Mortgage Basics

Separate sheet attached to a paper mortgage note to carry one or more note endorsements.

Amortization period is the repayment span used to calculate payments that would reduce a mortgage balance to zero.

Mortgage company that originates, funds, and closes loans in its own name for later sale to another lender or investor.

Signature and transfer language placed on a paper mortgage note or attached allonge to document note rights.

Payment pattern using two mortgage transfers each calendar month, usually 24 per year.

A loan application packet is the organized set of financial, identity, and transaction documents a borrower gathers to support mortgage review.

Mortgage principal before a financed program charge, most often used to distinguish an FHA base mortgage from the total amount after UFMIP.

Party that extends covered mortgage credit and to whom the debt is initially payable at consummation.

A borrower authorization permits specified mortgage participants to obtain, verify, or share information needed to process the loan.

A credit authorization permits a lender to obtain credit-report information for mortgage qualification, underwriting, or closing review.

A loan file is the complete origination record used to document the application, verification, underwriting decision, disclosures, and closing.

A loan number identifies a mortgage application or servicing account across the correct records, documents, communications, and payments.

Loan purpose classifies a mortgage as a purchase, refinance, cash-out refinance, construction, or other transaction and affects how it is reviewed.

A mortgage commitment states the lender's willingness to fund a loan under specified terms and conditions but may still require final items before closing.

An occupancy statement records how the borrower intends to use the financed property and supports the lender's occupancy classification.

The Uniform Residential Loan Application organizes borrower, property, transaction, and financial information for mortgage review.

Mortgage interest that has accumulated for a period but has not yet been paid.

A mortgage amortization schedule shows each projected payment's principal, interest, and remaining-balance allocation.

Large lump-sum mortgage payment due at a set point, often at maturity of a balloon loan.

Payment pattern using one-half of the monthly mortgage amount every two weeks.

Person or entity obligated to repay a mortgage under the loan documents.

Property pledged to support mortgage repayment, giving the lender a claim if the loan is not repaid.

Mortgage interest attributable to one day under the loan's balance, rate, and day-count method.

Optional mortgage payment amount directed to reduce principal beyond the scheduled payment.

Primary mortgage loan on a property, usually tied to the first lien position.

Date the first regular mortgage payment is due after closing.

Part of a mortgage payment that covers borrowing cost rather than reducing principal.

Mortgage principal amount borrowed at closing or requested in the loan application.

Mortgage funds advanced at closing and disbursed for the approved purchase, refinance, construction, or equity transaction.

Scheduled date when the mortgage must be fully paid according to the loan documents.

Broad label for a party holding mortgage-loan rights, which may not identify the servicer, note holder, or loan owner precisely.

Borrower's legal duty to repay the mortgage debt and follow the loan terms.

Formal mortgage-document term for the lender-side party receiving the mortgage interest.

Formal mortgage-document term for the borrower or property owner granting the mortgage interest.

Negative amortization happens when unpaid interest is added to the mortgage balance.

Date shown on the mortgage note that helps identify the signed repayment obligation.

Party with holder rights under the mortgage note, which may differ from the servicer or economic loan owner.

Starting mortgage principal balance when the loan closes before later payments change it.

How often mortgage payments are contractually due or voluntarily submitted.

Contractual sequence of mortgage payment amounts and due dates across the loan term.

Amount required to satisfy the mortgage in full on a specific payoff date.

Part of a mortgage payment that reduces the unpaid loan balance.

Contract price for the home before down payment, loan amount, and closing-cost math are applied.

Recalculation of a mortgage payment schedule using the remaining balance, rate, and term.

Time left on the mortgage's scheduled repayment period before the maturity date.

Required mortgage payment amount due under the loan's current payment schedule.

Loan backed by collateral, such as a mortgage secured by a home.

Dollar amount of mortgage interest paid or projected over a stated repayment period.

Electronically signed mortgage promissory note managed as a transferable record rather than as an original paper note.

Mortgage amortization is the scheduled process that reallocates each payment from interest toward principal as the balance declines.

A home loan is residential-property financing used to purchase, refinance, or borrow against a home.

Interest is the dollar charge for using mortgage funds, calculated from the rate, balance, and applicable time period.

Borrower-facing mortgage professional who discusses loan options, assists with the application, and coordinates the origination process.

Loan term is the contractual span from mortgage origination to scheduled maturity.

Monthly mortgage payment is the recurring amount due for loan repayment and any required escrow or insurance components.

A mortgage is a home-secured borrowing arrangement that combines a repayment obligation with a claim against the property.

Borrower's formal request for mortgage credit and the information that starts lender disclosure and review obligations.

Core mortgage terms that explain what the loan is, how repayment works, and who the main borrowing parties are.

Intermediary that helps a borrower compare or place a mortgage with lenders rather than extending the credit directly.

Bank, credit union, or nonbank company that extends and funds mortgage credit for a borrower.

Mortgage-specific promissory note that records the borrower's repayment terms and works with a separate property security instrument.

P&I is the principal-and-interest portion of a mortgage payment, excluding taxes, insurance, and other added housing costs.

Principal is the mortgage debt amount borrowed and still subject to repayment, separate from interest and other charges.

Principal balance is the unpaid portion of the loan principal that the borrower still owes, not including future interest.

Signed promise to repay a debt under stated principal, interest, payment, default, and maturity terms.