Glossary of Mortgage Terms

A single-family home is a freestanding residential property built on its own lot, designed to house one household, with no shared walls, roof structures, or utilities connecting it to another dwelling.

The Secured Overnight Financing Rate (SOFR) is a standard interest rate that is set based on overnight rates. Lenders use U.S. Treasury repurchase agreements to set rates on adjustable-rate mortgages and other loans.

A spec house is a new home built by a builder or developer without a specific buyer in mind. It is meant to be sold on the open market based on current real estate demand and popular design trends.

Your local government uses a special assessment tax, which is an extra charge on your property tax bill, to pay for a specific neighborhood improvement, such as new roads or sewer lines.

A timeshare is a vacation property that several people own and share. Each owner buys the right to use a resort unit for a set amount of time each year, and they all pay for it and have access to it.

A townhouse is a multilevel, single-family home that shares one or more walls with neighboring homes. It has its own private entrance, the owner owns the land beneath it, and it is a unique mix of space and affordability.

TRID stands for the TILA-RESPA Integrated Disclosure rule, a federal regulation that requires mortgage lenders to give borrowers standardized Loan Estimate and Closing Disclosure forms so they can compare costs and understand loan terms before signing.

A turnkey property is a home that's fully updated and move-in ready, so the buyer can start living there right away without doing any repairs or renovations.

The upfront mortgage insurance premium, or UFMIP, is a one-time fee of 1.75% of your base loan amount that all FHA borrowers pay at closing to protect the lender if you default on your mortgage.

A USDA construction loan is a government-backed mortgage that lets qualified borrowers buy land and build a new main home in a rural area that meets certain requirements. There is no down payment and only one closing.