Definitions of Common Mortgage Terms

One issue commonly arises when first time home buyers begin their mortgage application process: understanding the definitions of various mortgage terms. If you are not familiar with the process or the industry, there is plenty of jargon that could slow down this process for you. We want you to fully understand these terms and how they apply to you and your future new home.

Definitions

Annual income
Your annual income before taxes. For married couples this is your total combined annual income before taxes.

Purchase price
The price of the home you wish to purchase. This is the actual price you'll pay, not including any closing costs.

Total monthly payment
Total monthly payment that you can qualify for. This is the total of principal, interest, taxes and insurance paid each month. Often called PITI.

Cash on hand
Cash you have for the down payment and all closing costs.

Interest rate
The current annual interest rate you can receive on your mortgage.