Glossary
Mortgage
A mortgage is a loan used to purchase real estate, where the property itself serves as collateral. Most mortgages are repaid over 15 or 30 years through fixed or adjustable-rate monthly payments.
Why it matters
A mortgage is likely the largest debt you'll ever take on, and small differences in terms have enormous long-term costs. Choosing a 15-year over a 30-year mortgage, making one extra payment per year, or securing a rate just 0.5% lower can save $50,000-$100,000 or more over the life of the loan.
Example
A $350,000 30-year mortgage at 7% has a monthly payment of $2,329. Over 30 years, you'll pay $488,281 in total interest — more than the original loan amount.
How Ray helps
Ray tracks your mortgage payments and can show you how much has gone to principal vs. interest over time. Run to see your principal paydown progress.
$ ray "how much equity do I have in my home based on my payments?"Related terms
Amortization
Amortization is the process of paying off a loan through regular installments that cover both principal and interest.
APR (Annual Percentage Rate)
APR is the yearly cost of borrowing money, expressed as a percentage.
Debt-to-Income Ratio
Debt-to-income ratio (DTI) compares your total monthly debt payments to your gross monthly income, expressed as a percentage.
Credit Score
A credit score is a three-digit number (typically 300-850) that represents your creditworthiness based on your borrowing and repayment history.
Net Worth
Net worth is the total value of everything you own (assets) minus everything you owe (liabilities).