Reference
Mortgage Glossary: Key Home Loan Terms, Defined
Plain-English definitions of the mortgage and home-loan terms Las Vegas buyers meet -- from amortization and DTI to PMI, points, and refinancing.
A
- Adjustable-Rate Mortgage (ARM)
- A mortgage whose interest rate can change after an initial fixed period, moving up or down with a market index.
- Amortization
- The schedule by which your loan balance is paid down over time through regular principal-and-interest payments.
- Annual Percentage Rate (APR)
- A broader measure of borrowing cost that folds certain fees into the rate, so you can compare loan offers on more than the note rate alone.
- Appraisal
- A licensed appraiser's independent estimate of a home's market value, used by the lender to confirm the property supports the loan.
C
- Cash-Out Refinance
- A refinance that replaces your mortgage with a larger one and returns the difference to you in cash from your home equity. See our cash-out refinance guide.
- Closing Costs
- The fees paid to finalize a mortgage -- lender fees, title, appraisal, taxes, and prepaids -- typically due at closing.
- Conforming Loan
- A loan that meets Fannie Mae / Freddie Mac size and guideline limits. See the 2026 conforming limit.
- Conventional Loan
- A mortgage not insured by a government agency (VA/FHA), following Fannie Mae or Freddie Mac guidelines.
D
- Debt-to-Income Ratio (DTI)
- The share of your gross monthly income that goes to debt payments; a key qualification factor.
- Down Payment
- The portion of the purchase price you pay up front; the rest is financed. See down payment options.
E
- Earnest Money
- A good-faith deposit a buyer puts down with an offer, applied toward the purchase at closing.
- Equity
- The portion of your home you own outright -- its value minus what you still owe.
- Escrow
- An account the lender uses to collect and pay property taxes and insurance on your behalf, spread across your monthly payment.
F
- FHA Loan
- A mortgage insured by the Federal Housing Administration, popular with first-time and credit-building buyers for its lower down payment.
- Fixed-Rate Mortgage
- A mortgage whose interest rate stays the same for the entire term, keeping principal-and-interest payments steady.
J
- Jumbo Loan
- A mortgage larger than the conforming loan limit, with its own reserve and documentation standards.
L
- Loan Estimate
- A standardized form lenders provide within three business days of application, laying out rate, payments, and closing costs so you can compare.
- Loan-to-Value Ratio (LTV)
- The loan amount as a percentage of the home's value; lower LTV generally means less risk and better terms.
M
- Mortgage Insurance (PMI/MIP)
- Insurance that protects the lender if a borrower defaults; conventional loans use PMI, FHA loans use MIP.
O
- Origination
- The process of creating a new mortgage, from application through underwriting to closing.
P
- Points
- Optional up-front fees paid to lower your interest rate (discount points), each typically costing one percent of the loan amount.
- Pre-Approval
- A lender's conditional commitment based on verified income, assets, and credit -- stronger than a pre-qualification. See the difference.
- Principal
- The amount you borrow (or still owe), separate from interest.
- Private Mortgage Insurance (PMI)
- Mortgage insurance on a conventional loan, usually required under 20 percent equity and removable once you reach it.
R
- Rate-and-Term Refinance
- A refinance that changes your rate or term without taking cash out.
- Refinance
- Replacing your current mortgage with a new one, usually to lower the rate, change the term, or access equity.
- Reserves
- Liquid savings a lender wants to see after closing, measured in months of housing payments.
U
- Underwriting
- The lender's review of your income, assets, credit, and the property to decide whether to approve the loan.
V
- VA IRRRL
- The VA Interest Rate Reduction Refinance Loan, a streamlined refinance for existing VA loans. See our IRRRL guide on the VA site.
- VA Loan
- A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans and service members, often with no down payment.
Have a question about any of these?
A local Las Vegas team can explain how any of these apply to your situation -- no pressure.
Check my optionsThis glossary is general educational information, not legal, tax, or financial advice, and not a commitment to lend. Valley West Mortgage is a licensed local mortgage company, NMLS #65506; loan terms and availability vary by borrower and program.