Lending has a vocabulary problem. Whole sentences that mean something precise to an underwriter and nothing at all to the person signing. Here is every term that shows up in a loan file, explained the way we would explain it across a desk — plainly, and without leaving anything out.
Type a word to narrow the list, or jump to a letter. Every entry opens where you tap it, so nothing takes you away from where you were.
The schedule that splits every monthly payment between interest and principal. In the early years most of what you pay is interest, and only a small slice reduces the balance. Over time it tips the other way.
Which is why paying a little extra in year two saves far more than paying the same extra in year twenty. Ask us to show you the numbers on your own loan before you decide.
The interest rate is the cost of borrowing the money. The APR — annual percentage rate — folds in lender fees and any points paid, which is why it is usually the higher of the two numbers.
When you compare lenders, compare APRs. Comparing rates alone is how an attractive headline hides an expensive fee structure underneath it.
Also seen as · annual percentage rateThe document that proves to a lender you are eligible for a VA loan, and shows how much entitlement you have left to use.
Most can be pulled electronically in a matter of minutes. It is not the hurdle people expect it to be, and it is not something you need to have in hand before you talk to us.
Your total monthly debt payments divided by your gross monthly income. It is the single number most lenders lean on hardest.
Conventional loans usually want to see 43% or lower. VA can go considerably higher when residual income is strong — which is one of several reasons a file declined elsewhere is worth a second look here.
Debt service coverage ratio, used on investment property. It is the rental income divided by the full monthly payment.
A 1.00 means the rent exactly covers the payment. Most competitive lenders want to see 1.25 or better. The appeal of a DSCR loan is that it leans on the property's numbers rather than yours.
Also seen as · debt service coverage ratioThe amount the VA guarantees to the lender on your behalf. It is the machinery behind the benefit, and it is the part most often glossed over.
Full entitlement generally means no down payment and no county loan limit. It is reduced while a VA loan is outstanding, and restored once that loan is paid off.
We review entitlement on every VA file rather than assuming it. Assumptions are where a benefit quietly gets half-used.
The account your servicer uses to collect property taxes and homeowners insurance alongside the mortgage payment, then pay those bills on your behalf when they fall due.
It is the reason a payment can change on a fixed-rate loan. The rate has not moved — the tax bill or the insurance premium has.
Also seen as · impound accountA one-time fee on a VA loan. It is what keeps the programme running without taxpayer subsidy, and it is the trade for a benefit that charges no mortgage insurance at all.
It varies with your down payment and whether this is a first or subsequent use, and it can be rolled into the loan rather than paid at closing. Veterans with a service-connected disability are exempt.
We check exemption on every single file. It is missed more often than it should be.
The loan amount expressed as a percentage of the home's value. Put 10% down and you are at 90% LTV.
It drives whether mortgage insurance applies, and it often affects the rate you are offered. Small movements either side of a threshold can matter more than the size of the movement suggests.
Also seen as · loan-to-value ratioBoth are insurance that protects the lender, not you. They are simply what each programme calls it.
A conventional loan charges PMI when you put down less than 20%, and it falls away once you reach 20% equity. An FHA loan charges MIP, which on most modern FHA loans lasts the life of the loan. A VA loan charges neither.
Also seen as · private mortgage insurance · mortgage insurance premiumMoney paid upfront at closing to buy the interest rate down. One point is 1% of the loan amount.
Worth it only if you hold the loan past the break-even — the month where the saving finally overtakes what you paid. We will work that date out with you before you commit to it.
Also seen as · discount pointsA pre-qualification is an estimate built from what you tell us. A pre-approval means your income, assets and credit have actually been verified.
In a competitive market, sellers largely ignore pre-qualifications. If you are writing offers, be pre-approved.
A VA-specific test that measures what is actually left each month once the mortgage, other debts, taxes and everyday living costs are accounted for.
It is a more human measure than a ratio, and it is why a veteran with a high DTI can still be a genuinely strong file. Lenders who only read the DTI never see it.
Closing costs the seller agrees to cover on your behalf. Each loan type caps how much is allowed, so the ceiling depends on the programme you are using.
Often more effective than negotiating the price down, because it reduces the cash you need on the day rather than shaving a little off the monthly payment. It is worth asking us which lever to pull before you write the offer.
Also seen as · seller creditsThe stage where a person verifies your file against the rules of the programme you are borrowing under. Not a black box, and not a machine — someone reading the documents.
Most delays trace back to a document request. Answering conditions quickly is the single biggest thing a borrower controls in the whole process.
Try another term, or clear the filter to see the whole list. If the word you are looking for is not here, it is worth asking — we would rather explain it properly than have you guess.
Nobody is born knowing what residual income is. The people who ask are not behind — they are the ones who end up understanding their own loan, which is the whole point.
So ask. About a word on this page, a line on a document, or something a different lender said that did not sit right. You do not have to be a client, and you do not have to be buying this year.
“Education is not a lead magnet here. It is the actual job.” The Atlas Team
One conversation, no obligation, and a person on the other end of it who will keep explaining until it makes sense. If we cannot help you today, we will tell you exactly what would change that.