Glossary of Mortgage Terms

Mortgage insurance is a way for lenders to protect themselves from losing money if a borrower doesn't pay back their loan. The type of mortgage insurance depends on the loan program used to buy the home.

The mortgage interest deduction is a federal tax break that lets homeowners who itemize their deductions take the interest they paid on a qualifying home loan off of their taxable income. This lowers the amount of income tax they owe.

An investor in mortgages buys home loans from lenders on the secondary market. This gives those lenders more money to make new mortgages for home buyers.

A mortgage loan originator (MLO) is a licensed professional or lending institution that helps people who want to buy a home apply for, process, and close a mortgage loan.

The mortgage maturity date is the exact date on the calendar when you have to make your last loan payment and pay off your mortgage in full.

A mortgage note is a legal document that a borrower signs at closing. It promises to pay back a home loan according to certain terms, such as the interest rate, payment schedule, and total amount owed.

A mortgage payoff statement is a document from your loan servicer that shows the exact amount of money you need to pay to close out your mortgage in full on a specific date.

A lender's conditional promise to lend you a certain amount of money to buy a home is called mortgage preapproval. This is based on a verified review of your income, credit, debts, and assets.

Mortgage prequalification is a lender's estimate of how much you can borrow to buy a home, based on basic financial details you share before you formally apply for a loan.

Mortgage protection insurance is an optional policy that helps your family keep the home by paying off part or all of your mortgage balance if you die, become disabled, or lose your job.