Discount points are a one-time, upfront mortgage closing cost that gives a mortgage borrower access to discounted mortgage rates as compared to the market. When discount points are paid, the bank collects a one-time fee at closing in exchange for a lower mortgage rate.

• 1 discount point on a $200,000 loans costs $2,000
• 5 discount points on a $200,000 loan costs $1,000
• 25 discount points on a $200,000 loancosts $500

The closing disclosure list the final numbers of your transaction. Lenders are required to provide your Closing Disclosure three business days before your scheduled closing.

Loan-to-value, or LTV, refers to the relationship between a property’s sales price or appraised value and the amount of loans against it. It’s the mortgage balance / the property value. So a $100,000 house with a $90,000 mortgage against it has an LTV of 90 percent. When there is more than one loan involved, perhaps a first and second mortgage, the calculation is called the combined loan-to-value, or CLTV.

The ratio between a borrower’s monthly payment obligations divided by his or her or gross monthly income.

Deposit in the form check or cashiers check, given to a seller by a buyer as good faith assurance that the buyer intends to go through with the purchase of a property. These funds are typically held with a title company or attorney.

A form of insurance that protects the insured property against physical damage such as fire and tornadoes. Mortgage lenders often require a borrower to maintain an amount of hazard insurance on the property that is equal at least to the amount of the mortgage loan.

When applying for a mortgage loan, borrowers are often required to pay an origination fee to the lender. This fee may include an application fee, appraisal fee, fees for all the follow-up work and other costs associated with the loan.

The lender is using the home as collateral for the mortgage transaction. Because of this, they need to be certain that the title of the property is clear of any liens which could jeopardize the Mortgage. So, lenders will require borrowers to get title insurance on the property, which will ensure that the homes are free and clear.

The lender is using the home as collateral for the mortgage transaction. Because of this, they need to be certain that the title of the property is clear of any liens which could jeopardize the Mortgage. So, lenders will require borrowers to get title insurance on the property, which will ensure that the homes are free and clear.

An estimated value of the property. Based on an appraiser’s knowledge experience and analysis of the property.

Money paid to insure the mortgage when the down payment is less than 20 percent.

Principal interest taxes and insurance. Also called monthly housing expense.