Mortgage terms, explained simply
Understand the language of home financing. Click any term for a full definition, FAQs, and related concepts.
PMI (Private Mortgage Insurance)
Insurance that protects the lender when a conventional borrower puts down less than 20%.
DTI (Debt-to-Income Ratio)
The percentage of your gross monthly income that goes toward debt payments.
LTV (Loan-to-Value Ratio)
The loan amount as a percentage of the home's value.
DSCR (Debt-Service Coverage Ratio)
A measure of whether a rental property's income covers its debt — used to qualify investor loans.
FHA (Federal Housing Administration)
A government agency whose insured loans help buyers with lower credit or down payments.
HELOC (Home Equity Line of Credit)
A revolving credit line secured by your home's equity.
Reverse Mortgage
A loan for homeowners 62+ that converts equity into cash without monthly payments.
Mortgage Insurance
Insurance that protects the lender if a borrower defaults on a low-down-payment loan.
Underwriting
The lender's process of verifying your finances and approving the loan.
Escrow
A neutral account that holds funds for closing or for property taxes and insurance.
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