Mortgage Terms Every Agent Should Be Confident Explaining

If you want to stand out as a trusted advisor, not just a door-opener because you need to be fluent in the language of mortgages. Buyers don’t just hire us to find homes. They’re leaning on us to guide them through the entire process with clarity and confidence.

Here are six key terms every agent should master and be able to break down for clients in simple, relatable language:

1. Debt-to-Income (DTI) Ratio
This is the lender’s quick test: can your client afford this loan on paper? DTI = total recurring monthly debt ÷ gross monthly income.
🔑 Coaching tip: Help buyers track their monthly debts early. If their DTI is north of 50%, prep them to either pay down debt or reset expectations.

2. Earnest Money Deposit
Think of it as the client’s way of saying, “I’m serious.” Typically 1–3% of the purchase price, held in escrow, applied toward the down payment at closing.
🔑 Coaching tip: Train your clients to have earnest money ready before house hunting. It strengthens offers and speeds up negotiations.

3. Down Payment
Yes, 20% is great. No, it’s not required. Depending on the loan, buyers can get in with much less—even zero with VA.
🔑 Coaching tip: Don’t assume clients know this. Bust the myth early—it builds trust.

4. Closing Disclosure
This is the “final receipt” of the loan: interest rate, principal, costs, everything. Buyers must receive it at least 3 business days before closing.
🔑 Coaching tip: Encourage clients to review it carefully. Offer to walk through it with them, it positions you as their partner, not just their agent.

5. Closing Costs
Usually 3–6% of the loan amount. Includes appraisal, origination, inspections, etc.
🔑 Coaching tip: Teach clients to budget for these upfront. Sticker shock kills deals—preparing them builds confidence.

6. Mortgage Insurance (PMI/MIP)
Protection for the lender if the buyer defaults. Typically required if down payment <20%.
 🔑 Coaching tip: Show clients how and when PMI can be removed. It’s a long-term equity play they’ll thank you for later.

Why This Matters for Agents
Mortgage terms may feel “lender territory,” but the more fluent you are, the stronger your value proposition. Clients remember agents who make the complex simple.

As a real estate professional, your job isn’t to replace the lender, it’s to bridge the gap, anticipate the questions, and keep your clients informed every step of the way.

That’s what separates an average agent from a true advisor.

📩 Let's talk strategy: Asher@buyazre.com | 480.650.2995 | 🌐 www.BUYAZRE.com