Resources

Glossary

The language of home buying, in plain terms. Search for any word to jump straight to what it means.

Amortization: The process of paying off a loan over time through regular payments, with each payment covering both interest and a portion of the principal balance.
Closing Costs: Fees and expenses paid at the time a home purchase is finalized, separate from the down payment.
Credit-Invisible: A term used to describe someone with little or no credit history on file with the major credit bureaus, even if they manage money responsibly.
Debt-to-Income Ratio (DTI): A comparison of your total monthly debt payments to your gross monthly income, used by lenders to gauge your ability to take on a new payment.
Down Payment: The portion of a home's purchase price paid upfront in cash, with the remaining balance financed over time.
Equity: The difference between what your home is worth and what you still owe on it — your ownership stake in the property.
Escrow: An account held by a third party where funds — often for taxes or insurance — are collected and paid out on a homeowner's behalf.
ITIN: An Individual Taxpayer Identification Number, issued by the IRS to individuals who are required to file taxes but aren't eligible for a Social Security Number.
Origination Fee: A fee charged by a lender for processing and setting up a new loan, typically calculated as a percentage of the loan amount.
Owner Financing: An arrangement where the seller of a home finances the purchase directly for the buyer, instead of the buyer obtaining a loan through a traditional bank.
Pre-Qualification: An early, informal estimate of what a buyer may be able to afford, based on a quick review of income and financial information.
Principal: The original amount of money borrowed on a loan, not including interest.
Principal & Interest (P&I): The two components of a standard loan payment — the portion that reduces your balance (principal) and the portion that is the cost of borrowing (interest).
Refinance: Replacing an existing loan with a new one, often to secure better terms or move from owner financing into a traditional mortgage.
Title: The legal document establishing ownership of a property.

Resources

Glossary

The language of home buying, in plain terms. Search for any word to jump straight to what it means.

Amortization: The process of paying off a loan over time through regular payments, with each payment covering both interest and a portion of the principal balance.
Closing Costs: Fees and expenses paid at the time a home purchase is finalized, separate from the down payment.
Credit-Invisible: A term used to describe someone with little or no credit history on file with the major credit bureaus, even if they manage money responsibly.
Debt-to-Income Ratio (DTI): A comparison of your total monthly debt payments to your gross monthly income, used by lenders to gauge your ability to take on a new payment.
Down Payment: The portion of a home's purchase price paid upfront in cash, with the remaining balance financed over time.
Equity: The difference between what your home is worth and what you still owe on it — your ownership stake in the property.
Escrow: An account held by a third party where funds — often for taxes or insurance — are collected and paid out on a homeowner's behalf.
ITIN: An Individual Taxpayer Identification Number, issued by the IRS to individuals who are required to file taxes but aren't eligible for a Social Security Number.
Origination Fee: A fee charged by a lender for processing and setting up a new loan, typically calculated as a percentage of the loan amount.
Owner Financing: An arrangement where the seller of a home finances the purchase directly for the buyer, instead of the buyer obtaining a loan through a traditional bank.
Pre-Qualification: An early, informal estimate of what a buyer may be able to afford, based on a quick review of income and financial information.
Principal: The original amount of money borrowed on a loan, not including interest.
Principal & Interest (P&I): The two components of a standard loan payment — the portion that reduces your balance (principal) and the portion that is the cost of borrowing (interest).
Refinance: Replacing an existing loan with a new one, often to secure better terms or move from owner financing into a traditional mortgage.
Title: The legal document establishing ownership of a property.