100+ Terms Defined
Mortgage Glossary —
Plain English, No Jargon
Every mortgage term you'll encounter — defined clearly by Dustin Carlson (NMLS #193009) with 25+ years of experience helping clients understand the process from start to close.
⭐ Essential Terms — Start Here
⭐ Most Searched Mortgage Terms
Real Estate Investors
DSCR Ratio
Non-QM Loan
Cap Rate
Hard Money Loan
Bank Statement Loan
Rental Income
A Adjustable · Amortization · ARM · Appraisal
Adjustable-Rate Mortgage (ARM) ARM
Mortgage insurance protects the lender if you fall behind on your payments. Mortgage insurance is typically required if your down payment is less than 20 percent of the property value. On FHA loans, this is called Mortgage Insurance Premium (MIP). On conventional loans with less than 20% down, it is called Private Mortgage Insurance (PMI).
Amortization
Amortization means paying off a loan with regular payments over time, so that the amount you owe decreases with each payment. Most home loans amortize, but some mortgage loans do not fully amortize, meaning that you would still owe money after making all of your payments.
Appraisal
An independent professional assessment of a property's market value, performed by a licensed appraiser. Required by lenders to confirm the property is worth the purchase price (or refinance amount). The appraisal also includes a market rent analysis for DSCR loans.
Bridge Loan
A short-term loan (typically 6–12 months) that allows borrowers to access equity in their current home before it sells — often used as a down payment on a new purchase. Bridge loans solve the timing problem for move-up buyers who need to buy before they can sell.
→ See our guide: How to Buy Your Dream Home While Selling Your Current One
→ Read: Buy a Home While Selling Yours
Buy-Down (Rate Buy-Down)
Paying upfront discount points to reduce your interest rate for the life of the loan (permanent buy-down) or for a set period (temporary buy-down, such as 2-1 or 3-2-1). Each discount point costs 1% of the loan amount and typically reduces the rate by 0.25%.
Annual Percentage Rate (APR)
An annual percentage rate (APR) is a broader measure of the cost of borrowing money than the interest rate. The APR reflects the interest rate, any points, mortgage broker feesand other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.
Asset Depletion
A non-traditional income calculation method where lenders divide your liquid assets by the loan term to derive a monthly income figure. Useful for retirees or wealthy borrowers with substantial assets but limited taxable income. A form of Non-QM lending.
Annual Percentage Rate (APR)
The true cost of borrowing as a yearly rate, including interest and fees. Always higher than the note rate. Use APR — not the rate — to compare loans from different lenders.
Asset Depletion
Income method where lenders divide liquid assets by loan term to derive monthly income. Useful for retirees with substantial savings. A form of Non-QM lending.
C Cash-Out · Closing · Conforming · Conventional
Cash-Out Refinance
A refinance where you borrow more than your current mortgage balance and receive the difference in cash. Used to access home equity for home improvements, debt consolidation, investmentsor other major expenses. The cash-out amount is added to your new loan balance.
→ How to Refinance Your Mortgage in 2026
Closing Costs
Fees and expenses paid at closing, beyond the down payment. Typically 2–5% of the loan amount. Include lender fees (origination, underwriting), third-party fees (appraisal, title, attorney)and prepaid items (property taxes, homeowner's insurance). Some costs can be rolled into the loan or covered by seller concessions.
Conforming Loan 2026: $832,750
A mortgage that meets Fannie Mae and Freddie Mac guidelines, including loan limits. In 2026, the standard conforming limit is $832,750 ($1,249,125 in high-cost areas). Conforming loans typically offer the most competitive rates because they can be sold to Fannie and Freddie on the secondary market.
→ Learn more: 2026 Jumbo Loan Limits Guide
Conventional Loan
A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans Affairsor Department of Agriculture loan programs).
Credit Score (FICO)
A credit score predicts how likely you are to pay back a loan on time. Companies use a mathematical formula—called a scoring model—to create your credit score from the information in your credit report. There are different scoring models, so you do not have just one credit score. Your scores depend on your credit history, the type of loan productand even the day when it was calculated.
Contingency
A condition in a purchase agreement that must be met for the sale to proceed. Common contingencies include financing (the buyer gets approved for a mortgage), inspection (home passes inspection)and appraisal (home appraises at or above purchase price). Removing contingencies makes offers more competitive.
Cap Rate
Return on real estate: NOI ÷ Property Value. A property with $24,000 NOI worth $300,000 = 8% cap rate. Used by investors to compare properties. → DSCR Investor Guide
Chain of Title
The complete historical ownership record for a property. Lenders require a clear chain before approving a mortgage. Title insurance protects against undiscovered gaps.
Clear to Close
Final underwriting approval indicating all conditions are met and the loan is ready to fund. Usually issued 1–3 days before your closing date.
Closing Disclosure
A Closing Disclosure is a required five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly paymentsand how much you will pay in fees and other costs to get your mortgage.
Comparable Sales
Recently sold similar properties used by appraisers to determine market value. Appraisers use 3–5 comps within one mile sold within six months.
Conforming Loan
A mortgage meeting FHFA guidelines, including the 2026 standard limit of $832,750. Typically offers better rates than jumbo loans. → 2026 Jumbo Loan Limits Guide
Contingency
A condition that must be met for a sale to proceed. Common contingencies: financing, inspectionand appraisal. Removing contingencies strengthens offers in competitive markets.
D DSCR · DTI · Down Payment · Deed of Trust
DSCR (Debt Service Coverage Ratio) Investors
A ratio used to qualify real estate investors for mortgages without W-2s or tax returns. Calculated as: Monthly Gross Rental Income ÷ Total Monthly Mortgage Payment (PITIA). A DSCR of 1.0+ means the property's income covers its mortgage. Programs are available with a minimum DSCR of 0.75 — ratios of 0.75–0.99 may qualify but typically require more down payment or a slightly higher rate.75 minimum — though a DSCR of 0.75–0.99 typically requires a larger down payment or slightly higher rate. A DSCR of 1.0 meets the standard threshold; 1.25 or higher qualifies for the best terms.
→ Full guide: DSCR Loans Explained
→ Read the full DSCR Investor Guide
DTI (Debt-to-Income Ratio) DTI
Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow.
Down Payment
A down payment is the amount you pay toward the home upfront. You put a percentage of the home's value down and borrow the rest through your mortgage loan. Generally, the larger the down payment you make, the lower the interest rate you will receive and the more likely you are to be approved for a loan.
→ First-Time Homebuyer Programs in Texas & Nationwide
Deed of Trust
A legal document that pledges your property as collateral for a mortgage. Used in many states instead of a traditional mortgage. Names three parties: borrower (trustor), lender (beneficiary)and a neutral trustee who holds the title until the loan is paid off.
DSCR (Debt Service Coverage Ratio)
Rental income divided by total PITIA payment (principal, interest, taxes, insurance, and association dues). Minimum DSCR of 0.75 may qualify — ratios of 0.75–0.99 typically require more down payment or a higher rate; 1.0+ is the standard threshold; 1.25+ gets the best terms. Lenders use DSCR to qualify investors without personal income documentation. 1.25 = property earns 25% more than the debt cost. → Full DSCR Investor Guide
Due-on-Sale Clause
Requires full loan repayment when the property is sold or transferred. Present in most conventional mortgages. VA loans are an exception — they can be assumed by qualified buyers.
E Equity · Escrow · Equal Housing
Equity (Home Equity)
Equity is the amount your property is currently worth minus the amount of any existing mortgage on your property.
Escrow
An escrow account is set up by your mortgage lender to pay certain property-related expenses, like property taxes and homeowner's insurance. A portion of your monthly payment goes into the account. If your mortgage doesn't have an escrow account, you pay the property-related expenses directly.
Equity Stripping
A predatory lending practice where a lender extracts equity from a homeowner through excessive fees, high-interest loansor repeated refinancing. Also called "loan flipping." Regulated under HOEPA and state predatory lending laws.
Earnest Money Deposit
Earnest money is a deposit a buyer pays to show good faith on a signed contract agreement to buy a home. The deposit is held by a seller or third party like a real estate agent or title company. If the home sale is finalized, the earnest money may be applied to closing costs or the down payment.
F FHA · Fixed Rate · FHFA · Fannie Mae
FHA Loan Gov-Backed
A mortgage insured by the Federal Housing Administration. Requires as little as 3.5% down with a 580+ credit score (10% down with 500–579). Popular with first-time buyers. Requires both upfront and annual mortgage insurance premiums (MIP). FHA loan limits vary by county and are typically lower than conforming limits.
→ FHA Loan Requirements 2026 — Full Guide
→ Read the complete guide: FHA Loan Requirements 2026
Fixed-Rate Mortgage
A mortgage with an interest rate that never changes for the life of the loan. Your principal and interest payment remains constant whether the loan term is 10, 15, 20or 30 years. Provides payment predictability and protection against rising rates. Most popular loan type in the U.S.
FHFA (Federal Housing Finance Agency)
The federal agency that regulates Fannie Mae and Freddie Mac and sets annual conforming loan limits. In 2026, FHFA set the standard limit at $832,750 and the high-cost area limit at $1,249,125. The FHFA also publishes a county-by-county list of high-cost designations.
FHA Loan
FHA loans are loans from private lenders that are regulated and insured by the Federal Housing Administration (FHA). FHA loans differ from conventional loans because they allow for lower credit score requirements and down payments as low as 3.5 percent of the total loan amount. Maximum loan amounts vary by county.
Forbearance
Forbearance is when your servicer allows you temporarily to pay your mortgage at a lower rate or temporarily to stop paying your mortgage. Your servicer may grant you forbearance if, for example, you recently lost your job, suffered from a disasteror from an illness or injury that increased your health care costs.
Foreclosure
Foreclosure is when the lender or servicer takes back property after the homeowner fails to make mortgage payments. In some states, the lender has to go to court to foreclose on your property (judicial foreclosure), but other states do not require a court process (non-judicial foreclosure).
Front-End Ratio
Housing costs (PITIA) as a percentage of gross monthly income. Preferred below 28–31% for conventional loans.
Gift Funds
Funds from a family member used toward down payment or closing costs. Requires a gift letter confirming no repayment is expected. FHA allows 100% of down payment from gifts.
H HELOC · HOA · Hard Inquiry
HELOC (Home Equity Line of Credit) HELOC
A revolving line of credit secured by your home's equity. Works like a credit card — you draw what you need, repay itand draw again. Variable interest rate. Often used by move-up buyers to fund the down payment on a new home before the current one sells. Most lenders freeze HELOCs once a home is listed for sale.
HOA (Homeowners Association)
An organization that manages common areas and enforces rules in planned communities, condosor townhome developments. Monthly or annual HOA dues are included in your PITIA for DTI calculations. Lenders verify HOA financial health before approving loans in HOA-governed communities.
Hard Inquiry (Hard Pull)
A credit check that appears on your credit report and may temporarily lower your score by a few points. Required for formal loan applications. Multiple mortgage hard inquiries within a short window (typically 14–45 days) are treated as a single inquiry by FICO — protecting rate-shoppers. Getting started with Dustin does NOT require a hard pull.
Hard Money Loan
Short-term asset-based loan from private investors. Based on property value, not credit score. Used by fix-and-flip investors. Rates typically 10–15%+, with fast approvals. → DSCR & Investor Loan Guide
HELOC
Revolving credit line secured by home equity. Draw as needed during a 10-year period; repay over 20 years. Variable rate. Useful for renovations, bridge financingor debt consolidation. → Using a HELOC to Buy Before You Sell
HUD-1 Settlement Statement
Now-replaced closing form listing all charges. Replaced in 2015 by the Closing Disclosure. Still used for some reverse mortgage and all-cash transactions.
I Interest Rate · In-House Underwriting
Interest Rate vs. APR
The interest rate is the cost of borrowing expressed as a percentage of the loan balance. APR (Annual Percentage Rate) includes the interest rate plus fees and other loan costs, providing a truer picture of total cost. Always compare APR when shopping multiple lenders to ensure an apples-to-apples comparison.
In-House Underwriting
When a lender processes, underwritesand funds loans internally rather than outsourcing to third parties. In-house underwriting means faster decisions, fewer delaysand better communication — the lender controls the entire timeline. First Colony Mortgage and First Colony Mortgage underwrite, fundand close all loans in-house, enabling closings as fast as 10 days.
Interest Rate Lock
Lender guarantee to hold a specific rate for 30–60 days during loan processing. Protects against rate increases. Extended locks available for a fee.
Interest-Only Loan
Mortgage where payments cover only interest for an initial period (5–10 years), then principal payments begin. Balance does not decrease during the interest-only phase.
J Jumbo Loan
Jumbo Loan 2026: Above $832,750
Each year Fannie Mae, Freddie Macand their regulator, the Federal Housing Finance Agency (FHFA), set a maximum amount for loans that they will buy from lenders. Loans that exceed these conforming loan limits are called jumbo loans. In 2026, the standard conforming limit is $832,750 for most counties; loans above this threshold require different qualification standards. Jumbo loans are available through First Colony Mortgage Corporation.
→ Full guide: 2026 Jumbo Loan Limits by State
→ Read the 2026 Jumbo Loan Limits Guide
L LTV · Lock · Lien · Loan Estimate
LTV (Loan-to-Value Ratio) LTV
The ratio of your loan amount to the property's appraised value, expressed as a percentage. 80% LTV on a $500,000 home = $400,000 loan. Lower LTV means more equity, less risk for the lenderand typically better rates. Reaching 80% LTV on a conventional loan eliminates PMI. DSCR loans also use LTV to determine down payment requirements.
Rate Lock
A lender's commitment to honor a specific interest rate for a defined period (typically 15–60 days), protecting the borrower if rates rise before closing. Rate locks typically expire at closing — if your loan doesn't close in time, you may need to extend (sometimes at cost) or accept the current market rate.
Lien
A legal claim against a property as security for a debt. A mortgage is a first lien — the lender has the right to foreclose if payments aren't made. Other liens can include tax liens, HOA liensor contractor liens. Programs are available with a minimum DSCR of 0.75 — ratios of 0.75–0.99 may qualify but typically require more down payment or a slightly higher rate.
Loan Estimate (LE)
A Loan Estimate is a three-page form that you receive after applying for a mortgage. It includes important information, including the estimated interest rate, monthly payment and total closing costs for the loan.
LTV (Loan-to-Value)
The loan-to-value (LTV) ratio is a measure comparing the amount of your mortgage with the appraised value of the property. The higher your down payment, the lower your LTV ratio. Mortgage lenders may use the LTV in deciding whether to lend to you and to determine if they will require private mortgage insurance.
Loan Origination
The complete process of creating a mortgage — from application and document collection through appraisal, underwritingand closing. Loan officers guide borrowers through every step.
M MIP · Mortgage · Market Rent Analysis
MIP (Mortgage Insurance Premium) FHA Only
Mortgage insurance required on FHA loans. Unlike PMI (conventional loans), MIP has two components: an upfront MIP of 1.75% of the loan amount (paid at closing or rolled in) and an annual MIP (0.45–1.05% depending on loan term, amountand LTV) paid monthly. For most FHA loans with less than 10% down, MIP lasts the life of the loan.
Market Rent Analysis
An appraiser's assessment of the fair market rent for an investment property, based on comparable rentals in the area. Used for DSCR loan qualification when a property is vacant or newly purchased. The appraiser's market rent determination becomes the income used in the DSCR calculation.
MIP (Mortgage Insurance Premium)
Insurance required on all FHA loans. Upfront MIP: 1.75% of loan amount. Annual MIP: 0.55–1.05% paid monthly. Unlike PMI, FHA MIP typically stays for the loan's life with less than 10% down.
Mortgage Note
Legal document creating your personal obligation to repay the loan. Specifies loan amount, rate and payment schedule. The deed of trust (separate document) secures the note against the property.
O Origination Fee · Owner-Occupied
Origination Fee
An origination fee is what the lender charges the borrower for making the mortgage loan. The origination fee may include processing the application, underwriting and funding the loan and other administrative services.
Owner-Occupied
A property the borrower intends to live in as their primary residence or second home. Owner-occupied loans typically offer better rates and lower down payment requirements than investment property loans, because owner-occupants statistically have lower default rates. Misrepresenting occupancy intention is mortgage fraud.
Owner Financing
Arrangement where the seller acts as lender. Buyer makes payments directly to seller. Useful when buyers can't qualify for traditional financing, but carries risk if an underlying mortgage has a due-on-sale clause.
P PITIA · PMI · Pre-Qualification · Points
PITIA Monthly Housing Cost
The total monthly housing payment: Principal + Interest + Taxes + Insurance + Association dues (HOA). PITIA is the figure used by lenders when calculating your front-end DTI. Example: A $2,100 P&I payment + $400 taxes + $150 insurance + $200 HOA = $2,850 PITIA.
PMI (Private Mortgage Insurance) Conventional
Insurance required on conventional loans when LTV exceeds 80% (down payment less than 20%). Protects the lender if you default. Typically costs 0.5–1.5% of the loan amount annually. Unlike FHA's MIP, PMI can be canceled once you reach 20% equity — either through paydown or appreciation. Request cancellation in writing when you hit 20%.
Pre-Qualification
An initial assessment of your borrowing capacity based on stated income, assets, debtsand a soft or hard credit review. Gives you a realistic price range before house hunting. Not a commitment to lend, but demonstrates to sellers that you're a serious buyer. Through First Colony Mortgage, Dustin provides pre-qualifications in under 90 minutes.
→ Get Pre-Qualified with Dustin in 90 Minutes
→ Get pre-qualified: Get Pre-Qualified in 90 Minutes
Points (Discount Points)
Prepaid interest paid at closing to permanently reduce your interest rate. One point = 1% of the loan amount. Each point typically buys down the rate by 0.25%. Paying points makes sense if you plan to stay long enough for the monthly savings to recoup the upfront cost — the "break-even" analysis. Dustin will run this calculation for you.
Pre-Qualification Letter
A lender's written conditional commitment to lend a specific amount based on verified income, credit and assets. Stronger than pre-qualification. Sellers and agents often require a pre-qualification letter with any offer. Through First Colony Mortgage, Dustin can issue a pre-qualification in under 90 minutes.
PITIA
Principal, Interest, Taxes, Insuranceand Association dues — your full monthly housing payment. Used to calculate front-end DTI and DSCR ratios.
PMI (Private Mortgage Insurance)
Private Mortgage Insurance (PMI) is a type of mortgage insurance that benefits your lender. You might be required to pay for PMI if your down payment is less than 20 percent of the property value and you have a conventional loan. You may be able to cancel PMI once you've accumulated enough equity in your home.
Prepayment Penalty
A prepayment penalty is a fee that some lenders charge if you pay off all or part of your mortgage early. Not all mortgages have a prepayment penalty.
Principal
The principal is the amount of a mortgage loan that you have to pay back. Your monthly payment includes a portion of that principal. When a payment on the principal is made, the borrower owes less and will pay less interest.
Pre-Qualification Letter
Written conditional commitment to lend a specific amount based on verified income, credit and assets. Stronger than pre-qualification. Required by most sellers. Dustin delivers pre-qualifications in under 90 minutes.
R Refinance · Rate Lock · Reserves
Refinance
Replacing an existing mortgage with a new one — to get a lower rate (rate-and-term refinance), access equity (cash-out refinance)or change loan terms. The process mirrors a purchase loan: application, appraisal, underwritingand closing. Break-even analysis determines how long it takes for monthly savings to recoup closing costs.
→ How to Refinance Your Mortgage in 2026
Reserves
Cash or liquid assets remaining after a loan closes, measured in months of PITIA payments. Lenders require reserves to ensure you can continue paying your mortgage during financial disruption. Jumbo loans typically require 6–12 months of reserves. Investment properties and DSCR loans may require more. Retirement accounts and investment accounts often count at 60–70%.
Rate-and-Term Refinance
Refinancing to get a better interest rate or different loan term without taking cash out. Used when rates drop. No new money changes hands beyond paying off the existing balance.
RESPA
Federal law requiring lenders to provide cost disclosures and prohibiting kickbacks. Mandates the Loan Estimate and Closing Disclosure.
T Title · Term · TRID
Title Insurance
Insurance protecting against claims on property ownership arising from past events — unpaid taxes, forged deeds, undisclosed heirs, recording errors. Two types: lender's title insurance (required, protects the lender) and owner's title insurance (optional but strongly recommended, protects you). A one-time premium paid at closing.
Loan Term
The length of time to fully repay a mortgage through regular payments. Common terms: 30-year (lowest payment, most interest paid), 15-year (higher payment, significant interest savings)and 20-year (balance of both). Shorter terms build equity faster and save dramatically on total interest but require higher monthly payments.
Title Search
Examination of public records confirming a seller's right to sell and identifying any liens or judgments. Required by lenders. Performed by a title company before closing.
Truth in Lending Act
Federal law requiring lenders to clearly disclose APR, finance chargesand total cost of credit. The Loan Estimate and Closing Disclosure are TILA-mandated forms.
U Underwriting · USDA
Underwriting
The lender's process of evaluating a loan application — verifying income, assets, credit and property value to determine risk. The underwriter issues one of three decisions: approved, approved with conditionsor denied. In-house underwriting (like at First Colony Mortgage) means faster decisions with fewer third-party delays.
USDA Loan $0 Down
A mortgage backed by the U.S. Department of Agriculture for eligible rural and some suburban properties. Offers 100% financing (no down payment) for qualifying borrowers and areas. Requires property to be in an eligible geographic area (USDA eligibility maps) and borrower income to be within limits. Has both upfront and annual guarantee fees instead of PMI.
USDA Loan
The Rural Housing Service, part of the U.S. Department of Agriculture (USDA) offers mortgage programs with no down payment and generally favorable interest rates to rural homebuyers who meet the USDA's income eligibility requirements.
V VA Loan · Variable Rate
VA Loan Veterans · $0 Down
A mortgage guaranteed by the U.S. Department of Veterans Affairs, available to eligible veterans, active-duty service membersand surviving spouses. Key benefits: no down payment required, no PMI, competitive ratesand no official loan limit for eligible borrowers with full entitlement (enabling VA jumbo loans). Requires a VA funding fee (can be financed) unless the borrower has a service-connected disability.
→ VA Loan Benefits Explained for Veterans
→ Learn more: VA Loan Benefits for Veterans
Variable Rate
An interest rate that changes based on an underlying index (such as SOFR). Common in ARMs and HELOCs. Rate adjustments are calculated as: Index + Margin = New Rate. Caps limit how much the rate can change per adjustment period and over the life of the loan, protecting borrowers from extreme increases.
VA Loan
A VA loan is a loan program offered by the Department of Veterans Affairs (VA) to help servicemembers, veteransand eligible surviving spouses buy homes. The VA does not make the loans but sets the rules for who may qualify and the mortgage terms. The VA guarantees a portion of the loan to reduce the risk of loss to the lender. The loans generally are only available for a primary residence.
VA Funding Fee
One-time fee (0.5%–3.6%) funding the VA program. Can be rolled into the loan. Amount depends on down payment size and loan use. Disabled veterans are typically exempt.
B
Bank Statement Loan
A Non-QM mortgage where 12–24 months of bank statements are used to verify income instead of tax returns or W-2s. Ideal for self-employed borrowers whose tax returns show low income due to business deductions. First Colony Mortgage offers bank statement loans nationwide.
→ Bank Statement Loans for Self-Employed Borrowers
Balloon Payment
A large lump-sum payment due at the end of a short-term loan. Common in bridge and commercial loans. Requires refinancing or property sale when it comes due.
Basis Point
One one-hundredth of a percentage point (0.01%). A rate move from 6.50% to 6.75% = 25 basis points. Standard unit used by lenders and the Federal Reserve.
Bank Statement Loan
Non-QM mortgage using 12–24 months of bank statements to verify income for self-employed borrowers. No tax returns or W-2s required. First Colony Mortgage offers bank statement loans nationwide.
W
W-2 Income
Wages reported on IRS Form W-2 from an employer. Most straightforward income for mortgage qualification. Lenders average two years of W-2 income. Self-employed borrowers use bank statement or DSCR loans.
S
Second Mortgage
A subordinate loan secured by the same property as your first mortgage. Ranks behind the first in foreclosure. Includes HELOCs and fixed home equity loans.
Short Sale
Selling a home for less than the mortgage balance owed, with lender approval. Used to avoid foreclosure when the home is underwater. Less damaging to credit than foreclosure.
Q
Qualified Mortgage
CFPB-defined mortgage meeting ability-to-repay standards with limits on fees, no risky featuresand DTI caps. Provides legal protections to lenders and clear guardrails for borrowers.
N
Non-QM Loan
Any mortgage outside CFPB Qualified Mortgage standards. Includes DSCR, bank statementand asset-depletion loans. Serves self-employed borrowers, investors and those with non-traditional income. → DSCR Investor Guide
Note Rate
The interest rate stated on your mortgage note used to calculate monthly P&I payment. Different from APR, which includes fees and other charges.
G
Government-Sponsored Enterprise
Private companies with a public mission. Fannie Mae and Freddie Mac are GSEs that purchase conforming mortgages from lenders to maintain liquidity in the housing market. Regulated by FHFA.
Written & Reviewed by Dustin Carlson, NMLS #193009
Loan Officer · First Colony Mortgage Corporation NMLS #3112 · 25+ Years Experience · 10,000+ Loans Originated across the nation.
25+ years of mortgage experience at your fingertips. Pre-qualify in under 90 minutes.
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