Estimate Monthly Payments
You can use our mortgage calculator to estimate your monthly mortgage payment, including taxes and insurance. Simply enter the price of the home, your down payment, and details about the home loan to calculate your payment breakdown, schedule, and more.
Can’t find the term you’re looking for? Give us a call to talk with a mortgage expert today.
2/1 Buy Down Mortgage
Additional Principal Payment
Adjustable-Rate Mortgage (ARM)
movements in an index rate. Sometimes called AMLs (adjustable mortgage loans) or
VRMs (variable-rate mortgages).
the property minus any depreciation taken.
liabilities, and available funds, and considers the type of mortgage you plan to use, the
area where you want to purchase a home, and the closing costs that are likely.
months. For example, 360 months is the amortization term for a 30-year fixed-rate
Annual Percentage Rate (APR)
and loan origination fees. This allows the buyer to compare loans, however APR should
not be confused with the actual note rate.
experience, and analysis of the property.
enforceable claims against others (including bank accounts, stocks, mutual funds, etc.).
requires a credit review of the new borrower and lenders may charge a fee for the
assumption. If a mortgage contains a due-on-sale clause, it may not be assumed by a
requires that a lump sum payment be paid at the end of an earlier specified term.
Biweekly Payment Mortgage
schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the
monthly payment required if the loan were a standard 30-year fixed-rate mortgage. The
result for the borrower is a substantial savings in interest.
proceeds to be used to close on a new house before the present home is sold. Also
known as “swing loan.”
reduce monthly payments during the first few years of a mortgage. Buydowns can occur
in both fixed and adjustable rate mortgages.
adjustment or during the life of the mortgage. Payment caps don’t limit the amount of
interest the lender is earning and may cause negative amortization.
Certificate of Eligibility
Department of Veterans Affairs (VA) mortgage.
Certificate of Reasonable Value (CRV)
maximum value and loan amount for a VA mortgage.
documents and pays closing costs. Also called “settlement.”
buyers and sellers when transferring ownership of a property. Closing costs normally
include an origination fee, property taxes, charges for title insurance and escrow costs,
appraisal fees, etc. Closing costs will vary according to the area country and the lenders
Consumer Reporting Agency (or Bureau)
potential borrower’s credit history. The agency gets data for these reports from a credit
repository and from other sources.
during the term. Usually conversion is allowed at the end of the first adjustment period.
The conversion feature may cost extra.
used by a lender to determine a loan applicant’s creditworthiness.
Credit Risk Score
population, based on the individual’s credit usage history. The credit score most widely
used by lenders is the FICO® score, developed by Fair, Issac and Company. This
3-digit number, ranging from 300 to 850, is calculated by a mathematical equation that
evaluates many types of information that are on your credit report. Higher FICO®
scores represents lower credit risks, which typically equate to better loan terms. In
general, credit scores are critical in the mortgage loan underwriting process.
Deed of Trust
requirements of a mortgage.
ensure payment or an advance of funds in the processing of a loan.
points in interest to reduce the rate and lower the payments for part of the mortgage
term (usually for one year or less). After the discount period, the ARM rate usually
increases according to its index rate.
Effective Gross Income
Salary is usually the principal source, but other income may qualify if it is significant and
market value of the property and the amount still owed on the mortgage.
the fulfillment of a condition. For example, the deposit of funds or documents into an
escrow account to be disbursed upon the closing of a sale of real estate.
insurance, and other property expenses as they become due.
hazard insurance, mortgage insurance, lease payments, and other items as they
supplier of home mortgage funds.
a government mortgage.
underwriting. This 3-digit number, ranging from 300 to 850, is calculated by a
mathematical equation that evaluates many types of information that are on your credit
report. Higher FICO® scores represent lower credit risks, which typically equate to
better loan terms.
Fixed-Rate Mortgage (FRM)
Fully Amortized ARM
the remaining balance, at the interest accrual rate, over the amortization term.
loan program formerly administered by Fannie Mae. Popularly known as Ginnie Mae.
Growing-Equity Mortgage (GEM)
period of time. The increased amount of the monthly payment is applied directly toward
reducing the remaining balance of the mortgage.
Housing Expense Ratio
Items that appear on the statement include real estate commissions, loan fees, points,
and initial escrow amounts. Each item on the statement is represented by a separate
number within a standardized numbering system. The totals at the bottom of the HUD-1
statement define the seller’s net proceeds and the buyer’s net payment at closing.
Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM)
the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a
longer period of time than most adjustable rate loans. For example, a “5/1 loan” has a
fixed monthly payment and interest for the first five years and then turns into a
traditional adjustable rate loan, based on then-current rates for the remaining 25 years.
It’s a good choice for people who expect to move or refinance, before or shortly after,
the adjustment occurs.
an interest rate on an ARM will change over time.The index is generally a published
number or percentage, such as the average interest rate or yield on Treasury bills.
Some index rates tend to be higher than others and some more volatile.
Initial Interest Rate
changes for an adjustable-rate mortgage (ARM). It’s also known as “start rate” or
mortgage insurance (MI).
Interest Accrual Rate
the rate used to calculate the monthly payments.
Interest Rate Buydown Plan
money is then released each month to reduce the mortgagor’s monthly payments during
the early years of a mortgage.
Interest Rate Ceiling
Interest Rate Floor
(usually 15) after the due date.
Lease-Purchase Mortgage Loan
lease a home with an option to buy. Each month’s rent payment consists of principal,
interest, taxes and insurance (PITI) payments on the first mortgage plus an extra
amount that accumulates in a savings account for a downpayment.
Lifetime Payment Cap
increase or decrease over the life of the mortgage.
Lifetime Rate Cap
increase or decrease over the life of the loan. See cap.
Line of Credit
certain amount for a certain time.
Loan-to-Value (LTV) Percentage
(or sales price if it is lower) of the property. For example, a $100,000 home with an
$80,000 mortgage has an LTV of 80 percent.
loan term and points, if any, to be paid at closing. Short term locks (under 21 days), are
usually available after lender loan approval only. However, many lenders may permit a
borrower to lock a loan for 30 days or more prior to submission of the loan application.
interest rate at each adjustment.
Monthly Fixed Installment
When a mortgage negatively amortizes, the monthly fixed installment does not include
any amount for principal reduction and doesn’t cover all of the interest. The loan
balance therefore increases instead of decreasing.
government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency.
Mortgage Insurance Premium (MIP)
Mortgage Life Insurance
force, the debt is automatically paid by insurance proceeds.
reduce the principal on your mortgage. Negative amortization occurs when the monthly
payments do not cover all of the interest cost. The interest cost that isn’t covered is
added to the unpaid principal balance. This means that even after making many
payments, you could owe more than you did at the beginning of the loan. Negative
amortization can occur when an ARM has a payment cap that results in monthly
payments not high enough to cover the interest due.
Non Liquid Asset
rate during a specified period of time.
the form of points. One point is 1 percent of the mortgage amount.
part of the financing.
Payment Change Date
mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment
change date occurs in the month immediately after the adjustment date
Periodic Payment Cap
Periodic Rate Cap
adjustment period, regardless of how high or low the index might be.
paying all closing costs for the purchase of a home. The principal, interest, taxes, and
insurance (PITI) reserves must equal the amount that the borrower would have to pay
for PITI for a predefined number of months (usually three).
you get a mortgage for $165,000 one point means $1,650 to the lender.Points usually
are collected at closing and may be paid by the borrower or the home seller, or may be
split between them.
apply for a loan.
rate influence changes in other rates, including mortgage interest rates.
reduces the remaining balance of a mortgage.
Principal, Interest, Taxes, and Insurance (PITI)
monthly payment that reduces the remaining balance of the mortgage. Interest is the
fee charged for borrowing money. Taxes and insurance refer to the monthly cost of
property taxes and homeowners insurance, whether these amounts that are paid into an
escrow account each month or not.
Private Mortgage Insurance (PMI)
lenders against loss if a borrower defaults. Most lenders generally require MI for a loan
with a loan-to-value (LTV) percentage in excess of 80 percent.
two separate calculations: a housing expense as a percent of income ratio and total
debt obligations as a percent of income ratio.
guaranteeing a specified interest rate and lender costs for a specified period of time.
Real Estate Agent
Real Estate Settlement Procedures Act (RESPA)
Real Estate Agent®
board that is affiliated with the National Association of Real Estate Agents.
such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of
mortgage, thereby making it a part of the public record.
pre-approved line of credit when purchasing goods and services.
Secondary Mortgage Market
manages borrowers’ escrow accounts. The servicer often services mortgages that have
been purchased by an investor in the secondary mortgage market.
Standard Payment Calculation
balance of a mortgage in substantially equal installments over the remaining term of the
mortgage at the current interest rate.
schedule (i.e., seven years), resulting in increased payments as well. At the end of the
specified period, the rate and payments will remain constant for the remainder of the
underwrite, close, fund, or package the mortgages it plans to deliver to the secondary
Total Expense Ratio
expenses plus other monthly debts.
(ARM) plans. Based on the results of auctions that the U.S. Treasury holds for its
Treasury bills and securities or derived from the U.S. Treasury’s daily yield curve, which
is based on the closing market bid yields on actively traded Treasury securities in the
of a mortgage, including the annual percentage rate (APR) and other charges.
years of its mortgage term and a different interest rate for the remainder of the
lender. Underwriting involves an analysis of the borrower’s creditworthiness and the
quality of the property itself.
as a government mortgage.
“Wrap Around” Mortgage
additional amount requested by the mortgagor. Full payments on both mortgages are
made to the “Wrap Around” mortgagee, who then forwards the payments on the first
mortgage to the first mortgagee. These mortgages may not be allowed by the first
mortgage holder, and if discovered, could be subject to a demand for full payment.