Mortgage Basics

Amortization is the gradual repayment pattern that reduces mortgage principal over time through scheduled payments.

An amortization schedule is a payment-by-payment table showing how much goes to principal, interest, and remaining balance.

A home loan is borrowed money used for a home purchase or refinance, usually secured by the property itself.

Interest is the lender's charge for letting the borrower use money over time.

A loan officer is the lender-side professional who helps guide the borrower through the mortgage application and origination process.

Loan term is the length of time the mortgage is scheduled to run before full repayment.

Monthly payment is the amount the borrower is expected to pay each month under the mortgage terms.

A mortgage is a home-secured loan and the legal arrangement that lets the property stand behind repayment.

A mortgage application is the borrower's formal request for a home loan and the starting point for lender review.

Core mortgage terms that explain what the loan is, how repayment works, and who the main borrowing parties are.

A mortgage broker helps a borrower shop or place a loan with lenders rather than funding the mortgage directly.

A mortgage lender is the bank, credit union, or other institution that provides the mortgage funds.

Mortgage note is the mortgage-specific promissory note that states the borrower's repayment obligation.

Principal is the amount borrowed that still has to be repaid, excluding interest and most other charges.

Principal balance is the unpaid portion of the loan principal that the borrower still owes, not including future interest.

A promissory note is the signed document in which the borrower promises to repay the mortgage debt under stated terms.