Buying a home comes with a whole new vocabulary, and many of the most important terms used appear as acronyms.

If you don’t know what they mean, you could feel lost when reading listings, reviewing contracts, or speaking with your lender. But coming to understand these terms can help you feel confident throughout the process and minimize surprises along the way. Here’s a closer look at twelve acronyms every homebuyer should know—and why they matter.

Annual percentage rate (APR)

This mortgage term reflects not just your interest rate but also fees and other costs of borrowing. Comparing APRs between lenders gives you a more accurate picture of which loan is truly the most cost-effective over time—beyond just the advertised interest rate.

Comparative market analysis (CMA)

A real estate agent prepares a CMA to estimate a home’s value by comparing it to similar properties that have recently sold. It’s a key tool in determining a fair offer amount and understanding whether a property is priced competitively in today’s market.

Debt-to-income ratio (DTI)

Lenders calculate this figure by dividing your monthly debt payments by your gross monthly income. They use it to determine whether you can comfortably afford a loan. A lower ratio indicates less risk, and specific requirements can vary depending on the loan type.

Federal Housing Administration loan (FHA)

These loans are government-backed mortgages that often have more flexible qualification requirements. They’re popular among first-time buyers and those with lower credit scores, offering a path to homeownership when conventional loans might be out of reach.

For sale by owner (FSBO)

A FSBO sale means the homeowner is selling without a listing agent. While this may seem like a chance to negotiate directly, buyers should still consider hiring an agent or attorney to ensure that their interests are protected and the transaction goes smoothly.

Homeowners association (HOA)

If you’re buying in a neighborhood or condo community with an HOA, expect monthly or annual fees that will cover shared amenities and maintenance. Reviewing the HOA’s bylaws before committing is essential since you’ll want to understand what’s included in the fees, what rules are in place, and how the association manages common areas and potential disputes.

Loan-to-value ratio (LTV)

This number compares the amount of your loan to the appraised value of the property. A lower LTV reduces risk for the lender and can help you qualify for better interest rates—or even avoid PMI entirely (see below). Knowing this figure is especially useful if you’re considering refinancing in the future.

Multiple listing service (MLS)

The MLS is a database where real estate agents share property listings. It contains the most current and detailed information about homes on the market, often more than what you’ll find on public websites like Realtor.com or Zillow. Understanding the MLS can help you see why a particular listing looks a certain way online and why your agent has access to exclusive details you won’t find anywhere else.

Principal, interest, taxes, and insurance (PITI)

Your monthly mortgage payment typically includes all four components: the loan principal, interest on the loan, property taxes, and homeowners insurance. Understanding your PITI amount helps you anticipate your true monthly housing costs and better plan for additional expenses like HOA fees or private mortgage insurance.

Private mortgage insurance (PMI)

This insurance is typically required if your down payment is less than 20 percent. It helps protect the lender in case you default on the loan and is usually added to your monthly mortgage payment. While it adds a cost, knowing how PMI works (and when it can be removed) can help you plan your budget and payoff strategy.

United States Department of Agriculture loan (USDA)

USDA loans are designed for buyers in qualifying rural or suburban areas. They offer low interest rates and often don’t require a down payment, but income limits and property eligibility rules apply. These loans can make homeownership more accessible in communities that might otherwise be out of reach.

Veterans Affairs loan (VA)

These loans are available to eligible service members, veterans, and certain surviving spouses. They often come with competitive interest rates, no down payment requirement, and no PMI, making them a valuable benefit for those who qualify.

Understanding these common acronyms could make your conversations with agents, lenders, and inspectors smoother. Additionally, it can help you make informed decisions throughout the homebuying process. The more familiar you are with real estate lingo, the more confident you’ll feel as you make progress toward securing the home of your dreams.