Mortgage glossary
Plain-English definitions of the mortgage terms LendrTech puts on screen — APR, LTV, prepaids, per-diem interest, points, buydowns, IRRRL, cash to close and the rest.
Your borrower stops you mid-sentence: “wait — what are prepaids?” You know the answer. You just want the one sentence that lands, without a detour into escrow accounting.
That's this page. Every term LendrTech puts on a field label, a report row or a chart, defined the way you'd say it on the phone — and linked to the page it lives on.
Definitions only. You won't find a formula or a worked example here: the numbers your borrower sees come from LendrTech's own calculations on your fee sheets, and those are the ones to quote.
The loan
Adjustable-rate mortgage (ARM)
A loan whose interest rate can change after an initial period, on a schedule set in the note. The opposite of a fixed-rate loan. Don't confuse it with a temporary buydown, where the rate on the note never moves and only the early payments are subsidized.
Amortization
The schedule by which each payment splits between interest and principal so the balance reaches zero at the end of the term. Early payments lean heavily toward interest — which is why the same payment means very different things on a new loan and a seasoned one.
Base loan amount
The loan before any financed government fee is added. On a fee sheet it stays in sync with purchase price and down payment: change one and LendrTech moves the other.
Fixed-rate mortgage
A loan whose interest rate is set for the whole term. Payments to principal and interest don't change, though the escrowed portion of the payment still moves as taxes and insurance do.
Interest rate (note rate)
The rate on the promissory note — the rate the principal and interest payment is built from. It is not the APR, and the two should never be quoted as if they were the same number.
Loan-to-value (LTV)
How much of the property's value the loan covers, stated as a percentage. On a purchase LendrTech measures it against the Purchase Price; on a refinance, against the Estimated Value — never the payoff. Leave the value blank on a refinance and LendrTech leaves LTV blank rather than measuring against the wrong number.
Permanent buydown
Paying money up front to lower the note rate for the life of the loan. In practice that means discount points.
Temporary buydown
A subsidy that lowers the borrower's payment for the first year or two or three, after which the full note rate takes over. The note rate itself never changes. A fee sheet's Buydowns section holds the rate and payment for each bought-down year, and Buydown Funds is what the structure costs.
Term
How long the borrower has to pay the loan off. LendrTech's fee sheet takes Loan Term in months, so a 30-year loan is entered as 360.
Total loan amount
The base loan amount plus any government fee the borrower chose to finance — a VA funding fee or an FHA upfront premium rolled into the loan rather than paid at closing.
Costs at closing
Aggregate adjustment
A one-time adjustment on the settlement statement that keeps the new escrow account from being over-funded at the start; it usually reduces what the borrower brings. It has a field of its own under Prepaids & escrow.
Annual percentage rate (APR)
The cost of the credit expressed as a yearly rate: the note rate together with the lender charges and mortgage insurance that regulation counts as part of the cost of borrowing. It exists so two quotes with different fee structures can be compared honestly, which is why LendrTech prints it beside the rate on every report.
Cash to close
What the borrower actually brings to the table — costs and prepaids, less every credit and deposit already applied. On a refinance the row can run the other way and read Cash to You, when the loan hands the borrower money instead of asking for it.
Closing costs
The fee side of the transaction: lender charges, title charges, appraisal, credit report, recording and the rest. On a fee sheet they live in the Closing costs section with a running Total estimated closing costs, and your reports itemize them for the borrower who wants the detail.
Closing Disclosure
The federal form the borrower receives before closing, showing the final terms and costs. LendrTech can read one directly — see importing a fee sheet.
Credits
Money that reduces what the borrower brings to closing rather than what the loan costs. A fee sheet's Credits section covers seller credit, lender credit, the cash deposit on the sales contract, and any write-in credits you add. Reports give lender credit and seller credit rows of their own, because borrowers ask about those two by name.
Discount points
Money paid at closing to buy the note rate down for the life of the loan. On the fee sheet you can enter points as a dollar amount or, behind the field's edit icon, as a percentage — LendrTech does the conversion against the loan amount.
Escrow
Two things wear this name. The escrow account is the lender-held account that collects a slice of the payment each month and pays the property taxes and insurance when they come due; in much of the country escrow also means the settlement process itself. A fee sheet's Prepaids & escrow section is about the first sense — how many months of each item are collected up front.
Fee sheet
LendrTech's name for one priced loan scenario belonging to one client — amount, rate, term, fees, prepaids and credits. Fee sheets are where the numbers live; reports are how you present them. Build one by hand, start from a template, or import a lender's PDF.
Loan Estimate
The federal form a lender issues after application, laying out the loan terms and estimated costs on a standard layout. LendrTech reads these as readily as a lender's own fee sheet.
Origination
The lender's charge for making the loan, quoted as a flat fee or as a percentage of the loan amount. LendrTech has no dedicated field for it — add it with + Add additional closing cost alongside your other lender charges.
Per-diem interest
Interest that accrues from the day of closing to the end of that month, collected at the closing table so the first regular payment can start a full cycle later. On the fee sheet it's the Daily interest row — a number of days, an amount per day, and the total.
Prepaids
Costs the borrower pays ahead rather than as part of a monthly bill: per-diem interest, and the months of homeowner's insurance and property taxes collected to open the escrow account. Prepaids are not lender fees, which is why reports total them separately from closing costs.
Seller concessions
Money the seller agrees to put toward the buyer's costs. On a fee sheet it's Seller Credit, enterable as a dollar amount or as a percentage of the basis you pick, and it gets its own row on a purchase report.
The monthly payment
HOA dues
What the borrower pays a homeowners association. No lender escrows it, but it is part of what the house costs every month, so LendrTech carries it on the payment summary and in the payment breakdown chart.
Homeowner's insurance
The hazard policy the lender requires. It shows up twice on a fee sheet: as a monthly figure in the Payment summary, and as the months of premium collected up front under Prepaids & escrow.
PITI
Principal, interest, taxes and insurance — shorthand for the full housing payment rather than just the loan part of it. Mortgage insurance and HOA dues are usually folded into the same conversation.
Principal and interest (P&I)
The part of the payment that actually pays the loan: interest on the balance plus whatever is left over to reduce it. Everything else in the payment — taxes, insurance, mortgage insurance, HOA — is money that passes through.
Real estate taxes
Property taxes, collected monthly into escrow and paid out when the bill lands. Like insurance, they appear both as a monthly figure and as months collected at closing, and either can be entered as a percentage of the purchase price instead of a dollar amount.
Loan programs and mortgage insurance
Conventional
A loan that isn't backed by a government program. It carries private mortgage insurance above a threshold LTV, and that insurance can generally come off later — unlike FHA's, in most cases.
FHA
A loan insured by the Federal Housing Administration. It carries two insurance charges: an upfront premium and a monthly one. Pick FHA as the loan type and the fee sheet's Mortgage Insurance Premium field appears, with an Is Financed? box for rolling the upfront premium into the loan.
MIP
Mortgage insurance premium — FHA's insurance, upfront and monthly. The distinction that matters to a borrower is that FHA's monthly premium usually stays for a long time, where conventional insurance is designed to come off.
Mortgage insurance
Insurance that protects the lender against default, paid by the borrower, required when the down payment or the equity is below a program's threshold. LendrTech will never recalculate it for you — it depends on credit score, LTV and the insurer's rate card, so when the loan amount or LTV moves the field is flagged for you to confirm rather than quietly overwritten.
PMI
Private mortgage insurance — the conventional-loan flavor, bought from a private insurer rather than a government program.
UFMIP
FHA's upfront mortgage insurance premium, paid at closing or financed into the loan. Financing it is what makes the total loan amount larger than the base loan amount.
USDA
A loan guaranteed by the U.S. Department of Agriculture for eligible rural and suburban properties. Choose USDA as the loan type and LendrTech adds a Guarantee Fee line to the closing costs for you. USDA is also the one program that has no cash-out refinance.
USDA guarantee fee
USDA's upfront charge for guaranteeing the loan — the counterpart to FHA's UFMIP and VA's funding fee. There's an annual portion too, collected monthly.
VA
A loan guaranteed by the Department of Veterans Affairs for eligible service members and veterans. VA loans carry no monthly mortgage insurance at all, so selecting VA takes that line off the payment summary; the program is paid for by the funding fee instead.
VA funding fee
VA's one-time charge in place of monthly mortgage insurance. What it costs depends on the kind of refinance and on whether the borrower has used the benefit before — which is why the fee sheet asks First Use VA Loan? — and some veterans are exempt entirely, which is what the Exempt? box is for. It can be paid at closing or financed into the loan.
Refinancing
Break-even
How long a refinance's monthly saving takes to recoup what it cost up front, net of credits. It's the question every refinance conversation ends on, and refinance reports answer it on the page. Where the new payment isn't lower there is no break-even, and the report says so instead of printing a month count.
Cash-out refinance
A refinance that pays off the existing mortgage and hands the borrower the difference in cash, so the new loan is larger than the old balance. Available on conventional, FHA and VA loans in LendrTech's Refinance Type picker, and not at all on USDA.
Current mortgage
The loan the borrower has today: the balance, payment, rate and remaining term you enter in the refinance builder. Everything a refinance report says about savings is measured against it, so it's worth typing carefully — the builder tells you when those four figures don't agree with each other, and offers you both ways to reconcile them.
IRRRL
The VA Interest Rate Reduction Refinance Loan — VA's streamlined rate-and-term refinance of an existing VA loan. It's one of the choices in Refinance Type on a VA fee sheet, and it prices the funding fee differently from a cash-out, so it's worth getting right.
Payoff
What it takes to retire the existing mortgage on the day of closing. On a refinance fee sheet the Purchase Price field becomes Current Mortgage Payoff, and the payoff is the largest single item in the new loan's cash math.
Rate-and-term refinance
A refinance that replaces the existing loan's rate, its term, or both, without handing the borrower meaningful cash. Conventional, FHA and USDA offer it in Refinance Type; on VA the equivalent product is an IRRRL.
Related pages
- Fee Sheets — where most of these terms are a field you fill in.
- Importing a fee sheet — turn a lender's PDF into one of the above.
- Which report should I send? — matching the report to the conversation.
- Purchase reports, refinance reports and single-loan reports — where these terms become rows your borrower reads.
- Troubleshooting — when a number or a screen isn't behaving.
Spotted a term we've missed, or a definition that doesn't match how your market says it? Tell us at team@lendrtech.com.