Glossary of Mortgage Terms

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.

Mortgage reinstatement is when a homeowner pays all missed payments, late fees, and related costs in a lump sum to bring a delinquent mortgage back to current status and stop the foreclosure process.

Mortgage seasoning requirements are lender-imposed waiting periods between specific financial events and the approval of a new home loan or refinance transaction.

After you close on your home loan, a mortgage servicing company takes care of it. They handle monthly payments, escrow accounts, and borrower support for the loan's owner.

Mortgage servicing rights give you the right to manage the day-to-day operations of a home loan, such as collecting payments and managing escrow for the loan's owner.