Last updated: October 2026 · Editorial standards The mortgage industry is full of acronyms and jargon that can be overwhelming for first-time buyers. Here are 75 essential terms explained in plain language. A Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that changes periodically based on a market index. Usually starts with a fixed…
Last updated: October 2026 · Editorial standards Private mortgage insurance (PMI) is a significant monthly cost — but it’s not permanent. Once you’ve built enough equity in your home, you have the right to have it removed. Here’s exactly how to do it. The Two Ways PMI Ends 1. Automatic Cancellation (Required by Law) Under…
Last updated: October 2026 · Editorial standards Private mortgage insurance is one of the most significant hidden costs of homeownership for buyers who put less than 20% down. Here’s what it costs, why lenders require it, and how to avoid it. What Is PMI? Private mortgage insurance (PMI) is insurance that protects your lender —…
Last updated: October 2026 · Editorial standards When you have a mortgage, you’ve probably heard the term «escrow» — but it’s used in two different ways in the home buying process, and understanding both will prevent surprises. Two Types of Escrow in Real Estate 1. Escrow at closing: When you make an offer and it’s…
Last updated: October 2026 · Editorial standards An adjustable-rate mortgage (ARM) has an interest rate that changes over time — unlike a fixed-rate mortgage, which locks your rate for the entire loan term. ARMs start with a lower fixed rate for an initial period (typically 5, 7, or 10 years), then adjust annually based on…
The difference between a 15-year and 30-year mortgage is simple to understand and harder to decide. The 15-year saves an enormous amount of interest and builds equity twice as fast. The 30-year has a lower payment and more cash flow flexibility. Neither is universally better — the right answer depends on your financial situation, stability,…
«Escrow» appears at two different points in the homebuying process, and they’re not the same thing. The first is a purchase escrow — the neutral third-party account that holds your earnest money deposit during the transaction. The second is a mortgage escrow account — the ongoing account your lender uses to collect property taxes and…
When you get a mortgage rate quote, your lender will often offer a menu of options: pay more upfront and get a lower rate, or pay less upfront and get a higher rate. The upfront payment that buys down your rate is called mortgage points — or discount points. Whether paying points makes financial sense…
Private mortgage insurance is one of the most misunderstood costs in homebuying. Buyers either don’t know it exists until closing day, or they avoid it at all costs when avoiding it doesn’t actually make financial sense. Here’s the full picture. What PMI Is — and What It Isn’t PMI is insurance that protects your lender…
When a lender tells you that you qualify for a $400,000 mortgage, they’re not telling you your monthly payment will be based solely on that loan amount and your interest rate. Your actual monthly housing cost — and the number lenders use to evaluate whether you can afford the loan — is PITI. PITI stands…