The simplest answer, in plain English — what a mortgage is, how the monthly payment works, the types of loans, and the steps from pre-approval to the keys.
A mortgage is a loan used to buy or refinance a home, secured by the home itself. You borrow the money, pay it back over time with interest, and the lender holds a lien on the property until the loan is paid off. If payments stop, the lender can foreclose — which is what makes it a secured loan and why mortgage rates are lower than credit cards.
Most people call the monthly payment “PITI,” for its four parts:
Early in the loan most of your payment is interest; over time the balance falls and more goes to principal. You can see this for your own numbers with our payment calculator and amortization schedule.
A fixed-rate mortgage keeps the same rate and principal-and-interest payment for the life of the loan — predictable and the most common choice. An adjustable-rate mortgage (ARM) starts lower, then adjusts after a set period; it can suit buyers who expect to move or refinance before it adjusts.
The standard loan, with down payments that can go well under 20%.
Lower-barrier loans — Lexington goes to a 500 FICO where most stop at 580.
Financing above conforming limits for higher-priced homes.
Tap equity or lower your rate without disturbing your first mortgage.
Turn home equity into cash flow — down to a 500 FICO.
Qualify a rental on its own income — down to a 0.75 ratio.
Lenders look at your debt-to-income ratio, credit, down payment, and the property. The classic guideline is spending no more than about 28% of gross income on housing and 36% on total debt, though many programs go higher. Our affordability calculator solves for the price that fits your numbers.
Where Lexington is different: we place the loans other lenders decline — FHA and VA down to a 500 FICO, HELOCs to 600, reverse to 500 with past mortgage lates OK, and DSCR investor loans to a 0.75 ratio. See all programs →