Amortization refers to the process of gradually paying off a loan through scheduled, periodic payments of both principal and interest. Over time, the portion of the payment that goes toward the principal increases, while the portion going toward interest decreases.

The APR is the annual rate charged for borrowing, expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the loan.

An appraisal is a professional assessment of a property's value, typically conducted by a licensed appraiser. Lenders require appraisals to ensure the property’s value supports the loan amount.

Closing costs are the fees and expenses associated with finalizing a real estate transaction. These can include origination fees, appraisal fees, title insurance, and other related costs.

DTI is a measure used by lenders to determine a borrower’s ability to manage monthly payments and repay debts. It is calculated by dividing total monthly debt payments by gross monthly income.

A down payment is the initial upfront portion of the total amount due on a purchase. In the context of home buying, it is the amount paid out of pocket by the buyer and is typically expressed as a percentage of the total purchase price.

Equity is the difference between the market value of a property and the amount still owed on the mortgage. As you pay down your mortgage or as property values increase, your equity grows.

Escrow refers to a third-party service that holds funds or documents on behalf of the transacting parties. In real estate, an escrow account is often used to pay property taxes and insurance premiums.

A fixed-rate mortgage is a home loan with an interest rate that remains the same for the entire term of the loan, providing consistent monthly payments.

A HELOC is a revolving line of credit secured by the equity in a home. Borrowers can draw from the HELOC as needed, up to a predetermined limit, and repay over time.

The LTV ratio is a risk assessment ratio used by lenders to compare the amount of the loan to the appraised value of the property. A higher LTV ratio indicates higher risk.

Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. It is typically required for borrowers with down payments less than 20% of the home's purchase price.

The principal is the amount of money borrowed for a loan, excluding interest. Repaying the principal reduces the loan balance.

PMI is a type of mortgage insurance that borrowers might be required to purchase if their down payment is less than 20% of the home’s purchase price. PMI protects the lender if the borrower defaults on the loan.

Refinancing involves replacing an existing mortgage with a new one, typically to take advantage of lower interest rates, change the loan term, or access home equity.

Title insurance protects against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It ensures that the buyer and lender have clear ownership of the property.

Underwriting is the process lenders use to determine the risk of lending money to a borrower. It involves evaluating the borrower’s creditworthiness, income, and other factors.

A variable-rate mortgage, also known as an adjustable-rate mortgage (ARM), has an interest rate that may change periodically, based on an index which reflects the cost to the lender of borrowing on the credit markets.

The closing disclosure is a five-page document that provides final details about the mortgage loan, including loan terms, projected monthly payments, and how much the borrower will pay in fees and other costs to get the mortgage.