Glossary of Mortgage Terms

Debt service is the total amount of money you need to cover all your loan payments, including both principal and interest, over a set period of time.

A debt-to-income ratio (DTI) is a percentage that compares your total monthly debt payments to your gross monthly income. Lenders use it to figure out how much mortgage you can afford.

A deed in lieu of foreclosure is a voluntary agreement between a homeowner and their mortgage lender in which the homeowner gives the lender ownership of the property in order to pay off the loan and avoid the formal foreclosure process.

When you pay off your mortgage or deed of trust in full, a deed of reconveyance is a legal document that gives you back the title to your property.

A deed of trust is a legal paper used in real estate deals that gives the title to a property to a neutral third party, called a trustee, as security until the borrower pays off their home loan.

A defeasance clause in your mortgage contract says that once you pay off the loan in full, you will own your home completely.

Delayed financing means buying a house with cash and then getting a mortgage shortly after closing. This way, you get back most or all of the money you put in.

Digital real estate is a term for online assets and virtual properties that have value and can make money or go up in value over time. These include websites, domain names, social media accounts, and virtual land in the metaverse.

A discount point is a fee equal to 1% of your loan amount that you pay at closing to permanently reduce your mortgage interest rate for the life of the loan.

A down payment is the money a home buyer puts down up front toward the purchase price. The rest of the money is borrowed from a lender in the form of a mortgage.