Glossary • Mortgage terms, decoded in plain English.

These are the questions we hear most often from real borrowers. Click any term to see what it means and how it affects your loan.

Tip: If you don’t see a term you’re wondering about, just ask—we’ll add it.

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Filtering our most-asked glossary terms for you.

Amortization

How your loan balance shrinks over time

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Amortization is the schedule for how your loan is paid down over time. Each monthly payment includes some interest and some principal, and amortization shows how your balance slowly drops month by month.

Annual Percentage Rate (APR)

Total cost of the loan, not just rate

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APR measures the overall cost of a loan over a year, including interest and certain fees. It’s designed to help you compare one loan to another, beyond just the interest rate.

Appraisal

A professional opinion of value

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An appraisal is a licensed appraiser’s opinion of what a property is worth in today’s market. Lenders use it to confirm that the home’s value supports the loan amount.

Adjustable-Rate Mortgage (ARM)

A rate that can change over time

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An adjustable-rate mortgage starts with a fixed rate for a set period, then can adjust up or down at set times. It can be a great fit if you’re not planning to keep the loan long term and are comfortable with potential changes later.

Assessed Value

Value used to calculate property taxes

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Assessed value is what your local county or municipality says your property is worth for property tax purposes. It often differs from both the appraised value and what the home could sell for on the open market.

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Information is for educational purposes only and is not a commitment to lend. Programs, rates, and terms are subject to change without notice. Eligibility, underwriting, and documentation requirements vary by lender, investor, and location. All loans subject to credit and collateral approval. All loans subject to approval. Equal Housing Lender.