Client Resources
Most of what makes a loan go smoothly is knowing what's coming. Here's the reference material I find myself sending people most often — plain-English definitions, a word about your credit, and the tools worth running before we talk.
Where to start
If you're early and just gathering information, start with the numbers. If you already know roughly what you're doing, go straight to the program that matches your situation.
Run your own numbers
Four calculators covering the questions I get asked most — payment, price range, refinance break-even, and available equity.
Read up on the loan itself
What each type of financing actually is, who it tends to fit, and the questions people ask me about it.
Know where your credit stands
Credit is one of the few things you can improve before you ever apply, and it's worth a look early — not because a number decides everything, but because errors are common and they take time to correct. Pull your report, read it, and flag anything that doesn't look like you.
Clients ask me where to go for this. I point them to SmartPay — a third-party service where you can pull and monitor your own credit report for a small fee, without me or anyone else involved. If something on your report looks wrong, or your score isn't where you want it before you buy, send me a message and we'll talk through what actually moves the needle.
One thing worth saying plainly: a mortgage credit check is a normal part of getting pre-approved, and it isn't something to be afraid of. I'd rather see the real picture up front than find a surprise once you're in contract.
Mortgage terms, in plain English
The mortgage business runs on shorthand, and nobody should have to nod along to it. These are the terms that come up most, defined the way I'd explain them across a table. They're general definitions for education, not guidance on your specific file — details vary by program and lender, which is what our conversation is for.
A
- Adjustable-Rate Mortgage (ARM)
- A loan whose rate is fixed for an initial period and then adjusts on a set schedule after that, based on an index plus a margin spelled out in your loan documents. The starting rate is often lower than a comparable fixed rate; the trade-off is that your payment can change later.
- Amortization
- The schedule that spreads your loan payoff across the full term. Early payments go mostly toward interest and later ones mostly toward principal, which is why the balance comes down slowly in the first few years.
- Annual Percentage Rate (APR)
- A single number meant to express the yearly cost of a loan by folding certain financing costs in with the interest rate. It is not the same as your interest rate — the rate determines your payment, while APR is a comparison tool. Because lenders don't all include the same fees, compare the rate, the APR, and the itemized costs together.
- Appraisal
- An independent opinion of a property's value prepared by a licensed appraiser and ordered through the lender. On a purchase, the loan is generally based on the appraised value or the contract price, whichever is lower.
C
- Cash-Out Refinance
- Refinancing for more than you currently owe and taking the difference as cash, secured by the equity in your home. It replaces your existing mortgage with a new one rather than adding a second loan on top of it.
- Closing Costs
- The one-time costs due at closing to originate the loan and transfer the property — lender fees, title and escrow charges, the appraisal, recording fees, and prepaid items like taxes and insurance. Depending on the transaction, they can be paid out of pocket, covered in part by seller or lender credits, or in some cases financed into the loan.
- Conventional Loan
- A mortgage that isn't insured or guaranteed by a government program like FHA, VA, or USDA. Most conventional loans are written to Fannie Mae or Freddie Mac guidelines.
- Credit Score
- A number lenders use to summarize how you've handled credit over time. Mortgage lenders typically pull all three bureaus and work from the middle of the three scores; how a file with two borrowers is scored depends on the program's guidelines.
D
- Debt-to-Income Ratio (DTI)
- Your monthly debt payments — including the proposed housing payment — divided by your gross monthly income. It's one of the main things underwriting weighs, and the acceptable limit depends on the loan program and the strength of the rest of your file.
- Discount Points
- An optional up-front fee paid to the lender in exchange for a lower interest rate. One point equals one percent of the loan amount, and whether paying points makes sense depends largely on how long you expect to keep the loan.
- Down Payment
- The portion of the purchase price you pay yourself instead of borrowing. Minimums vary by loan program, and a larger down payment generally means a smaller loan, a lower payment, and more pricing options.
- DSCR Loan
- Short for debt service coverage ratio — an investment property loan qualified on how the property's rental income compares to its payment, rather than on your personal income documents. It's a common path for investors whose tax returns don't reflect their real buying power.
E
- Equity
- The difference between what your home is worth and what you still owe against it. It grows as you pay the balance down and moves with the property's value.
- Escrow
- In a California transaction, escrow is the neutral third party that holds funds and documents until everything closes. The word is also used for the impound account some loans carry after closing, where the lender collects a portion of your property taxes and insurance with each payment and pays those bills when they come due.
F
- FHA Loan
- A mortgage insured by the Federal Housing Administration. FHA guidelines are generally more flexible on down payment and credit than conventional guidelines; in exchange, FHA loans carry mortgage insurance premiums.
- Fixed-Rate Mortgage
- A loan whose interest rate — and therefore its principal-and-interest payment — stays the same for the entire term. Property taxes, insurance, and HOA dues can still change, so the total payment isn't necessarily frozen.
H
- Home Equity Line of Credit (HELOC)
- A revolving credit line secured by your home's equity. You draw from it as needed during a set draw period and then repay it, and the rate is commonly variable rather than fixed.
- Home Equity Loan (HELOAN)
- A loan that gives you a lump sum against your equity, repaid on a set schedule, while leaving your existing first mortgage in place. It's the fixed-payment alternative to a HELOC.
J
- Jumbo Loan
- A loan larger than the conforming limit for the county where the property sits — a limit that's set annually and differs by county. Jumbo loans come up constantly in Orange County price ranges, and because they fall outside Fannie Mae and Freddie Mac guidelines, the requirements are set by the individual lender.
L
- Loan Estimate (LE)
- A standardized federal form showing the estimated rate, payment, and closing costs on a specific loan offer. Because every lender uses the same format, it's the right document to put side by side when you're comparing quotes.
- Loan-to-Value Ratio (LTV)
- The loan amount divided by the property's value, written as a percentage. A lower LTV means more equity in the deal, which generally opens up better pricing and more program options.
M
- Mortgage Insurance (PMI / MIP)
- Insurance that protects the lender — not you — if a loan defaults. It's typically required when the down payment or equity position is small. On conventional loans it's called PMI and can generally be removed once you've built enough equity; FHA's version is called MIP and follows its own rules.
N
- Non-QM Loan
- A loan that falls outside the Qualified Mortgage standards, usually because income is documented differently — bank statements, assets, or rental income instead of W-2s and tax returns. Non-QM isn't the same thing as subprime; it's a different documentation path for borrowers whose income is real but doesn't fit a standard form.
P
- PITI
- Principal, interest, taxes, and insurance — the four pieces of a typical housing payment. Add mortgage insurance and HOA dues where they apply, and that's the number worth budgeting around, not principal and interest alone.
- Pre-Approval
- A lender's review of your actual documents — income, assets, and credit — resulting in a letter stating what you're approved to borrow, subject to a property and final underwriting. It's what listing agents expect to see attached to an offer.
- Pre-Qualification
- A quick estimate based on figures you state rather than documents anyone has verified. It's a fine starting point for your own planning, but it carries far less weight with a seller than a pre-approval.
R
- Rate Lock
- The lender's commitment to hold your interest rate for a set number of days while the loan is processed. If the lock would expire before closing, extending it usually costs something, so lock periods get matched to the timeline of the transaction.
- Refinance
- Replacing your existing mortgage with a new one — to change the rate, change the term, switch loan types, or take cash out. It's an entirely new loan with its own costs, not an adjustment to the old one.
T
- Title Insurance
- A policy that protects against problems in a property's ownership history — undisclosed liens, recording errors, competing claims. Lenders require a policy protecting their interest; an owner's policy protects yours.
U
- Underwriting
- The stage where the lender verifies your income, assets, credit, and the property, then decides whether the file meets guidelines. Requests for additional documents during underwriting are routine, not a sign something's wrong.
V
- VA Loan
- A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans, service members, and certain surviving spouses. Its best-known features are that many purchases require no down payment and that VA loans carry no monthly mortgage insurance.
Run into a term that isn't here? Ask me — or read how it fits into an actual loan on the loan programs pages.
Still have questions? That's what I'm here for.
Reading is a good start. A ten-minute conversation usually gets you further — no pressure, no obligation to do anything with me.
- Call or text
- (949) 744-5302
- Office
- 17911 Von Karman Ave, Suite 400
Irvine, CA 92614