The mortgage glossary, translated

Your interest rate plus most lender fees, expressed as a yearly percentage. It’s the number that makes two loan offers comparable — the rate alone doesn’t.

The fees to finalize the loan and transfer the home: lender fees, title, appraisal, recording, prepaid taxes and insurance. Typically 2–3% of the price. Seller credits and lender credits can offset them.

The part of the price you pay up front. Conventional loans start at 3% for first-time buyers, FHA at 3.5%, VA and USDA at $0. Twenty percent is not required — it just avoids mortgage insurance.

A deposit (often 1–2% of the price) you put down when your offer is accepted, showing you’re serious. It’s credited back to you at closing.

A holding account your lender uses to pay your property taxes and homeowners insurance. Part of each monthly payment goes in; the bills get paid out. One payment instead of three.

Money a family member gives you toward the down payment or closing costs. Allowed on most programs with a simple gift letter — Jerri-Lynn walks your family through it.

Insurance that protects the lender when you put less than 20% down on a conventional loan. It’s temporary — it can be removed at 20% equity and terminates automatically at 22%.

Prepaid interest: paying 1% of the loan amount up front (“one point”) to lower your rate. Sometimes worth it, sometimes not — Jerri-Lynn runs the break-even math with you.

Money the seller agrees to put toward your closing costs as part of the negotiation. Common in Middle Tennessee, and it can meaningfully reduce your cash to close.

Your monthly debt payments divided by your gross monthly income. Lenders use it to size your loan. Rough guide: many programs work up to the mid-40s percent, some higher with strong compensating factors.

The three-digit number lenders use to price risk. FHA guidelines allow 580+; conventional typically 620+; the best pricing tends to start around 740. It’s a snapshot, not a verdict — scores move.

Pre-qualification is an estimate based on what you tell the lender. Pre-approval means documents were actually reviewed. Sellers want the second one. Jerri-Lynn only issues the second one.

Money left in your accounts after closing. Not always required, but a couple of months of payments in reserve strengthens a file — and makes your first year as an owner calmer.

The loan amount divided by the home’s value. 10% down = 90% LTV. Lower LTV generally means better pricing and, at 80% or below, no PMI on conventional loans.

An independent opinion of what the home is worth, ordered by the lender. If it comes in below the price, you and your agent have options — Jerri-Lynn walks you through every one.

The moment underwriting says every condition is satisfied and the loan is approved to fund. From here, it’s scheduling your signing.

The final, itemized statement of your loan terms and costs. By law you receive it at least three business days before closing, so there are no surprises at the table.

Items the underwriter needs before final approval — an updated bank statement, a letter explaining a deposit. Completely normal. Jerri-Lynn translates each one into plain English.

The standardized three-page form every lender must give you within three business days of application, showing your estimated rate, payment, and closing costs. Compare LEs, not marketing.

Locking your interest rate for a set period (often 30–60 days) so market moves don’t change your deal. Jerri-Lynn talks strategy with you on when to lock.

The lender’s review of your income, assets, credit, and the property against program guidelines. It’s the “are we sure?” step — and it’s where a well-prepared file sails through.