Home Loans


Mortgage Terms Simplified


Annual Percentage Rate (APR)

Total yearly cost of the loan which includes the interest rate and other prepaid finance charges.

Closing Cost

The fees incurred when purchasing a home or refinancing the mortgage on a property. Costs vary by transaction, and will include lender or third-party fees or prepaid expenses, such as; taxes, insurance, and interest.

Down Payment

This is the up-front money you need for a home purchase that is not financed by the mortgage. Getting financial help with a down payment—or using gift monies toward it—may be possible depending on the loan program. Ask your loan officer for more information.


Escrow refers to an account held by the lender into which the homebuyer deposits money for tax or insurance payments.

Interest Rate

The charge for borrowing money, paid over a specific period of time.

Hazard Insurance

Insurance that protects a property owner against damage caused by fires, severe storms, earthquakes or other natural events.

Flood Insurance

Specific insurance coverage against property loss from flooding.

Mortgage Insurance (MI/PMI)

Protects the lender against loss and is generally required with a down payment of less than 20%. Different types of MI include FHA/MIP, Private Mortgage Insurance (PMI) and VA Guarantee Fee


A percentage of the loan amount, paid at closing, to reduce the interest rate on the loan. One point equals 1% of the loan amount.


The meeting between a home buyer, seller, and lender where the property and funds legally change hands. Also referred to as closing.

Owner’s Title Insurance

Protects your home against loss arising from problems connected to the title to your property.