Who is this glossary for?
Agents first, but every definition is written so you can share it with buyers and sellers.
Glossary
The terms behind every calculator
This real estate and mortgage glossary for agents defines the terms buyers, sellers and investors run into, from PITI and PMI to DSCR, net proceeds and TCPA consent. Each entry says why it matters to agents, gives a worked example, and links to the calculators that use it.
Terms A to Z
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A
B
C
Cap rate
Net operating income divided by property price, a financing-neutral return measure.
Cash to close
The total funds a buyer must bring to closing: down payment plus closing costs, minus credits.
Cash-on-cash return
Annual cash flow divided by the cash an investor put in.
Closing costs
Fees and prepaid items paid at closing, beyond the down payment, by buyers and sellers.
Closing Disclosure
The final federal disclosure of loan terms and closing costs, delivered at least three business days before closing.
Conforming loan limit
The maximum loan size Fannie Mae and Freddie Mac can buy, set each year by the FHFA.
D
Debt-to-income ratio (DTI)
Monthly debt payments divided by gross monthly income, a key measure lenders use.
Discount points
Upfront fees paid to lower a mortgage's interest rate; one point equals 1% of the loan.
Down payment assistance
Programs offering grants or loans to help eligible buyers with down payment and closing costs.
DSCR (debt service coverage ratio)
A rental property's income divided by its debt payment, used by DSCR lenders.
E
F
H
HELOC (home equity line of credit)
A revolving credit line secured by home equity, usually with a variable rate.
Home equity
The part of a home's value the owner owns outright: value minus loan balances.
Home sale contingency
An offer condition making the purchase dependent on the buyer selling their current home.
I
J
L
M
N
P
PITI
Principal, interest, taxes and insurance: the four parts of a typical monthly mortgage payment.
PMI (private mortgage insurance)
Insurance protecting the lender on conventional loans with less than 20% down, paid by the borrower.
Pre-approval
A lender's conditional commitment after reviewing a buyer's credit, income and assets.
Pre-qualification
An informal estimate of how much a buyer might borrow, based on information they provide.
Proration
Dividing ongoing costs like property taxes and HOA dues between buyer and seller as of the closing date.
Q
R
S
Seller concessions
Costs the seller agrees to pay on the buyer's behalf, such as closing costs or a rate buydown.
Seller net sheet
A worksheet that estimates a seller's proceeds from a sale after all costs.
Settlement statement
The itemized record of all money paid and received at closing, for buyer and seller.
Speed to lead
How quickly a new lead is contacted after it comes in.
T
TCPA consent
Consent required under the Telephone Consumer Protection Act before certain marketing calls and texts.
Temporary buydown
A seller- or builder-funded reduction of the rate for the first year or two of a loan.
Title insurance
Insurance protecting the lender and owner against defects in the property's title.
Transfer tax
A state or local tax on the transfer of real property, paid at closing.
U
V
W
Questions by topic
About this glossary
Are the figures in examples current?
Examples are illustrative. Where statutory figures appear, they're sourced and dated. Always confirm current figures with the agency or a lender.
Is this legal or tax advice?
No. Definitions are general information. Consult a qualified professional for advice.
Can I suggest a term?
Yes. Send it to us, and we'll consider adding it.
See the terms in action
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