Glossary of Mortgage Terms

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.

A mortgage rate is the interest a lender charges you to borrow money for a home purchase or refinance, expressed as a yearly percentage of your loan balance.

A mortgage rate lock is an agreement between you and your lender that keeps your interest rate the same for a certain number of days. This protects you from changes in the market while your loan is being processed.

A mortgage recast is when you make a large lump-sum payment toward your loan balance and your lender recalculates your monthly payment based on the lower amount you owe.