Mortgage Speak,
Translated.

The foundational words you'll hear thrown around on day one. Master these and the rest of the conversation gets a whole lot easier.

Amortization

Bank Speak: The schedule of paying off a debt over time through regular installments.
Plain English: The math formula that decides how much of your monthly payment goes to interest (the bank's profit) versus principal (your actual loan amount). In the early years, you pay mostly interest. By year 20 of a 30-year loan, that finally flips.

APR (Annual Percentage Rate)

Bank Speak: The true cost of borrowing money, including the interest rate and all lender fees, expressed as a yearly rate.
Plain English: If the interest rate is the sticker price of the loan, the APR is the out-the-door cost including fees. It's the best number to use when comparing two different lenders side by side.

Deed

Plain English: The legal document that transfers ownership of a property from one person to another. The deed gets recorded at the county. The mortgage is a separate document that liens against the deed.

Equity

Plain English: The portion of your home you actually own, free and clear. Your home is worth $500k and you owe $300k? You have $200k in equity. Equity grows two ways: paying down the loan, and the home appreciating in value.

Escrow

Bank Speak: A neutral third-party holding account for funds and documents.
Plain English: A financial holding pen. Before closing, it holds your earnest money. After closing, your lender uses an escrow account to collect a slice of every monthly payment so they can pay your property taxes and homeowners insurance for you when those bills come due.

Interest Rate

Bank Speak: The proportion of a loan that is charged as interest to the borrower.
Plain English: The ongoing fee the bank charges you to borrow their money. It does not include upfront lender fees. That's the APR.

Lien

Plain English: A legal claim against your property that has to be paid off before the property can transfer cleanly. Your mortgage is a lien. So is an unpaid contractor bill or a tax debt. Title insurance protects you from surprise liens.

Mortgage

Plain English: Technically, the mortgage is the security instrument that lets the bank take the house if you stop paying. The actual loan is called the promissory note. In everyday speech, people use "mortgage" to mean the whole loan, and that's fine.

PITI (Principal, Interest, Taxes, Insurance)

Plain English: The four parts that make up your total monthly mortgage payment. When a lender runs your qualification math, they use the full PITI, not just the loan payment. If your loan has PMI or HOA dues, add those too (sometimes called PITIA).

Principal

Plain English: The actual loan amount itself, separate from interest. If you borrow $400,000, your starting principal balance is $400,000. Every monthly payment chips a small piece off the principal and pays the rest to interest.

Promissory Note

Plain English: The legal IOU. It's the document where you formally promise to pay back the loan under specific terms. The note is the loan. The mortgage is the security behind it.

Title

Plain English: The legal concept of ownership. When you are "on title," you legally own the home. The title company verifies that nobody else secretly owns it before you buy it.

Not all mortgages are built the same. Here's what the acronyms actually mean and which buyer each one fits.

1099 Loan

Plain English: A loan for independent contractors who get 1099s instead of W2s. The lender qualifies you off the gross 1099 income with a flat expense factor, instead of digging through Schedule C write-offs. Powerful for high earners with heavy deductions.

Adjustable Rate Mortgage (ARM)

Plain English: A loan whose rate is fixed for an initial period (5, 7, or 10 years) and then adjusts based on a market index. A 7/6 ARM is fixed for 7 years, then adjusts every 6 months. Useful if you know you're moving or refinancing within the fixed window.

Bank Statement Loan

Plain English: A loan tailored for self-employed buyers where the lender looks at 12 to 24 months of business bank deposits to calculate income, rather than relying on tax returns (which usually show heavy write-offs).

Bridge Loan

Plain English: A short-term loan that lets you tap the equity in your current house to use as a down payment on your next house before you sell. This is the secret weapon for buying before you sell.

Conforming Loan Limit

Plain English: The maximum loan amount Fannie Mae and Freddie Mac will buy from a lender. Set annually by the FHFA, it's $832,750 for most counties in 2026 (higher in designated high-cost areas). Anything above this becomes a Jumbo loan with stricter rules.

Construction Loan

Plain English: A short-term loan that funds the building of a home in stages (called draws). When the home is finished, the construction loan converts into or is replaced by a permanent mortgage. Common with custom builds in Cedar City and Iron County.

Conventional Loan

Plain English: The standard mortgage. It isn't backed by the government. It generally requires better credit than an FHA loan but can be cheaper over time because mortgage insurance drops off once you have 20% equity. Run the Conventional math here.

DSCR Loan

Plain English: A rental property loan that qualifies you off the property's expected rent instead of your personal income. DSCR stands for Debt Service Coverage Ratio. If the rent covers the mortgage payment, you can usually get the loan. Popular with investors.

FHA Loan

Plain English: A government-backed loan designed to help buyers with lower credit scores or smaller down payments (as low as 3.5%). The catch? You pay a mandatory mortgage insurance premium (MIP) usually for the life of the loan. Run the FHA math here.

Fixed Rate Mortgage

Plain English: The straightforward loan. Your interest rate is locked for the entire term (most often 30 years). Your principal and interest payment never changes. Property taxes and insurance can still drift, but the loan portion is bolted down.

HELOC (Home Equity Line of Credit)

Plain English: A credit card attached to your house. You get a line of credit based on your home's equity, and you only pay interest on what you actually borrow. Often used by buyers accessing equity for a down payment.

Home Equity Loan

Plain English: Different from a HELOC. This is a fixed-rate, lump-sum second mortgage. You take all the cash up front and pay it back on a fixed schedule. Good for one big known expense (renovation, debt consolidation).

Jumbo Loan

Plain English: A loan for an amount larger than the standard limits set by Fannie Mae and Freddie Mac. Jumbos require stricter credit, heavier cash reserves, and usually larger down payments. Common on St. George luxury homes and second homes in Ivins.

New Construction Purchase Loan

Plain English: A purchase loan structured for a home that hasn't been built yet. The big differentiator is the extended rate lock (often 9 months to a year), so your rate is protected while the builder finishes the house. See new construction buyer notes.

Non-QM Loan

Plain English: "Non-Qualified Mortgage." The umbrella term for loans that don't fit the standard rulebook (Bank Statement, 1099, DSCR, asset-based, etc.). Higher rates, more flexibility. Usually the right tool for self-employed and unconventional income buyers.

Refinance (Rate-and-Term vs. Cash-Out)

Plain English: A refinance replaces your old loan with a new one. Rate-and-term just changes your rate or length. Cash-out increases the balance and gives you the difference in cash. Rules and pricing differ between the two.

Reverse Mortgage

Plain English: A loan for homeowners 62+ that converts home equity into cash (or a line of credit). Instead of you paying the bank monthly, the bank pays you, and the loan balance grows over time. Often discussed in retirement downsizing scenarios.

USDA & VA Loans

Plain English: Specialized zero-down loans. USDA is for rural properties (yes, large parts of Iron County and outlying Southern Utah qualify). VA is exclusively for military veterans and active duty. Check out the Zero Down Calculator.

How the bank views your financial life before they write the check. The numbers behind the approval.

Appreciation

Plain English: How much your home's value grows over time. Southern Utah has historically seen strong appreciation, which builds your equity without you doing anything.

Asset Statements

Plain English: Two months of full bank statements (every page, even the blank ones). Lenders use them to verify you have the money for down payment and closing, and to confirm no surprise large deposits that would need to be sourced.

Compensating Factors

Plain English: The strengths in your file that let an underwriter approve you when one number is borderline. Big reserves, long job history, low LTV, and high credit can all balance out a higher DTI.

Credit Score vs. Mortgage Score

Plain English: That free score on your credit card app? That's usually a consumer model (VantageScore). Mortgage lenders use specialized FICO models (typically FICO 2, 4, and 5) that focus strictly on how you handle debt. Your mortgage score is almost always slightly different than your app score.

Debt-to-Income Ratio (DTI)

Bank Speak: Your total monthly debt obligations divided by your gross monthly income.
Plain English: The most important math equation in lending. If you make $10,000 a month before taxes, and your car loan, student loans, and new mortgage payment total $4,000... your DTI is 40%. Lenders cap this strictly depending on the loan program.

Front-End vs. Back-End DTI

Plain English: Front-end DTI is just your housing payment as a percentage of income. Back-end DTI adds in every other monthly debt. Most programs only care about the back-end number, but FHA and a few niche products still look at both.

Gift Funds

Plain English: Money a relative gives you toward your down payment or closing costs. The lender will require a signed gift letter and proof the money came from the giver's account. It cannot be a loan in disguise.

Hard Inquiry vs. Soft Inquiry

Plain English: A hard inquiry happens when a lender pulls your full credit report to make a decision. It can ding your score a few points. A soft inquiry (like checking your own credit) does not. All mortgage hard pulls within 45 days count as a single inquiry, so shop without fear.

Loan-to-Value Ratio (LTV)

Bank Speak: The ratio of the loan amount to the appraised value of the property.
Plain English: If you buy a $500,000 house and put down $100,000 (20%), your loan is $400,000. Your LTV is 80%. High LTV equals higher risk for the bank, which usually means paying mortgage insurance.

Pre-Approval vs. Pre-Qualification

Plain English: Pre-qualification is the lender saying, "Based on what you told me, you look good." Pre-approval is the lender saying, "I've checked your W2s, pulled your credit, and verified your assets. You are fully greenlit to shop." Never shop on just a pre-qualification in Southern Utah's market.

Qualifying Income

Plain English: The income the underwriter can actually use, not what you grossed last year. For W2 borrowers it's usually base pay plus a 2-year average of any bonus or overtime. For self-employed, it's net income from tax returns plus add-backs like depreciation.

Reserves

Plain English: The liquid cash you have left in the bank after you've paid your down payment and closing costs. Lenders want to see you have an emergency fund (usually measured in "months of mortgage payments"). Retirement accounts often count at a discount.

Tri-Merge Credit Report

Plain English: The mortgage credit report combines all three bureaus (Equifax, Experian, TransUnion) into one pull. Lenders use the middle of your three FICO scores. If you have a co-borrower, they use the lower of the two middle scores.

Where the cash comes from, how much you actually need, and how to use what you already have.

Cross-Collateralization

Plain English: Using equity in one property as security for a loan on another. Less common today than the equity-tap strategies, but still shows up in some portfolio loans for buyers with multiple properties.

Down Payment

Plain English: The cash you bring to the table at closing, expressed as a percentage of purchase price. Common floors: 0% (VA, USDA), 3% (conventional first-time buyer programs), 3.5% (FHA), 5% to 20% (conventional), 25%+ (investment, jumbo).

Down Payment Assistance (DPA)

Plain English: A grant or second-lien loan from a state or local agency that covers part or all of your down payment. Utah Housing Corporation runs several. Each has its own income limits, credit minimums, and home price caps.

First Home Loan / UHC 1st Home

Plain English: Utah Housing Corporation's flagship zero-down program for first-time buyers. They cover the down payment with a small second mortgage. Income and price limits apply. Run the math on the Zero Down Calculator.

Net Equity

Plain English: Your equity minus the cost of selling. Home worth $500k, mortgage of $300k, and roughly 7% selling costs? Your net equity is closer to $165k than $200k. Always plan with net.

Recasting

Plain English: Throwing a large lump sum at your principal after closing, then asking the lender to re-amortize. The rate stays the same, the balance drops, and the monthly payment shrinks. Common after a buyer sells their previous home and wants to lower the new payment.

Seasoning

Plain English: How long money has been sitting in your account. Lenders generally want to see funds "seasoned" for 60 days. Surprise deposits inside that window have to be sourced and explained.

Sourcing & Seasoning

Plain English: The pair of underwriting tests applied to your money. Sourcing proves where it came from. Seasoning proves it sat there long enough. A $20k Venmo from your brother needs both a gift letter (source) and time on the account (season).

What exactly are you paying for when you wire funds on closing day?

Cash to Close

Plain English: The exact dollar amount you have to wire to the title company on closing day. It is your Down Payment + Closing Costs - Earnest Money - Seller Credits. See how it works in the Buy Before You Sell Calculator.

Closing Costs

Plain English: The collective group of fees to do the transaction. It includes lender fees, title insurance, appraisal, county recording taxes, and pre-paying your property taxes. Generally expect 2% to 4% of the loan amount in Southern Utah.

Discount Points (Buying Down the Rate)

Plain English: Paying the bank upfront cash at closing to lower your permanent interest rate. One point equals 1% of your loan amount. It's only worth doing if you plan to stay in the home long enough to recoup the upfront cost via monthly savings (called the breakeven point).

Earnest Money

Plain English: A "good faith" deposit you make when a seller accepts your offer. It proves you are serious. If you close, the money goes toward your down payment. If you walk away without a legal reason, the seller keeps it. Typical in Southern Utah is 1% of purchase price.

Lender Credit

Plain English: The opposite of points. The lender pays some of your closing costs in exchange for a slightly higher interest rate. Useful when cash to close is tight or when you plan to refinance soon anyway.

Loan Estimate (LE)

Plain English: A standardized 3-page form lenders are required to give you within 3 business days of application. It shows the rate, monthly payment, and estimated cash to close. Use it to compare two lenders apples-to-apples (this is exactly what APR was built for).

Net Proceeds

Plain English: The actual cash you walk away with when selling a house, after paying off your current mortgage, agent commissions, and title fees. Check the Downsize Calculator to see yours.

Origination Fee

Plain English: A flat fee the lender charges to originate, process, and underwrite your loan. Sometimes called a "1% origination" or shown on the LE in section A. Always negotiable. Always.

Prepaids

Plain English: Money collected at closing to fund your escrow account so the lender can pay your taxes and insurance later. They aren't really "fees," they're just future payments paid now. Most buyers are surprised by how big the prepaid bucket is.

Recording Fees & Transfer Tax

Plain English: Fees the county charges to record the deed and the new mortgage in the public record. Utah does not have a state real estate transfer tax (a quiet win compared to several neighboring states).

Seller Concessions

Plain English: When the seller agrees to pay some of your closing costs as part of the deal. Each loan program caps how much the seller is allowed to credit you. Conventional caps depend on down payment. FHA allows up to 6%.

Title Insurance

Plain English: A one-time fee paid at closing that protects you (owner's policy) and the lender (lender's policy) just in case someone comes out of the woodwork years later claiming they legally own your house because of a forged document in 1994. Essential protection.

The fine print terms that dictate who has the power in the transaction.

Acceleration Clause

Plain English: The provision in your loan that lets the lender demand the entire balance immediately if you default. It's how foreclosure starts. Standard on every mortgage in America.

Builder Incentive

Plain English: When a new construction builder offers to pay your closing costs, but only if you use their preferred lender. Sometimes it's a great deal. Often, the preferred lender just inflates your interest rate to cover the "free" money. Always run the LE comparison.

CC&Rs (Covenants, Conditions & Restrictions)

Plain English: The HOA rulebook attached to the property, recorded against the title. Read these before you remove your due diligence contingency. They control short-term rentals, ADUs, paint colors, RV parking, the works.

Contingency

Plain English: A legal escape hatch in your contract. A financing contingency says "I buy this only if my loan is approved." A sale contingency says "I buy this only if my current house sells first." As a Dual-Licensed Coordinator, I work to remove these so your offers are stronger.

Easement

Plain English: The right of someone else to use part of your land for a specific purpose. Common ones: utility lines, shared driveways, conservation easements. They show up on the title commitment and travel with the property forever.

Encroachment

Plain English: When a structure (a fence, a shed, a corner of the neighbor's garage) crosses onto a property where it doesn't legally belong. The survey or title commitment usually flags it. Sometimes solved with an easement, sometimes with a teardown.

Escalation Clause

Plain English: A buyer-side offer term that automatically increases your bid up to a cap if a competing offer comes in. Powerful in multiple-offer markets. Risky if you don't structure it right.

MIP (Mortgage Insurance Premium)

Plain English: The FHA version of PMI. Unlike Conventional PMI, FHA MIP generally stays on the loan for its entire life, unless you refinance out of it later. There's also an UFMIP (upfront premium) that's typically rolled into the loan balance.

Occupancy Clause

Plain English: The promise you sign that you intend to live in the home as your primary residence for at least 12 months. Lying on this is occupancy fraud, a federal crime. Don't even joke about it. Investment loans exist for a reason.

PMI (Private Mortgage Insurance)

Plain English: A monthly fee you pay if you put down less than 20% on a conventional loan. It does absolutely nothing for you. It protects the lender if you default. It automatically falls off once you hit 22% equity, and you can request removal at 20%.

Prepayment Penalty

Plain English: A fee charged if you pay off the loan early (usually within the first 3 years). Standard residential loans in Utah do not have these. Some Non-QM and DSCR loans do. Always ask, always read.

Rate Lock

Plain English: A guarantee from the lender that your interest rate won't change before closing, even if the market panics. Usually 30 to 60 days for resale, but new construction buyers often need extended 9-month rate locks.

Temporary Buydown (2-1, 3-2-1)

Plain English: A program where the seller pre-pays a chunk of your interest, lowering your effective rate for the first 1, 2, or 3 years. A "2-1 buydown" means year 1 is 2% below note rate, year 2 is 1% below, year 3 onward is the actual rate. Great for sellers needing to move and buyers expecting income growth.

The milestones you hit from contract to keys.

Appraisal

Plain English: The bank hiring a neutral third-party expert to verify the home is actually worth what you agreed to pay for it. The bank won't lend you $500k on a house that's only worth $400k. In Southern Utah, expect a 5-10 business day turnaround typically.

Appraisal Gap

Plain English: The shortfall when the appraisal comes in below the contract price. Buyer can renegotiate, walk (if contingency intact), or cover the gap in cash. Some offers include an "appraisal gap" promise to bridge a defined dollar amount.

CD (Closing Disclosure)

Plain English: A 5-page document you must legally receive exactly 3 business days before closing. It outlines the final loan terms, your exact monthly payment, and the penny-perfect Cash to Close amount. The 3-day rule is non-negotiable, and any major change resets the clock.

Clear to Close (CTC)

Plain English: The three best words in real estate. It means the underwriter has reviewed everything, has no more questions, and has authorized the title company to draft the final paperwork for you to sign.

Conditional Approval

Plain English: The underwriter likes your file but has a list of remaining items (called "conditions") to clear before final approval. Usually paystubs, an updated bank statement, an LOE about a deposit. Knock these out fast and you get to CTC fast.

Dual-Licensed Coordinator

Plain English: Me. Someone licensed to act as both your Realtor and your Mortgage Lender, removing the communication gaps between sides and aligning both timelines perfectly. Read why this matters and how it's structured ethically.

Due Diligence Period

Plain English: The window after offer acceptance where you inspect the property, review CC&Rs, and decide whether to proceed. In Utah, this is usually 7 to 14 days. Walking away during due diligence typically returns your earnest money.

Funding & Recording

Plain English: Signing papers doesn't get you the keys. Funding is when the bank wires the money. Recording is when the county officially stamps your name into the public record as the owner. Then you get the keys.

Inspection

Plain English: A physical walkthrough by a licensed inspector who looks at the roof, foundation, plumbing, electrical, HVAC, and major systems. Separate from the appraisal. Buyer pays. Almost always worth the $400 to $600.

Letter of Explanation (LOE)

Plain English: A short signed statement explaining something on your file: a credit inquiry, a large deposit, a gap in employment, an address that doesn't match your driver's license. Underwriters need a paper trail for everything that looks unusual.

Settlement Statement

Plain English: The detailed accounting of every dollar moving on closing day, line by line. Buyer side and seller side. The CD covers your loan side; the settlement statement is the broader transaction view.

Underwriting

Plain English: The behind-the-scenes part of the bank where human analysts review your tax returns, bank statements, and the appraisal to make the final decision: "Yes, we will give them the money." This is where most "delays" happen, and where having a real human lender matters most.

The phrases lenders and agents say to each other but rarely translate for clients. Now you'll catch them.

Above & Below the Line

Plain English: Loan officer slang for items above the closing line (lender fees you can negotiate) versus below the line (third-party fees like title and recording, basically fixed). Helpful when shopping lenders, since only "above the line" varies.

Comp / Comparable Sale

Plain English: A recently sold home similar to yours used to estimate value. Appraisers and agents both lean on comps. In a thin market like rural Iron County, finding good comps is half the battle.

DPOA (Durable Power of Attorney)

Plain English: A legal document letting someone sign closing papers on your behalf if you can't be present. Lenders need to approve the specific POA language before closing. Don't assume yours will work without lender review.

DU / LP (Desktop Underwriter / Loan Prospector)

Plain English: The automated underwriting engines from Fannie Mae (DU) and Freddie Mac (LP). Your loan officer runs your file through these and gets an "Approve/Eligible" or "Refer" finding. That single line of output sets the tone for the whole approval.

Float vs. Lock

Plain English: "Float" means you haven't locked your rate yet and you're betting it will improve. "Lock" means you've committed. Most buyers should lock when their offer is accepted unless they have a specific market read.

LLPAs (Loan Level Price Adjustments)

Plain English: The risk-based pricing hits Fannie and Freddie tack onto your rate based on credit score, LTV, occupancy, and property type. Two buyers at the same lender on the same day can get very different rates. LLPAs are why.

NMLS Number

Plain English: The Nationwide Mortgage Licensing System ID assigned to every licensed loan officer. Mine is NMLS #1794818. You can look any lender up at nmlsconsumeraccess.org and verify their license, history, and complaints.

On the Wire

Plain English: Industry slang for "the file is at the closing table." When your loan officer says you're on the wire, the funds are about to move. Watch for wire fraud scams during this window. Always verify wiring instructions by phone using a number you already have.

Owner-Occupied vs. Second Home vs. Investment

Plain English: Three different occupancy types, three different rate sheets. Owner-occupied is the cheapest. Second home (you live there part of the year, never rent it short-term) is slightly higher. Investment is the most expensive. Misclassifying is fraud (see Occupancy Clause).

Pricing Hit

Plain English: A small markup to your rate caused by an LLPA. "You're taking a 0.25 hit for the second home." Hits stack. A second-home jumbo with a 700 score and 80% LTV can easily layer three or four hits.

TBD Approval (Property TBD)

Plain English: A full credit-and-income approval done before you've identified the property. The underwriter has cleared everything except the appraisal. Strongest possible pre-approval letter you can carry into a Southern Utah multiple-offer situation.

Wire Fraud

Plain English: Scammers spoofing the title company's email and sending you fake wiring instructions right before closing. It is the #1 financial crime in real estate. Always call to verify wire instructions using a number you got before the email arrived.