Homebuying & Loans,
Explained Simply.

A mortgage outside government insurance or guarantee programs such as FHA and VA. Conforming conventional loans meet agency rules and local loan limits; jumbo loans are another kind of conventional loan.

A mortgage insured by the Federal Housing Administration and made by an approved lender. It can be an option for a home you will live in, including for some borrowers with a smaller down payment.

Home financing backed by the Department of Veterans Affairs for eligible service members, veterans and certain surviving spouses. Eligibility for the benefit and approval for a loan are separate steps.

A mortgage above the applicable conforming loan limit. The limit depends on the year, county and number of units—not simply whether a home is described as luxury.

A fixed-rate mortgage keeps the same interest rate. An adjustable-rate mortgage, or ARM, can change its rate after an initial period under the rules in the loan documents.

Some lenders evaluate self-employed income using a history of bank statements under a specific program instead of relying only on the usual tax-return approach.

For a defined period, scheduled payments cover interest without reducing the amount borrowed. This is a repayment feature, not a separate promise of affordable financing.

A mortgage a lender keeps on its own books rather than selling to investors. The lender can use its own underwriting approach within applicable rules.

Specialized programs for some international buyers purchasing U.S. property. The lender evaluates residency, income, credit history and the source of funds under its program rules.

A funded temporary subsidy reduces the borrower’s scheduled payment contribution during the first two years of an eligible mortgage. The loan’s contractual note rate does not change.

A new mortgage replaces your current mortgage to change its rate, repayment term or structure. The new loan pays off the old one.

You replace an existing mortgage with a larger one and receive part of the difference in cash after payoffs and costs. It uses equity in your home.

Financing for building or substantially renovating a property. Funds are typically released in stages, called draws, as work progresses rather than all at once.

DSCR stands for debt service coverage ratio. Rental-property programs focus on how the property’s income compares with its debt payments and specified housing expenses. The lender determines the calculation.

Short-term financing often used to acquire or improve an investment property before a sale or longer-term loan. Hard money generally emphasizes the property securing the loan; bridge describes the temporary purpose.

Financing for property used for business or investment, such as offices, retail, warehouses or larger apartment buildings. Review often centers on the property, business finances and repayment capacity.

Two small-business financing programs. SBA 7(a) can support purposes such as acquiring a business, working capital or eligible real estate. The 504 program focuses on eligible long-term fixed assets, including buildings and equipment.

A loan for an aircraft, usually secured by that aircraft. The review considers the aircraft itself and the borrower’s finances, along with the proposed personal or business use.

Financing for a vessel, with terms influenced by the borrower, the boat and its intended use. A lender may require a marine survey, valuation and insurance.

Both describe a lender’s early assessment of borrowing capacity. The information reviewed varies by lender; a preapproval generally involves more verification than an informal estimate.

An inspection examines a home’s physical condition. An appraisal estimates its value. They answer different questions and one does not replace the other.

The sale price is what the buyer pays for the property. Your net proceeds are what remains after mortgage payoffs, agreed fees, concessions and other closing adjustments.