10 Common Mortgage Terms You Need to Know

Amortization - The process of paying off a debt, such as a mortgage, over time through regular payments.

Down Payment - The amount of money you pay upfront when purchasing a home, usually a percentage of the home's purchase price.

Equity - The difference between the value of the home and the amount owed on the mortgage.

Fixed-Rate Mortgage - A type of mortgage with a fixed interest rate for the life of the loan, meaning the interest rate and monthly payments remain the same.

Interest - The cost of borrowing money, expressed as a percentage of the loan amount.

Mortgage - A loan used to purchase a home, with the home serving as collateral for the loan.

Principal - The amount of money borrowed on a loan, not including interest.

Refinance - The process of obtaining a new mortgage to replace an existing mortgage, often with better terms or a lower interest rate.

Title - The legal right to ownership of a property.

Underwriting - The process of reviewing a loan application to determine if the borrower meets the lender's requirements and can repay the loan.