Mortgage Glossary

A method that converts eligible liquid assets into imputed monthly income for qualification when traditional income is insufficient.

A non-QM mortgage that qualifies income using average monthly bank deposits over 12 or 24 months instead of tax returns.

Short-term financing that helps you buy before you sell, secured by existing or new property collateral.

Strengths like reserves, low LTV, or strong payment history that can support approval when a file is borderline.

The ratio of a property's gross rental income to its total mortgage payment (PITIA). A DSCR of 1.0 means the rental income exactly covers the payment. Most DSCR lenders require a minimum ratio of 1.0, with 1.25 considered ideal.

The ratio of monthly debt payments to gross monthly income used to assess affordability.

In bank statement underwriting, the percentage of deposits a lender assumes covers business expenses before calculating qualifying income.

Asset-based lending, often from private investors, with shorter terms and higher rates than traditional mortgages.

The loan amount divided by the property value or purchase price, expressed as a percentage.

A mortgage that does not meet standard Qualified Mortgage (QM) requirements and may use alternative income documentation.

Principal, Interest, Taxes, Insurance, and Association dues — the full housing payment used in DTI and DSCR math.

A deeper underwriting step with documentation review; stronger than pre-qualification for making offers.

An initial review of your stated income, assets, and credit to estimate what you may qualify for — not a commitment to lend.

Paying discount points or a seller concession up front to reduce the interest rate and monthly payment.