed borrower: A borrower who owns a business or earns income outside a traditional paycheck.
- Underwriting: The lender review of borrower, property, and loan information.
