Buying your first home comes with a lot of unfamiliar terminology.
This glossary breaks down common homebuying terms in clear, simple language, so you can better understand what’s happening at each stage.
🔎 If you’re new to the process, start with the complete first-time homebuyer guide to see how everything fits together.
Jump to a letter:
A · B · C · D · E · F · G · H · I · J · L · M · N · O · P · R · S · T · U · V · W
A
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that may change over time.
Amortization
The process of gradually paying off a loan over time through scheduled payments.
Appraisal
An estimate of a home’s value conducted by a third-party professional.
Appraised Value
The value assigned to a property during an appraisal.
Appraisal Gap
The difference between the appraised value and the agreed purchase price.
Assets
Items of value you own, such as savings or investments.
B
Buyer’s Agent
A real estate agent who represents the buyer.
Buyer’s Market
A market where there are more homes for sale than buyers.
Broker
A licensed professional who can manage real estate transactions and agents.
C
Cash to Close
The total amount a buyer needs to bring to closing.
Closing
The final step where ownership transfers to the buyer.
👉 Learn more in what happens at closing on a house
Closing Costs
Fees paid at closing, usually 2–5% of the purchase price.
Closing Disclosure
A document outlining final loan terms and costs.
Comparables (Comps)
Recently sold homes used to estimate a property’s value.
Contingency
A condition that must be met for a sale to proceed.
Conventional Loan
A mortgage not backed by the government.
D
Debt-to-Income Ratio (DTI)
A measure comparing your monthly debt to your income.
👉 See how it affects affordability in how much house can you afford?
Deed
A legal document transferring ownership of a property.
Down Payment
The upfront portion paid toward a home purchase.
E
Earnest Money
A deposit showing a buyer is serious.
Equity
The difference between your home’s value and what you owe.
Escrow
A neutral account holding funds during a transaction.
F
FHA Loan
A government-backed loan that may allow lower credit scores.
Fixed-Rate Mortgage
A loan with an interest rate that does not change.
G
Gross Income
Your total income before taxes.
H
Home Inspection
A professional evaluation of a property’s condition.
👉 Learn more in what happens during a home inspection?
Homeowner’s Insurance
Insurance that protects your home and belongings.
HOA (Homeowners Association)
An organization that manages a residential community.
I
Interest Rate
The cost of borrowing money.
Investment Property
A property purchased to generate income.
J
Joint Ownership
When two or more people share ownership of a property.
L
Lender
A financial institution that provides a mortgage.
Listing Price
The price a seller asks for a property.
Loan Estimate
A document outlining estimated loan terms and costs.
Loan Term
The length of time to repay a loan.
Loan Underwriting
The process of verifying financial information before approval.
M
Market Value
The price a home would likely sell for in the current market.
Mortgage
A loan used to purchase a home.
Mortgage Pre-Approval
A lender’s estimate of how much you may be able to borrow.
👉 Learn more in mortgage pre-approval explained
N
Net Income
Income after taxes and deductions.
O
Offer
A proposal to purchase a home.
👉 Learn more in what happens when you make an offer on a house
Origination Fee
A fee charged by a lender for processing a loan.
P
Pre-Approval
A lender’s estimate of borrowing capacity.
Pre-Qualification
A basic estimate of what you may qualify for.
Principal
The amount borrowed for a mortgage.
Private Mortgage Insurance (PMI)
Insurance required for some low down payment loans.
Property Taxes
Taxes based on property value.
R
Real Estate Agent
A licensed professional who helps buy or sell homes.
Refinancing
Replacing an existing mortgage with a new one.
S
Seller’s Agent
The agent representing the seller.
Seller’s Market
A market with more buyers than homes.
Survey
A measurement of property boundaries.
T
Title
Legal ownership of a property.
Title Insurance
Insurance protecting against ownership disputes.
U
Under Contract
The stage after an offer is accepted but before closing.
👉 Learn more in what happens after an offer is accepted
V
VA Loan
A government-backed loan for eligible veterans.
W
Walkthrough
A final check of the property before closing.
Final Thoughts
Understanding these terms can make the homebuying process feel much more manageable.
If you’re trying to understand how all of these pieces connect — from financing to closing — the First-Time Homebuyer Mastery course walks through the full journey in one clear, organized place so you can feel more confident every step of the way.