Mortgage words, translated.

Pre-qualified is an estimate based on what you tell us. Pre-approved means income, assets and credit were verified. In a competitive market like Franklin, only the second one carries weight with sellers.

Your monthly debt payments (including the new mortgage) divided by your gross monthly income. Most programs like to see it under roughly 43–50%, depending on the loan. Student loans, car payments and minimum card payments all count; utilities and groceries don’t.

FHA can go to 580 with 3.5% down; THDA needs 640; conventional starts around 620 but pricing improves at 680, 700, 740 and 760. A few points can change your rate — which is why we look at the score before the house.

Money a family member gives you toward the down payment. Allowed on FHA, VA, USDA and conventional loans with a simple gift letter and a paper trail. Very common for first-time buyers.

Money left in the bank after closing, measured in months of your mortgage payment. Not always required, but jumbo loans and some scenarios ask for two to six months. More reserves rarely hurt.

Insurance that protects the lender when you put less than 20% down. Conventional PMI cancels once you reach 20% equity; FHA’s version (MIP) usually stays for the life of the loan unless you refinance. It’s a line item, not a life sentence.

Lender, title, appraisal, recording and prepaid items (taxes, insurance, interest). Typically 2–4% of the price in Middle Tennessee. Seller credits, builder incentives and THDA assistance can cover much of it.

A holding account your servicer uses to pay property taxes and homeowners insurance on your behalf. That’s why your payment includes them — it isn’t extra, it’s just bundled.

Prepaid interest you can pay at closing to lower your rate. Sometimes worth it, often not. The break-even math (cost ÷ monthly savings) tells you, and we show it before you decide.

A temporary rate reduction — 2% lower in year one, 1% lower in year two, then the note rate. Usually seller- or builder-paid. Great when someone else pays for it; check the year-three payment before you fall in love with year one.

The annual percentage rate — your interest rate plus certain fees, expressed as one number so loans can be compared apples to apples. Always look at both the rate and the APR.

Tennessee taxes 25% of a home’s appraised value at the county (and city) rate. Williamson County’s effective rate lands well under 1% of price — one of the reasons a Franklin payment can be smaller than the same price elsewhere.

Locking your interest rate for a set period (typically 30–60 days) so market moves don’t change it. New construction sometimes needs an extended lock; we plan for the build timeline.

An independent opinion of the home’s value, ordered by the lender. If it comes in under the price, you have options — renegotiate, cover the gap, or walk. We talk through all three.

The lender’s review of your file against program guidelines. Underwriters send back “conditions” — a few more documents or explanations — which we clear together.

The moment underwriting signs off completely. From here it’s scheduling, final numbers and signing. The best three words in the process.

The final five-page statement of your loan terms and costs. You must receive it at least three business days before closing. We review it with you line by line.

Tennessee Housing Development Agency programs: a 30-year fixed Great Choice first mortgage plus Great Choice Plus down payment assistance for qualified buyers. Full guide on the THDA page.