Qualification: The process of determining whether a customer has enough cash and sufficient income to meet the qualification requirements set by the lender on a requested loan. It is sometimes referred to as "pre-qualification" because it is subject to verification of the information provided by the applicant.

Rate/point options: All the combinations of interest rate and points that are offered on a particular program. On an adjustable rate mortgage, rates and points may also vary with the margin and interest rate cap.

Rate protection: Protection against the danger that rates will rise between the time a borrower applies for a mortgage loan and the time the loan closes. This protection can take the form of a "lock" where the rate and points are frozen at their initial levels until the loan closes; or a "cap" where the rates and points cannot rise from their initial levels but they can decline if market rates decline. In either case, the protection only runs for a specified period. If the loan is not closed within that period the protection expires and the borrower will either have to accept the terms quoted by the lender on new loans at that time, or start the shopping process over again.

Real Estate Settlement Procedures Act (RESPA): A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

Required cash: The total cash required of the home buyer to close the transaction, including down payment, points and fixed dollar charges paid to the lender, any portion of the mortgage insurance premium that is paid upfront, and other settlement charges. These settlement charges may include title insurance, taxes, etc., and are shown on the Good Faith Estimate of settlement charges that the borrower receives.

Rate Lock: an obligation issued by a lender to a borrower that guarantees a specified interest rate for a specific period of time.

Rate Cap: a limit on the amount a loan may increase at the time of a rate adjustment..

Refinance: paying off one loan with the proceeds from a new loan at the same property, typically done for a lower rate, different terms, or cash equity from the home.