Mortgage Vocabulary

English Words for Mortgage Situations:

At Drew's ESL Fluency Lessons, we understand that talking about mortgages can be difficult, even for those who have mastered the English language. We have developed special ESL resources for students who need to learn English financial terms and ESL mortgage rates. Each of the following topics are designed to prepare you to speak and understand common terms used by financial professionals and mortgage advisors:

Mortgage Rate

The amount that a buyer pays in terms of the interest rate to buy a home.

“You should buy a home now because the mortgage rates are low.”

Refinance

To replace the existing debt obligation that you have on your home with another one that has different terms. You would refinance to get a better interest rate.

“If you really need some money now you could refinance your home. The rates are better this year, so it would be smart.”

Balloon Payment

A one time lump sum payment for an unpaid part of the loan.

“Some mortgage bankers will have you make a balloon payment to take care of the portion of the loan you didn’t qualify for.”

Closing Costs

The money paid during the final stages of the home purchase which include attorney’s fees, title insurance and taxes.

“Remember that there are going to be closing costs. Make sure you have saved up for that before showing up.”

Lock in
A guarantee from a lender on the interest rate you will be paying for the loan.

“If you can lock in an interest rate of 4.75% I would do it. They are only going to go up!”

Good Faith Estimate

This is an estimate, in writing, that the lender has to give you within three days of the date in which you submitted the loan application.

“Nothing is set in stone yet, but I do have this good faith estimate. We should be able to afford all of the future expenses.

To Get an Appraisal

A certified appraiser must go into the home and inspect it to come up with an opinion of the value. A lender will want the potential buyer to have this done.

“It seems like you really like that big house in Austin. Get an appraisal before you do anything so you know that it is in good shape and worth the price they are asking.”

Sub prime Mortgage

Loans made to home buyers that are risky. These borrowers have bad credit or have walked out on other loans.

“You really have to have good credit to get a home this year. Gone are the days of sub prime mortgages_.”

Home Equity Loan

A loan that is secured by the money you have paid in to your home. The interest is tax deductable.

“My parents took out a home equity loan to pay for the new edition to the house.”

Fixed Rate

This is an interest rate that stays the same for the life of the loan. The borrower will pay the same amount every month.

“I’m glad I have a fixed rate on my mortgage. I don’t have to worry about the payments going up.”

PITI

This is all of the parts that make up your monthly payment for your home. It consists of the principal, interest, taxes and insurance”.

“When you want to know exactly how much you will be paying a month for your new home you need to figure out the PITI.”

Underwriting

This is the act of verifying the information for the loan and approving it.

“While we are in the underwriting stage I will still be nervous. Once that is complete I know the house is mine!”

Title

The document that contains written evidence of who has the right of ownership to a piece of property.

“He’ll need to see the title to prove that you really do own the house.”

Equity

The difference between the appraised value of your home and the amount that you still owe on the mortgage.

“He lost his job, but at least he has equity in his home.”

English as a Second Language Exercises:

  • Mortgage Expressions Matching Worksheet