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Glossary of Mortgage and Home Equity Terms

To navigate through our glossary, click on the first letter of the word you’re looking for.
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Debt-to-Income Ratio (DTI)
Often used in qualifying a consumer for a home loan, DTI reflects the consumer's monthly debt and debt-related costs, such as taxes, fees, and insurance premiums as a percentage of their monthly gross income.
Deed
The legal document conveying title to a real property.
Deed of Trust
An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary), and reconveyed upon payment in full.
Default
The failure to satisfy the terms as agreed in a contract.
Delinquency
A loan payment that is overdue, but within the period allowed before actual default is declared.
De minimis PUD
A Planned Unit Development (PUD) in which the common property has less than a 2% influence upon the value of the premises. The 2% rule of thumb is calculated by dividing the dollar amount of amenities by the total number of units.
Department of Housing and Urban Development (HUD)
A governmental entity responsible for the implementation and administration of housing and urban development programs. HUD was established by the Housing and Urban Development Act of 1965 to supersede the Housing and Home Finance Agency.
Department of Veterans Affairs (VA)
A cabinet-level agency of the federal government. The Servicemen's Readjustment Act of 1944 authorized the agency to administer a variety of benefit programs designed to facilitate the adjustment of returning veterans to civilian life. Among the benefit programs is the VA Home Loan Guaranty program, which encourages mortgage lenders to offer long-term, no-down-payment financing to eligible veterans by partially guaranteeing the lender against loss upon foreclosure.
Deposit
A sum of money given to bind a sale of real estate. Also known as “earnest money.”
Depreciation
A loss of value in real property brought about by age, physical deterioration, functional, or economic obsolescence.
Disclosure
Information relevant to specific transactions that is required by law.
Discount Points
Discount points are charges paid to the lender voluntarily, usually at closing by the borrower or seller, to reduce the interest rate. One point is equal to 1 percent of the principal amount of the mortgage.
Discounted Loan
When the interest rate on a loan is less than the market rate, it is a discounted loan. However, the lender requires additional discount points to raise the yield or return on the loan to the market rate.
Down Payment
Money paid to make up the difference between the purchase price and the mortgage amount.
Draw Period
The fixed period of time — usually 10 to 15 years — during which a borrower may access or “draw” money from a home equity line of credit.
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