Understand Mortgages and Home Lending
10 guides covering mortgages, interest rates, loan types, pre-approval, DTI, LTV, PMI, escrow, points, and refinancing — written for homebuyers, homeowners, and HOA members.
All 10 guides
All states · FreeMortgages Explained
How home loans work from down payment to payoff — principal, interest, amortization, escrow, closing costs, equity, and how to compare loan offers.
Fixed-Rate vs. Adjustable-Rate Mortgages
How fixed and adjustable structures differ, how ARM rates adjust using an index and margin, what caps limit, and how to evaluate actual loan offers.
Mortgage Interest Rates Explained
Why mortgage rates change daily, why borrowers receive different offers, and how rate, APR, points, credits, and locks interact to determine total borrowing cost.
Mortgage Pre-Approval Explained
What lenders review, how the estimated amount is determined, and why pre-approval does not guarantee final loan approval or a specific purchase price.
Debt-to-Income Ratio Explained
How mortgage lenders calculate DTI, which debts may count, how housing costs affect the ratio, and why DTI is not the same as personal affordability.
Loan-to-Value Ratio Explained
How LTV is calculated, why the appraised value — not the purchase price — controls it, and how CLTV and HCLTV differ from first-mortgage LTV.
Private Mortgage Insurance (PMI) Explained
What PMI covers, who it actually protects, how monthly, upfront, split-premium, and lender-paid structures differ, and how borrower-paid PMI can be removed.
Mortgage Escrow Accounts Explained
How escrow accounts collect property taxes and insurance within the monthly payment, and why a fixed-rate mortgage payment can still change year to year.
Mortgage Points Explained
How discount points trade higher closing costs for a lower rate, how lender credits work in the opposite direction, and how to evaluate break-even across holding periods.
Refinancing Explained
How mortgage refinancing works, the 7 goals that drive it, why lower payment is not the same as lower total cost, and how to evaluate break-even across holding periods.