Mortgage language can feel like another language at first 📘
But knowing a few key terms can make you a smarter, calmer buyer.
Principal
This is the amount you actually borrow. Your payments gradually reduce this balance over time.
Interest Rate
This is the cost of borrowing money. Even small rate differences can impact long-term cost.
APR (Annual Percentage Rate)
APR includes interest plus lender fees. It gives a more complete cost picture.
Escrow
An account where your lender holds funds for taxes and insurance so you don’t pay them all at once.
PMI (Private Mortgage Insurance)
Insurance required on many loans with low down payments. It protects lenders, not buyers.
When buyers understand these terms, they compare loans more effectively and avoid surprises at closing.
Knowledge removes fear and replaces it with confidence 💡