A mortgage with an interest rate that changes periodically after an initial fixed period. A 5/1 ARM is fixed for 5 years, then adjusts annually.
The process of paying off a loan through regular scheduled payments. Early payments go mostly toward interest; later payments apply more to principal.
The true cost of borrowing including the interest rate plus fees and charges. Always compare APRs, not just interest rates.
A professional estimate of a property’s market value, required by lenders before approving a mortgage.
Fees paid at closing, typically 2–5% of the loan amount. Includes appraisal, title insurance, origination fees, and prepaids.
Total monthly debt divided by gross monthly income. Most lenders prefer a DTI below 43–45%.
The upfront cash you pay toward the purchase price. A larger down payment reduces your loan balance and can eliminate PMI.
Down payment assistance (DPA) programs provide eligible buyers with grants or secondary loans to help cover upfront homebuying costs.
Used for investment properties. Monthly rental income divided by mortgage payment. 1.25x means 25% more income than debt.
The difference between your home’s market value and your remaining mortgage balance.
A neutral account holding funds for property taxes and insurance, collected monthly as part of your mortgage payment.
A mortgage insured by the Federal Housing Administration. Requires as little as 3.5% down with 580+ credit score.
A mortgage where the interest rate stays the same for the entire loan term. Monthly payments never change.
A loan secured by your home equity, typically at a fixed rate, providing a lump sum for any purpose.
A mortgage that exceeds conforming loan limits. In 2026, the Michigan jumbo threshold is $832,750.
Loan amount divided by the property’s appraised value. $200K loan on $250K home = 80% LTV.
Insurance required on FHA loans. Includes an upfront fee (1.75%) and annual fee paid monthly.
Nationwide Multistate Licensing System, the registry for mortgage professionals. Michigan Mortgage Pro: NMLS# 2566773.
A Non-Qualified Mortgage that doesn’t meet standard federal guidelines. Ideal for self-employed borrowers and investors.
A lender’s conditional commitment to lend a specific amount based on a full review of your credit, income, and assets.
Insurance required on conventional loans with less than 20% down. Cancels automatically at 20% equity.
The full monthly mortgage payment including principal, interest, taxes, insurance, and home owners assoication (HOA) dues.
A lender’s guarantee of your interest rate for 30, 45, or 60 days while your loan processes.
Protects against claims on the property’s title from past issues like unpaid taxes or liens.
The process where the lender evaluates your financial profile and documentation to make a final lending decision.
A mortgage benefit for eligible veterans and active-duty service members. Offers zero down payment and no PMI.
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