A

Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that can change periodically after an initial fixed period, based on a market index.
Amortization
The process of paying off a loan through regular payments, each of which covers part interest and part principal, over a set term.
Annual Percentage Rate (APR)
A broader measure of borrowing cost than the interest rate alone, generally including certain fees, expressed as a yearly percentage.
Appraisal
A licensed professional's estimate of a property's market value, typically required by a lender before final loan approval.
Appraisal Contingency
A contract condition giving the buyer options (such as renegotiating or exiting the contract) if the home appraises below the agreed purchase price.
Assessed Value
A local government's official valuation of a property, used to calculate property taxes — often different from the purchase price or current market value.

B

Bylaws
The rules that govern how an HOA or co-op board operates internally — meetings, elections, and voting procedures — as distinct from the community living rules in the CC&Rs.

C

CC&Rs (Covenants, Conditions & Restrictions)
The recorded legal document that sets the rules for a community or building, covering things like exterior appearance, pets, rentals, and parking. It generally runs with the property, not the person.
Clear to Close
A lender's confirmation that all conditions on a loan have been satisfied and it is fully ready to close — generally the final checkpoint after underwriting and conditional approval.
Closing
The final step in a real estate transaction, when documents are signed, funds are transferred, and ownership officially changes hands.
Closing Costs
Fees and prepaid items due at closing, separate from the down payment, covering lender, third-party, and government charges.
Closing Disclosure
A standardized form showing final loan terms and costs, typically provided at least a few days before closing for many loan types.
Co-op (Housing Cooperative)
An ownership structure where a buyer purchases shares in a corporation that owns the building, rather than owning the unit itself outright, with rules often set by a board.
Comparable Sales (Comps)
Recently sold, similar properties used as reference points when estimating a home's market value.
Conditional Approval
A stage where a loan is approved subject to specific remaining items an underwriter still needs — such as a document or clarification — before it can move to clear to close.
Condominium (Condo)
A form of ownership where you own your individual unit outright and share ownership of common areas with other unit owners, typically through an HOA.
Contingency
A condition in a purchase contract that must be satisfied for the sale to proceed, such as a financing or inspection contingency.
Conventional Loan
A mortgage not insured or guaranteed by a government agency, as opposed to FHA, VA, or USDA loans.
Credit Report
A record of a person's credit history, used by lenders to help evaluate creditworthiness.
Credit Score
A numeric summary derived from a credit report, used by lenders as one factor in loan decisions.

D

Debt-to-Income Ratio (DTI)
A comparison of monthly debt payments to monthly gross income, commonly used as a reference point in affordability discussions.
Down Payment
The portion of a home's purchase price paid upfront in cash, rather than financed through a mortgage.

E

Earnest Money
A deposit made with an offer to show good faith, typically held in escrow and credited toward closing costs or the down payment if the sale proceeds.
Equity
The difference between a home's market value and the remaining balance owed on any loans secured by it.
Escrow
A neutral third-party arrangement that holds funds or documents until agreed-upon conditions are met; also refers to an account that collects funds for taxes and insurance.
Estoppel Certificate
A statement from an HOA or co-op board confirming a unit's dues status, any pending special assessments, and known violations — commonly requested before closing.

F

FHA Loan
A mortgage insured by the Federal Housing Administration, often associated with lower minimum down payment and credit requirements than some conventional loans.
Fixed-Rate Mortgage
A mortgage with an interest rate that stays the same for the entire loan term.
Flood Zone (FEMA Flood Map)
A designated area on federal flood hazard maps indicating relative flood risk, which can affect whether flood insurance is required.

G

Gift Letter
A signed statement confirming that down payment funds from a family member or other source are a gift, not a loan to be repaid.

H

Home Warranty
An optional service contract that covers repair or replacement of certain home systems and appliances for a set period, separate from a manufacturer's warranty on a specific product.
Homeowners Association (HOA)
An organization that manages shared community rules and amenities, typically funded by mandatory dues from property owners in the community.
Homeowners Insurance
A policy that covers a home and its contents against certain risks, often required by lenders as a condition of a mortgage.
Homestead Exemption
A local program in some states or counties that can reduce the taxable value of a home you live in as your primary residence — eligibility and savings vary widely and are set locally.

I

Impound Account
Another name for a mortgage escrow account — see Escrow.

L

Lender's Title Policy
Title insurance that protects the lender's financial interest in a property, typically required as a condition of the loan.
Loan Estimate
A standardized form lenders typically provide shortly after application, outlining estimated loan terms and costs.
Loan-to-Value Ratio (LTV)
The loan amount divided by the appraised value (or purchase price, if lower) of a property, often expressed as a percentage.

M

Mortgage Insurance
Insurance that protects the lender (not the borrower) against loss if a loan isn't repaid; often required when the down payment is below a certain threshold.
Mortgage Insurance Premium (MIP)
The mortgage insurance charged on many FHA-insured loans, which can differ in structure from private mortgage insurance on conventional loans.

O

Origination Fee
A fee charged by a lender for processing a new loan application, often expressed as a percentage of the loan amount.
Owner's Title Policy
Optional title insurance that protects the buyer's own financial interest in a property, generally for as long as they (or their heirs) own it.

P

PITI
Shorthand for Principal, Interest, Taxes, and Insurance — the typical components of a monthly mortgage payment.
Points (Discount Points)
Optional upfront fees paid to a lender in exchange for a reduced interest rate over the life of the loan.
Pre-Approval
A lender's conditional, document-verified estimate of how much a borrower might be able to borrow, typically stronger than a pre-qualification.
Pre-Qualification
An informal, typically quick estimate of borrowing capacity based on self-reported financial information.
Private Mortgage Insurance (PMI)
Mortgage insurance often required on conventional loans when the down payment is below roughly 20%, generally cancellable once enough equity is reached.
Property Disclosure Statement
A document in which a seller reports known facts about a property's condition and history, with specific requirements that vary by state.
Property Taxes
Recurring taxes assessed by local government based on a property's assessed value, often collected monthly through an escrow account.

R

Rate Lock
A lender's commitment to hold a specific interest rate for a set period while a loan is being processed.
Reserve Study
A report estimating the useful life and future repair or replacement cost of an HOA's shared components (like a roof or elevator), used to judge whether reserve savings are adequate.

S

Seller Disclosure
See Property Disclosure Statement.
Special Assessment
A one-time fee an HOA or co-op charges owners, on top of regular dues, usually to cover a large or unexpected repair not covered by reserve funds.

T

Title
The legal right of ownership to a property.
Title Insurance
Insurance that protects against certain past ownership or claim issues with a property's title, often required by lenders.
A review of public records to confirm a property's legal ownership history and check for liens or claims.

U

Underwriting
A lender's detailed review process to verify documentation and assess risk before issuing final loan approval.
USDA Loan
A mortgage guaranteed by the U.S. Department of Agriculture for eligible properties in designated rural or suburban areas, often associated with no minimum down payment.

V

VA Loan
A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, service members, and some surviving spouses, often associated with no minimum down payment.
Verification of Employment (VOE)
A lender's confirmation of a borrower's current job and income, often performed close to closing as one of the final steps before clear to close.

W

Walk-Through
A final visit to a property, typically shortly before closing, to confirm its condition and any agreed-upon repairs.