MortgagesLTV
Loan-to-Value Ratio (LTV)
An assessment of lending risk calculated by dividing the loan amount by the appraised property value or purchase price.
📚 Financial Knowledge Base
Financial Industry Glossary & Underwriting Guide
Master essential home mortgage, auto financing, interest rate, and underwriting terminology with interactive calculators, mathematical formulas, and practical lending guidelines.
Terms Starting With "S"
Showing 13 definitionsMortgages
Amortization
The mathematical scheduling of equal periodic loan payments that systematically reduce both interest and outstanding principal over time.
MortgagesPITI
PITI (Principal, Interest, Taxes, Insurance)
The four fundamental components that make up a standard monthly mortgage payment.
Mortgages
Escrow
A neutral third-party holding account used to secure funds during real estate transactions and manage property tax and insurance payments.
MortgagesPMI
Private Mortgage Insurance (PMI)
Insurance required on conventional loans with down payments under 20% that protects the lender in case of default.
Mortgages
Mortgage Discount Points
Upfront fees paid directly to the lender at closing in exchange for a permanently reduced mortgage interest rate.
MortgagesARM
Adjustable-Rate Mortgage (ARM)
A home mortgage loan with an initial fixed-rate period followed by periodic rate adjustments tied to a financial index.
Mortgages
Fixed-Rate Mortgage
A home loan where the interest rate and monthly principal and interest payment remain identical for the entire lifespan of the loan.
Mortgages
Closing Costs
The processing, legal, title, appraisal, and governmental fees paid by buyers and sellers at the formal closing of a real estate transaction.
Mortgages
Real Estate Appraisal
An unbiased professional assessment conducted by a licensed appraiser to determine the fair market value of a property.
Mortgages
Title Insurance
An indemnity insurance policy that protects home buyers and mortgage lenders against financial loss resulting from defects in property title.
MortgagesFHA
FHA Loan (Federal Housing Administration)
A government-backed mortgage insured by the Federal Housing Administration allowing lower down payments and flexible credit score standards.
Mortgages
Conforming Loan
A conventional mortgage that meets the underwriting guidelines and loan amount limits set by Fannie Mae and Freddie Mac.