Mortgage words, friend treatment

The cash you put in up front. Not necessarily 20% — conventional loans start at 3%, FHA at 3.5%, VA and USDA can be $0. Down payment assistance can cover much of it.

The fees to complete the purchase — lender fees, title, appraisal, prepaid taxes and insurance. Typically 2–4% of the price. Assistance programs and seller credits can help cover them.

State-backed loans (like Minnesota Housing’s) that cover down payment and closing costs — often deferred with no monthly payment until you sell or refinance. Tiaira’s specialty.

A holding account your lender manages for property taxes and homeowners insurance. Baked into your monthly payment so there are no giant surprise bills.

A monthly cost when you put less than 20% down on a conventional loan. It protects the lender, and it drops off as you build equity — it is not forever.

Principal, Interest, Taxes, Insurance — the four pieces of your real monthly payment. Any calculator that only shows principal & interest is telling you half the story.

Optional up-front fee to lower your interest rate (1 point = 1% of the loan). Sometimes smart, sometimes not — the break-even math decides.

A good-faith deposit (often 1–2%) submitted with your offer. It’s not extra cost — it counts toward your down payment and closing costs at the end.

A lender’s written statement of what you can borrow, after reviewing your credit, income and assets. The document that makes sellers take your offer seriously.

The lighter, unverified cousin of pre-approval — an estimate based on what you tell the lender. Fine for early planning; get the real pre-approval before you shop.

Your monthly debt payments divided by gross monthly income. One of the biggest levers in qualifying — and there are more ways to improve it than people think.

The three-digit number lenders use to price risk. FHA can work from 580; conventional generally from 620. Below a threshold? There’s usually a fixable reason.

The loan amount as a percentage of the home’s value. 95% LTV = 5% down. Drives PMI and pricing.

Money left over after closing — measured in months of payments. Not always required, but they strengthen a file.

The verification phase where a specialist confirms everything in your file. Extra document requests here are normal and mean progress.

An independent professional’s opinion of the home’s value, ordered by the lender. Protects you from overpaying as much as it protects the lender.

Freezing your interest rate for a set window (often 30–60 days) so market moves can’t change your deal while you close.

The best three words in the process: underwriting is fully done and closing can be scheduled.

The final, exact accounting of your loan — rate, payment, cash to close. You get it at least three business days before signing, by law.

Verification that the seller truly owns the home free of claims — plus insurance protecting you if a problem surfaces later.