Jumbo Loan -
A loan for $300,700 or more in the continental United States (Alaska and Hawaii limits are higher). These limits are set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.

Lender -
The bank, mortgage company, or mortgage broker offering the loan.

LIBOR -
The London Interbank Offered Rate Index (LIBOR) is an average of the interest rates that major international banks charge each other to borrow U.S. dollars in the London money market. Like the U.S. treasury the CD indexes, LIBOR tends to move and adjust quite rapidly to changes in interest rates.

Life of Loan Cap -
The maximum interest rate that can be charged during the life of the loan. Also called Lifetime Cap. This value is often expressed as an increment above the initial loan rate. For example, an adjustable rate loan with an initial rate of 7.25% and a 6% lifetime cap will never adjust above a rate of 13.25% (7.25+6.0).

Loan-To-Value Ratio -
The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage. A LTV ratio of 90 means that you are borrowing 90% of the value of the property and paying 10% as a down payment. For purchases, the value of the property is assumed to be the purchase price, for refinances the value is determined by an appraisal.

Lock noun -
The period, expressed in days, during which a lender will guarantee a rate. Some lenders will lock rates at the time of application while others will allow you to lock the rate after the application is taken. Request information from your lender regarding lock procedures.

Lock verb -
The act of committing to a mortgage rate. This action, taken by you some time between the application and the closing dates, is sometimes accompanied by a payment by you to the lender. Opposite of float.

Margin -
The amount a lender adds to the quoted index rate for an adjustable rate loan to determine the new interest rate.

Minimum Credit -
This field on the PMLC tables refers to the minimum credit rating a borrower must have in order to qualify for the listed loan.

Monthly Housing Expense -
Total principal, interest, taxes, and insurance paid by the borrower on a monthly basis. Used with gross income to determine affordability.

Mortgagee -
The lender.

Mortgagor -
The borrower.

Net Effective Income -
Gross income less federal income tax.

Origination Fee -
The fee imposed by a lender to cover certain processing expenses in connection with making a loan. Usually a percentage of the amount loaned. Please refer to the Points definition to see how this fee is reflected on the PMLC tables.

Points -
Prepaid interest paid by the borrower to the lender at closing. A point is equal to 1 percent of the loan amount (e.g. 1.5 points on a $100,000 mortgage would cost the borrower $1,500). Generally, by paying more points at closing, the borrower reduces the interest rate of his loan and thus future monthly payments.

Please Note: Lenders who charge Origination Fees as a percentage of loan amount are requested to reflect these fees in the Points column of the PMLC tables.

Prepaids -
Expenses such as taxes, insurance and assessments which are paid in advance of their due date and which must be paid by the buyer on a prorated basis at closing.

Prepayment -
The ability to pay off the remaining balance of a loan.

Prepayment Penalty -
Lenders who impose prepayment penalties will charge you a fee if you wish to repay part or all of their loan in advance of the regular schedule.

Principal -
The amount of debt, not counting interest, left on a loan.

Private Mortgage Insurance (PMI) -
Paid by a borrower to protect the lender in case of default. PMI is typically charged to the borrower when the Loan-to-Value Ratio is greater than 80%.