A little less jargon.

Amortization

The gradual repayment of a loan through scheduled payments of principal and interest.

Annual percentage rate (APR)

A yearly measure of the cost of credit that includes interest and certain loan costs.

Appraisal

An assessment of property value used as part of a financing review.

Bridge loan

Financing intended to cover a transitional period between transactions or longer-term arrangements.

Cash-out refinance

A refinance that provides funds beyond the amount needed to pay off the existing mortgage, subject to applicable requirements.

Closing costs

Costs associated with completing a financing transaction, separate from the down payment.

Debt-to-income ratio

A comparison of recurring debt payments with income used in a lending review.

Equity

The difference between a property’s value and the debt secured against it.

Escrow

An arrangement for holding funds for a specified purpose, such as paying property taxes or insurance.

Fixed-rate mortgage

A mortgage with an interest rate that remains fixed for the specified loan term. Taxes, insurance and other costs may still change.

Loan-to-value ratio (LTV)

The loan amount expressed as a percentage of the property value used by the lender.

Mortgage insurance

Insurance that protects the lender in certain mortgage arrangements. Cost and requirements depend on the program.

Preapproval

A more detailed review of a borrower’s finances that may result in a conditional lending decision.

Principal

The amount of a loan balance, excluding interest and other charges.

Underwriting

The review of a borrower, property and transaction against lending requirements.