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The friend treatment for mortgage jargon.
Every term below gets the explanation a friend would give you — including the condo vocabulary Chicagoland buyers actually need. No email required, ever. Knowledge shouldn't have a gate.
APR
Annual Percentage Rate — the yearly cost of your loan including the interest rate plus certain fees, expressed as a percentage. It's designed to make loans easier to compare apples-to-apples.
Assessment (HOA fee)
The monthly fee condo owners pay the association for building insurance, maintenance and amenities. It counts in your qualifying math — big in Chicagoland, where condos rule the city market.
Special assessment
A one-time charge a condo board levies when a big expense (roof, elevator, facade) exceeds the reserves. Reviewing reserves before buying is the defense.
Warrantable condo
A building that meets Fannie Mae/Freddie Mac standards (owner-occupancy, reserves, litigation, ownership concentration) and qualifies for standard conventional financing.
Condo questionnaire
A form the lender sends a condo association during underwriting covering the building's finances, insurance and occupancy. Ordering it early keeps closings on time.
HO-6 insurance
The "walls-in" insurance policy condo owners carry for their unit and belongings, complementing the association's master policy on the building itself.
Pre-approval
A lender's verified review of your income, assets and credit resulting in a real budget and a letter. Stronger than pre-qualification, which is an unverified estimate.
Pre-qualification
A quick, unverified estimate of what you might afford based on stated numbers. Useful for early planning; not strong enough to anchor an offer.
DTI (debt-to-income ratio)
Your monthly debt payments divided by gross monthly income. Lenders use it to size your loan — and condo assessments count in it.
PMI
Private Mortgage Insurance — a monthly charge on conventional loans with under 20% down. It's temporary: it drops off as you build equity.
Escrow
The account your servicer uses to collect and pay your property taxes and insurance alongside your mortgage payment — one payment, split three ways behind the scenes.
Points (discount points)
Optional upfront fees paid to lower your interest rate. One point = 1% of the loan amount. Whether they pencil out depends on how long you keep the loan.
Rate lock
An agreement freezing your interest rate for a set window (often 30–60 days) while your loan closes, protecting you from market moves in between.
Appraisal
An independent professional's opinion of the home's value, ordered during processing. Lenders lend against the lower of price or appraised value.
Underwriting
The verification phase where an underwriter reviews your entire file against program guidelines. Extra document requests here are normal, not alarming.
Clear to close
The milestone meaning underwriting is fully satisfied and your closing can be scheduled. The best three words in the process.
Closing costs
The one-time fees to complete your purchase — lender, title, attorney, government recording, prepaid taxes/insurance. Commonly ~2–3% of the price in Illinois.
Earnest money
The good-faith deposit you put down when your offer is accepted, held in escrow and credited to you at closing.
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