Mortgage paperwork is full of terms nobody explains before you sign — DSCR, non-QM, LTV, non-warrantable condo. This glossary breaks down every one in plain English, organized A to Z, so you know exactly what you're qualifying for.
Updated August 4, 2026
A mortgage with an interest rate that starts fixed for a set period, then adjusts periodically based on market rates.
The schedule of fixed payments that gradually pays off a loan's principal and interest over its term.
The total yearly cost of a loan expressed as a percentage, including interest and most lender fees — not the same as the interest rate alone.
A licensed appraiser's independent estimate of a property's market value, ordered by the lender to confirm the loan amount is justified.
A non-QM mortgage that qualifies self-employed borrowers using bank deposit history instead of tax returns. See if you qualify →
An upfront payment that temporarily or permanently lowers a borrower's interest rate, sometimes paid by the seller as a concession.
The total funds a borrower needs at closing, combining the down payment and closing costs minus any credits.
Fees paid at closing beyond the loan amount — title insurance, recording fees, lender fees, and prepaid items like taxes and insurance.
A federally required form provided at least three days before closing, listing final loan terms and costs.
A form a lender sends to a condo association to check financial health, insurance, and reserves — a building that fails it becomes non-warrantable for conventional financing.
A mortgage not insured or guaranteed by a government agency, typically requiring stronger credit and following Fannie Mae/Freddie Mac guidelines.
A three-digit number summarizing credit history, used by lenders alongside income and assets to determine loan eligibility and pricing.
Debt Service Coverage Ratio loan — a non-QM mortgage qualified on a property's rental income rather than the borrower's personal income. Get started on a DSCR loan →
A comparison of a borrower's monthly debt payments to gross monthly income, used to determine how much they can qualify to borrow.
The portion of a home's purchase price paid upfront in cash, with the remainder financed through the mortgage.
A deposit a buyer puts down to show good faith when making an offer, applied toward the purchase at closing.
The portion of a property's value the owner actually owns — market value minus what's still owed on the mortgage.
An account a lender uses to collect and pay property taxes and insurance on the borrower's behalf as part of the monthly payment.
A mortgage insured by the Federal Housing Administration, allowing lower down payments and more flexible credit requirements.
A mortgage with an interest rate that stays the same for the entire loan term.
Home Equity Conversion Mortgage — a loan for homeowners 62+ that converts home equity into cash without monthly mortgage payments. See if you qualify →
A policy protecting a property against damage and liability, required by lenders as a condition of the loan.
A mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac, typically requiring stronger qualification.
A standardized form lenders provide within three days of application, outlining estimated rate, payment, and closing costs.
The loan amount as a percentage of the property's appraised value — a key factor in approval and mortgage insurance requirements.
Insurance required on loans with lower down payments, protecting the lender if the borrower defaults.
A condo building that doesn't meet Fannie Mae or Freddie Mac guidelines — often due to investor concentration, HOA finances, or insurance — requiring non-QM or portfolio financing instead of conventional. See your financing options →
A mortgage that doesn't meet standard "qualified mortgage" underwriting rules — used for self-employed borrowers, investors, or non-warrantable condos.
A fee a lender charges to process a new loan, usually a percentage of the loan amount.
A lender's conditional commitment to loan a specific amount after verifying a buyer's income, credit, and assets. Start your pre-approval →
An informal, unverified estimate of what a buyer might be able to borrow, based on self-reported financial information.
The original loan amount borrowed, not including interest.
A lender's guarantee to hold a specific interest rate for a set period while the loan is processed.
Replacing an existing mortgage with a new loan, often to change the rate, term, or tap into equity.
Liquid assets a borrower must show beyond closing funds, required by some loan programs — especially DSCR and non-QM — as a qualification cushion.
A loan or line of credit secured by a property already carrying a first mortgage, using the remaining equity as collateral.
The records a lender uses to verify self-employed income — typically tax returns, but bank-statement programs offer an alternative path.
A policy protecting the buyer and lender against defects or claims against the property's title discovered after closing.
The lender's process of verifying a borrower's income, credit, and assets to make a final loan approval decision.
A mortgage guaranteed by the Department of Veterans Affairs, available to eligible veterans and service members, often with no down payment required.
A lender's confirmation of a borrower's job and income directly with the employer, typically done shortly before closing.
Yes — through either a conventional loan using two years of tax returns, or a bank-statement loan that qualifies you on deposit history instead. See which fits your situation →
Often yes, including on many non-warrantable buildings that wouldn't qualify for conventional financing — DSCR programs typically look at the property's rental income, not the condo association's finances, though some property-level restrictions still apply.
Common triggers include high investor/rental concentration, an HOA with inadequate reserves, ongoing litigation, or a building that hasn't completed a required milestone inspection or SIRS. Any one of these can fail the condo questionnaire.
Yes — Social Security, pension, and retirement account income can all count toward qualifying, and a HECM/reverse mortgage is a separate path that doesn't require monthly payments at all.
Pre-qualification is a quick, unverified estimate based on what you report. Pre-approval verifies your income, credit, and assets, and carries real weight with sellers.
Waiting periods apply and vary by loan program and circumstances — some non-QM programs allow shorter waits than conventional financing. Your exact timeline depends on your full credit picture.
Most DSCR programs require some cash reserves after closing, though the exact amount depends on the lender and the property's debt service coverage ratio.