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 "Y"
Showing 28 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.
MortgagesVA
VA Loan (Department of Veterans Affairs)
A zero-down-payment residential mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, active-duty service members, and surviving spouses.
MortgagesUSDA
USDA Rural Development Loan
A zero-down-payment mortgage backed by the U.S. Department of Agriculture for low-to-moderate-income homebuyers in eligible rural and suburban communities.
Mortgages
Jumbo Mortgage (Non-Conforming Loan)
A conventional home loan whose principal balance exceeds the annual conforming loan limits established by the Federal Housing Finance Agency (FHFA).
MortgagesHECM
Reverse Mortgage (HECM)
An FHA-insured home equity conversion loan for homeowners age 62 and older that converts home equity into tax-free cash without requiring monthly mortgage payments.
Mortgages
2-1 Temporary Rate Buydown
A mortgage financing structure where an upfront escrow subsidy lowers the borrower’s effective interest rate by 2% in Year 1 and 1% in Year 2 before returning to the permanent note rate in Year 3.
Mortgages
Mortgage Recast (Re-Amortization)
A loan modification procedure where a homeowner makes a lump-sum principal payment and the lender re-amortizes the reduced balance over the remaining loan term to lower the monthly payment while keeping the existing interest rate.
MortgagesC2P
Construction-to-Permanent Loan (Single-Close)
A unified mortgage facility that finances land acquisition and ground-up home construction via staged builder draws, then automatically converts into a long-term permanent mortgage upon completion.
Mortgages
Bridge Loan (Swing Financing)
A short-term interim loan secured by a homeowner’s existing property that unlocks trapped equity to fund the down payment on a new home before the current property sells.
MortgagesIPC
Seller Concessions (Interested Party Contributions)
Closing cost credits, prepaid escrow items, or discount points paid by the property seller or builder on behalf of the buyer, governed by strict agency LTV percentage caps.
Mortgages
Hard Money Loan (Asset-Based Private Lending)
A short-term, high-interest real estate loan funded by private investors or funds and underwritten primarily on the collateral value (ARV) of the property rather than borrower credit.
MortgagesLE
TRID Loan Estimate (LE)
A standardized 3-page federal disclosure form mandated by the CFPB that mortgage lenders must deliver within 3 business days of loan application, itemizing interest rates, payments, and binding closing cost tolerances.
MortgagesCD
Closing Disclosure (CD)
The final 5-page federal mortgage settlement statement that itemizes the exact final loan terms, closing costs, and Cash to Close, required to be delivered at least 3 business days prior to loan consummation.
Mortgages
Chain of Title & Abstract of Title
The chronological historical sequence of all recorded ownership transfers, deeds, mortgages, and liens affecting a parcel of real property from its original grant to the present owner.
Mortgages
General Warranty Deed vs. Quitclaim Deed
The legal real estate conveyance instruments used to transfer property ownership, distinguished by whether the seller guarantees clear title (Warranty Deed) or transfers title "as-is" with zero warranties (Quitclaim Deed).
Mortgages
Bi-Weekly Accelerated Mortgage Payment
An accelerated mortgage payoff strategy where a homeowner pays half of their regular monthly principal-and-interest payment every two weeks, resulting in 26 half-payments (13 full monthly payments) per year.