Mortgage Glossary

Key mortgage terms, in plain English.

Educational information only. Icon Mortgage is not yet licensed in California. No loan products are being offered.

Amortization

How a loan is paid down over time. You pay more interest early on and more principal later.

The all-in annual cost of a loan, including rate plus fees. A better comparison tool than the rate alone.

Professional valuation of the property. Lenders won't lend more than what the appraisal supports.

The final meeting where all documents are signed and the home becomes yours.

Fees paid at closing — taxes, insurance, title, origination. Typically 2-5% of purchase price.

Debt Service Coverage Ratio — rental income divided by mortgage payment. Used to qualify investor loans.

Cash you put in at purchase. Non-QM loan down payments typically exceed conventional loan down payments; specific amounts vary by lender and program.

Third-party account that holds funds (taxes, insurance) or documents during and after closing.

Homeowners Association — monthly dues to maintain common areas in condos and planned communities.

Individual Taxpayer Identification Number — issued by the IRS to people without an SSN.

Loan-to-Value ratio. 80% LTV = 20% down.

Non-Qualified Mortgage — loans that use alternative documentation (bank statements, P&L, etc.) to qualify.

Principal, Interest, Taxes, Insurance — the four components of your mortgage payment.

Lender letter stating how much they'd lend you. Makes you a serious buyer.

Qualified Mortgage — follows strict federal (CFPB) rules. Requires tax returns and SSN.

Replacing your current mortgage with a new one — for a lower rate, different term, or to cash out equity.

Private Mortgage Insurance — charged when your down payment is under 20%. Protects the lender, not you.

Licensed professional who connects you to multiple lenders. Icon Mortgage will be a broker.

Legal document proving the property is yours.