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Mortgage glossary
108 mortgage and New Hampshire home buying terms in plain language, from abatement to wire fraud. Where a guide covers a term in depth, its definition links to it.
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A
- Abatement
- A request to your town to lower a property tax assessment you think is too high. In New Hampshire you apply to the town, generally by March 1 after the year's final tax bill, and can appeal a denial to the Board of Tax and Land Appeals or superior court. Read the NH property tax relief guide
- Adjustable-rate mortgage (ARM)
- A loan whose rate is fixed for a set number of years and then adjusts on a schedule, based on a published index plus a margin and within limits called caps.
- Amortization
- Paying off a loan through regular payments over time. Early payments go mostly to interest; later payments go mostly to principal.
- Annual percentage rate (APR)
- The yearly cost of a loan including the interest rate plus certain fees, which makes it easier to compare offers. Read the guide to NH mortgage rates
- Appraisal
- An independent estimate of a home's market value, ordered for the lender to confirm the home supports the loan amount. Read the low appraisal guide
- Assessed value
- The value a New Hampshire town assigns to a property for tax purposes. Your property tax is based on it, not on the purchase price.
- Assumable mortgage
- A loan a buyer can take over from the seller, with the lender's approval, keeping its existing rate and balance. FHA, VA and USDA loans are generally assumable. Read the assumable mortgage guide
- Authorized user
- Someone who can use another person's credit card account without owning it. The account can show on the user's credit report, and how lenders treat it depends on the loan program.
- Automated underwriting
- Software lenders use to review an application against program rules, such as Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Product Advisor. A person still reviews the file.
B
- Bank statement loan
- A loan for self-employed borrowers that documents income with business or personal bank statements instead of tax returns. It's a non-QM loan. Read the bank statement loan guide
- Bank-owned home (REO)
- A home the lender took back through foreclosure and now sells itself, usually as-is through a real estate agent. REO stands for real estate owned. Read the guide to buying a foreclosed home
- Boarder income
- Rent paid by someone who lives in your home but isn't on the loan. It generally doesn't count as qualifying income, with limited exceptions such as HomeReady and FHA with a 12-month history.
C
- CAIVRS
- HUD's Credit Alert Verification Reporting System. Lenders check every FHA borrower against it for delinquent federal non-tax debt, such as a defaulted federal student loan, which must be resolved before the FHA loan can move forward.
- Cash to close
- The total you bring to closing: your down payment plus closing costs, minus any deposits, credits or gifts.
- Cash-out refinance
- A refinance for more than you owe, so you receive the difference in cash at closing. Read the cash-out refinance guide
- Class VI road
- A New Hampshire public road the town doesn't maintain. Lenders want proof of legal, year-round access, and building on one needs special steps under RSA 674:41.
- Clear to close
- The underwriter's final sign-off that all conditions are met and the loan can close.
- Closing costs
- Fees for the loan and transaction, such as appraisal, title, recording and prepaid taxes and insurance. Read the NH closing costs guide
- Closing Disclosure
- A five-page form you receive at least three business days before closing that shows your final loan terms and costs. Read the guide to what happens after you apply
- Co-borrower
- A second person who applies for the mortgage with you, shares responsibility for the debt and usually goes on the title as an owner. Read the co-borrower and co-signer guide
- Co-signer
- Someone who signs the mortgage note and shares responsibility for the debt but doesn't own the home. Also called a guarantor. Read the co-borrower and co-signer guide
- Conforming loan limit
- The largest loan amount Fannie Mae and Freddie Mac will buy. Loans above it are called jumbo loans. Read the 2026 loan limit guide
- Contingency
- A condition in a purchase contract, such as financing, inspection or appraisal, that lets the buyer cancel or renegotiate if it isn't met by its deadline. Read the financing contingency guide
- Contingent liability
- A debt you co-signed for someone else. It usually counts in your debt-to-income ratio unless you can show the other person has made the payments.
- Conventional loan
- A mortgage that isn't insured or guaranteed by a government agency. Most follow Fannie Mae or Freddie Mac rules. Read the conventional loan guide
- Current use
- A New Hampshire program that taxes qualifying open land at its use value instead of market value. If the land is later developed, a land use change tax is due. Read the current use land guide
D
- Debt-to-income ratio (DTI)
- Your monthly debt payments divided by your gross monthly income. Lenders use it to judge what you can afford. Read the credit and DTI guide
- Deed
- The legal document that transfers ownership of a property. In New Hampshire it's recorded at the county registry of deeds.
- Deed in lieu of foreclosure
- Giving the home back to the lender to settle the mortgage instead of going through foreclosure.
- Departing residence
- The home you're moving out of when you buy your next one. If you keep it, lenders have rules for counting its payment and any rent.
- Discount points
- Optional fees paid at closing to lower your interest rate. One point equals 1% of the loan amount. Read the guide to NH mortgage rates
- Down payment assistance
- Help from programs such as NH Housing that can cover part of a buyer's down payment or closing costs. Each program has its own eligibility rules. Read the NH Housing guide
- DSCR
- Debt service coverage ratio. Investor loans use it to compare a property's rent to its mortgage payment instead of using personal income. Read the DSCR loan guide
- Due-on-sale clause
- A loan term that lets the lender ask for full payment if the home is sold or transferred. Federal law limits using it in some transfers, such as to a relative after the owner's death. Read the inherited home guide
E
- Earnest money
- A deposit you make when your offer is accepted to show the seller you're serious. It's usually credited toward your cash to close. Read the financing contingency guide
- Easement
- A right someone else has to use part of your land, such as a utility line or a shared driveway. Easements are recorded at the registry of deeds and show up in the title search.
- Encroachment
- A building, fence or driveway that crosses a property line, onto the neighbor's land or onto yours. A survey can show one, and lenders review it before closing.
- Equalization ratio
- A yearly figure from the NH Department of Revenue Administration that compares a town's assessed values with market values. It shows how far assessments have drifted since the last revaluation. Read the NH property tax guide
- Equalized tax rate
- A town's tax rate adjusted by its equalization ratio, so rates can be compared across towns on a market-value basis. Read the NH property tax guide
- Escrow account
- An account your loan servicer uses to collect and pay your property taxes and homeowners insurance as part of your monthly payment. Read the tax bills and escrow guide
- Escrow analysis
- Your servicer's yearly review of your escrow account. It resets your monthly payment for the coming year and shows any shortage or surplus. Read the tax bills and escrow guide
- Escrow shortage
- When your escrow account won't have enough for the coming year's bills, usually after a tax or insurance increase. You can often pay it at once or spread it over the next 12 months. Read the tax bills and escrow guide
F
- FHA loan
- A loan insured by the Federal Housing Administration, known for low down payments and flexible credit guidelines. Read the FHA loan guide
- Flood zone
- An area FEMA maps as having a high flood risk (zones starting with A or V). A home there with a federally backed mortgage needs flood insurance. Read the flood zone guide
- Forbearance
- A temporary pause or reduction in mortgage payments during a hardship. The skipped amount still has to be repaid or resolved later.
- Form 4506-C
- An IRS form you sign so your lender can get transcripts of your tax returns directly from the IRS to confirm your income.
- Funding fee
- A one-time fee on VA loans that can be paid at closing or added to the loan. Veterans who receive VA disability compensation are exempt. Read the VA loan guide
G
- Gift letter
- A signed letter from the person giving you money toward your purchase, stating it's a gift that doesn't have to be repaid. Read the gift funds guide
- Gift of equity
- When a relative sells you a home for less than its appraised value and gives you the difference, which can count toward your down payment and closing costs. Read the guide to buying from family
H
- HELOC
- A home equity line of credit: a revolving credit line secured by your home that you can draw on, repay and draw on again. Read the HELOC vs. cash-out guide
- Home inspection
- A buyer's review of a home's condition by a professional inspector. In New Hampshire it often includes radon testing and, for homes with a private well, a water test. Read the NH home inspection guide
- Homeowners insurance
- Insurance that protects your home and belongings. Lenders require it, and it's often paid through escrow. Read the homeowners insurance guide
- Homestead right
- A New Hampshire spouse's right in the home the couple lives in. Because of it (RSA 480:5-a), a spouse who isn't on the loan often signs the mortgage on a refinance or home equity loan.
J
- Joint tenancy
- A way for two or more people to own a home together where, if one owner dies, their share passes to the surviving owners automatically.
- Jumbo loan
- A loan above the conforming loan limit, used for higher-priced homes. Read the 2026 loan limit guide
L
- Land contract
- Buying a home by paying the seller over time, with the deed transferred only at the end. Refinancing a land contract into a mortgage has its own rules.
- Land survey
- A map of a property's boundaries, buildings and easements, made by a licensed land surveyor. FHA doesn't require one, but a lender or buyer may want one.
- Letter of explanation
- A short written note your lender asks for to explain something in your file, such as a large deposit, a credit inquiry or a gap in work.
- Lien
- A legal claim against a property, such as a mortgage or unpaid taxes. Liens are recorded at the county registry of deeds and are paid off at a sale or refinance.
- Loan Estimate
- A standard three-page form you receive within three business days of applying that shows your estimated rate, payment and costs. Read the guide to reading a Loan Estimate
- Loan modification
- A permanent change to your mortgage terms, such as the payment or length of the loan, to make it affordable after a hardship.
- Loan officer
- A licensed mortgage loan originator who takes your application and guides it to closing. Every loan officer is registered in the NMLS.
- Loan servicer
- The company that collects your monthly payment and manages your escrow account. It can differ from your lender, and your loan can be transferred to a new servicer.
- Loan-to-value (LTV)
- Your loan amount divided by the home's value. A lower LTV usually means better pricing and no mortgage insurance.
M
- Mortgage broker
- A licensed company, like Elite Mortgage Group, that works with many lenders to find a loan for you instead of lending its own money. Read the broker vs. bank guide
- Mortgage insurance (PMI or MIP)
- Insurance that protects the lender on many loans with a smaller down payment. It's added to your payment and can often be removed later. Read the guide to removing PMI
N
- NH Housing
- New Hampshire Housing Finance Authority, the state's housing finance agency. It offers first-time buyer and down payment assistance programs through participating lenders. Read the NH Housing guide
- NMLS
- The Nationwide Multistate Licensing System, where every licensed loan officer and mortgage company is registered. You can look anyone up on NMLS Consumer Access.
- Non-arm's length transaction
- A purchase where the buyer and seller have an existing relationship, such as relatives or a tenant buying from their landlord. Loan programs have extra rules for these sales.
- Non-QM loan
- A loan outside the federal qualified mortgage rules, such as a bank statement or DSCR loan, often used by self-employed borrowers and investors.
- Nontraditional credit
- A record of regular payments that don't show on a credit report, such as rent, utilities and phone bills. Some loans use it for borrowers with no credit score.
- Notice to the Home Loan Applicant
- A federal notice your lender must give you with the credit scores it used, the key factors behind them and each credit bureau's contact information.
O
- Origination fee
- A lender or broker charge for arranging and processing the loan. It appears on your Loan Estimate.
P
- PITI
- Principal, interest, taxes and insurance: the four parts of a typical monthly mortgage payment.
- Pre-approval
- A lender's review of your credit, income and assets that results in a letter showing how much you can borrow. Sellers expect one with an offer. Read the pre-approval guide
- Pre-qualification
- A quick estimate of what you might borrow based on information you share, before documents are verified. Read the pre-approval guide
- Prepaid items
- Costs paid at closing ahead of time: the first year of homeowners insurance, interest from closing to month end and the deposit that starts your escrow account.
- Principal
- The amount you borrowed and still owe, not counting interest.
- Probate
- The court process that settles a person's estate after death. In New Hampshire it runs through the Circuit Court's Probate Division, and it often has to finish before an inherited home can be sold or refinanced. Read the inherited home guide
- Property tax rate
- In New Hampshire, quoted in dollars per $1,000 of assessed value. A $20 rate on a $400,000 assessment is $8,000 a year. Read the NH property tax guide
- Purchase and sales agreement
- The signed contract between buyer and seller that sets the price, deadlines and contingencies for the sale.
R
- Radon
- A natural radioactive gas common in New Hampshire homes and well water. Buyers often test for it during the inspection period. Read the NH home inspection guide
- Rate lock
- A guarantee of your interest rate for a set period while your loan is processed, so market changes don't affect it. Read the rate lock guide
- Rate-and-term refinance
- A refinance that changes your rate, your loan term, or both, without taking cash out.
- Real estate transfer tax
- A New Hampshire tax on property sales, $0.75 per $100 of the price for both the buyer and the seller. Read the NH closing costs guide
- Reconsideration of value
- A request, made through the lender, for the appraiser to take another look at a value you believe is unsupported, with facts or closed sales the report may have missed. Read the low appraisal guide
- Recording fee
- A county charge to record the deed and mortgage at the registry of deeds.
- Registry of deeds
- The county office where deeds, mortgages and liens are recorded. Each of New Hampshire's 10 counties has one. Read the closing day guide
- Reserves
- Savings you'll still have after closing, often counted in months of mortgage payments. Some loans require them.
S
- School administrative unit (SAU)
- New Hampshire's term for the school district administration that serves one town or several. The local school share is usually the largest part of a town's tax rate.
- Self-employed borrower
- To a lender, usually anyone who owns 25% or more of a business. Income is figured from tax returns after business expenses, typically over two years. Read the self-employed mortgage guide
- Self-sufficiency test
- An FHA rule for 3-4 unit homes: the units' estimated rent, minus an allowance for vacancy and maintenance, must cover the monthly principal, interest, taxes and insurance.
- Seller credit
- Money the seller agrees to put toward the buyer's closing costs or prepaid items, written into the purchase contract. Each loan program caps how much is allowed. Read the seller credits guide
- Short sale
- Selling a home for less than the mortgage balance, with the lender's approval to accept the lower payoff.
- Site condominium
- A neighborhood of detached homes, or sometimes townhouse-style homes, set up under a condo declaration where each owner owns the home and its land. FHA doesn't require condo approval for site condos that meet its definition.
- Streamline refinance
- A refinance with less paperwork for an existing FHA or VA loan, such as the FHA streamline or the VA IRRRL. Read the FHA streamline guide
- Successor in interest
- Someone who receives ownership of a home from a borrower, such as an heir. Once the servicer confirms them, federal rules let them get information about the loan. Read the inherited home guide
T
- Temporary buydown
- Money paid up front, often by the seller, to lower the payment for the first year or two of the loan, such as a 2-1 buydown. Read the seller credits guide
- Tenancy in common
- A way for two or more people to own a home together where each owns a share that passes under their own will, not automatically to the other owners.
- Title insurance
- Insurance that protects you and the lender against problems with the property's ownership history.
- Title search
- A review of public records to confirm the seller can transfer clear ownership and to find any liens that must be paid off.
- Transfer-on-death deed
- A New Hampshire deed under RSA 563-D that names who receives the home when the owner dies. NH's transfer tax law lists it as exempt when no money is exchanged.
U
- Underwriting
- The lender's review of your full application to confirm the loan meets its guidelines. Read the guide to what happens after you apply
- Uniform Appraisal Dataset (UAD)
- The standard format for appraisal reports on loans sold to Fannie Mae and Freddie Mac. A redesigned version, UAD 3.6, became mandatory on November 2, 2026.
- USDA loan
- A loan backed by the U.S. Department of Agriculture for homes in eligible rural and suburban areas, with household income limits. Read the USDA loan guide
V
- VA loan
- A loan backed by the Department of Veterans Affairs for eligible veterans, service members and surviving spouses. Read the VA loan guide
W
- Warrantable condo
- A condo in a project that meets Fannie Mae or Freddie Mac rules for owner occupancy, budget, insurance and other items. Non-warrantable condos need other loan options. Read the condo mortgage guide
- Wire fraud
- A scam where criminals send fake wiring instructions for your cash to close. Always confirm wiring instructions by calling your closing agent at a number you already know. Read the closing day guide
General information only, not legal or tax advice. Program rules vary by lender and change over time.
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