The jargon, translated.

A lender has actually reviewed your credit, income and assets and says “you can borrow up to this much.” Stronger than a pre-qualification, which is just an estimate from what you tell them. Sellers take pre-approvals seriously.

A rough estimate of what you might afford based on numbers you provide, without documents. Useful for a first conversation; not something to write an offer with.

Your monthly debt payments (including the new mortgage) divided by your gross monthly income. Most programs want this under roughly 43–50%. It is the number that most often decides how much house you can buy.

The loan amount divided by the home’s value. 10% down means 90% LTV. It drives whether you pay mortgage insurance and how your loan is priced.

A three-digit summary of how you have handled debt. Lenders pull all three bureaus and typically use the middle score. Different programs have different minimums; higher scores generally mean better pricing.

Money left in your accounts after closing, measured in months of mortgage payments. Some programs require them; all lenders like to see them.

The part of the price you pay in cash. Conventional loans can go as low as 3% for qualified buyers, FHA 3.5%, VA and USDA 0% for those eligible. The 20% rule is a myth about avoiding mortgage insurance, not a requirement.

Fees to get the loan done and the title transferred — lender, appraisal, title, recording, prepaid taxes and insurance. Typically 2–5% of the price. Sellers can sometimes contribute; the exact figure is on your Loan Estimate.

A holding account your servicer uses to pay your property taxes and homeowners insurance out of your monthly payment, so a big tax bill never surprises you.

Principal, interest, taxes and insurance — the four pieces of a full monthly payment. Add mortgage insurance and HOA dues if they apply. The calculator on this site shows all of them.

Insurance that protects the lender when you put less than 20% down. Conventional PMI can be cancelled once you reach 20% equity; FHA’s version (MIP) usually stays for the life of the loan unless you refinance.

An upfront fee (one point = 1% of the loan) paid to lower your interest rate. Worth it only if you keep the loan long enough for the monthly savings to pay it back — a break-even calculation Oliver runs with you.

The annual percentage rate — your interest rate plus most lender fees, expressed as a yearly rate. It exists so you can compare two loans with different fees on one number.

The lender’s commitment to hold your interest rate for a set period (often 30–60 days) while the loan closes. Before you lock, the rate can move with the market; after, it can’t.

The standardized three-page form you receive within three business days of applying, showing your rate, payment and closing costs. Every lender uses the same form, which is the point — compare them line by line.

An independent opinion of the home’s value ordered by the lender. If it comes in below the price, you, the seller and your agent renegotiate or you cover the difference — Oliver walks you through the options.

The lender’s review of your entire file against program guidelines. Conditions are the underwriter’s follow-up questions; clearing them is what gets you to clear to close.

The final five-page statement of your loan terms and costs, delivered at least three business days before closing. Compare it to your Loan Estimate; Oliver goes through every line with you.