Almost all mortgages, including federally guaranteed ones, originate from banks, credit unions, or thrift institutions. In addition, federal agencies act as the direct lender for a few types of mortgages. Online mortgage sites, such as Rocket Mortgage, New American Funding, and Quicken Loans, may directly originate loans, but others (e.g. eMortgage) match loan requests to a network of lenders. To get some sense of the enormity of the national mortgage industry, consider these statistics for 2021: Total originations: $4.4 trillion, a record Purchase loans: $1.7 trillion, also a record Total refinancings: $2.7 trillion, of which $1.2 trillion were cash-out refis, the most since 2005 Equity cashed out: $275 billion The average mortgage rate in 2021 was 2.96%. The mortgage industry has its own lingo: Conventional Loans: Home loans that the federal government does not guarantee. Conforming Loans: These loans adhere to FHFA (Federal Housing Finance Agency) standards governing maximum debt, minimum credit, and maximum loan amount. In 2022, the baseline conforming loan limit is $647,200 but reaches $970,800 in high-cost areas. Non-Conforming Loans: Loans that don’t conform to FHFA standards. For example, the home may cost more than the maximum conforming loan amount, or the borrower may have subprime credit. Jumbo Loans: These non-conforming loans are for amounts above the FHFA limit. Government Insured Loans: Includes VA, USDA, and FHA loan programs, as described below. Fixed-Rate Mortgages: Loans that do not enact a lower or higher interest rate throughout the loan term. Your monthly mortgage payment doesn’t change unless you refinance. Adjustable-Rate Mortgages (ARM): The interest rates on these loans can change over time according to market conditions. ARMs often have a fixed interest rate for the first few years before switching to a variable, higher interest rate. The variable rate may have yearly and overall caps. Loan Term: The amount of time borrowers have to repay the loan. Typically, loan terms vary between eight and 30 years, but other periods are possible. Mortgages may impose penalties for early pay-off. Debt-to-Income Ratio (DTI): DTI equals your monthly debt payments divided by your monthly income. Your DTI should be below 46% to qualify for a mortgage. Loan to Value Ratio (LTV): LTV equals the mortgage size compared with the home’s value. The larger the down payment, the lower the LTV. Private Mortgage Insurance (PMI): Lenders usually require you to buy PMI when your down payment is less than 20%. Once you achieve 20% equity, you can cancel your PMI. Mortgage Insurance Premium: The FHA loan program equivalent to PMI. Seller Concession: The seller pays some or all of the buyer’s closing costs, including title charges, state and local government fees, lender costs, and home/pest inspections.