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Adjustable Rate Mortgage
(ARM) – A loan for which the interest rate changes on a
periodic basis.
Agent – Acts on behalf of another representing that
person’s interests.
Amortization – The gradual elimination of a loan such as
a mortgage, in regular payments over a specified time period..
Annual Percentage Rate (APR) The yearly cost of a
mortgage including interest, mortgage insurance and loan
origination fee), expressed as a percentage.
Appraisal – An estimate of the value of the price a
property would sell in the current marketplace.
Appreciation – An increase in the value of a property.
Assessment – The process of placing a value on an asset
for the purpose of taxation.
Assumable Mortgage – When a home is sold, a mortgage than
can be taken over by the buyer at the same interest rate.
Assumption – A transaction allows a buyer to assume
liability for an existing loan.
Balloon – A loan that has a series of monthly payments
with the remaining balance due in a large lump sum payment.
Broker – The term may also refer to the brokerage or
individual under which an agent is licensed.
Buyer Representation – An agent that represents the buyer
interest in the home buying process.
Cap – The highest interest rate that can be paid on that
an adjustable rate mortgage (ARM) can rise to in a specified
period of time
Closing – The finalizing of the sale of a property, as
its title is transferred from the seller to the buyer.
(sometimes referred to as settlement.
Closing Costs – Charges paid at closing for obtaining a
mortgage loan and transferring a real estate title.
Commission – The fee paid to a real estate agent/broker
for services rendered during the sale or purchase of a home.
Usually a percentage of the property’s sale price.
Comparative Market Analysis (CMA). The CMA shows where
your home fits in with other similar homes in your area.
Condominium (Condo) – A form of property ownership in
which each owner holds title to his/her individual unit, plus a
fractional interest in the common areas of the multi-unit
project.
.
Condo Board – A small group of resident-owners elected by
a condominium community to serve as a the property’s governing
board.
Contingency – A condition in a contract that must be met
before the contract to be executed.
Contract – A legal agreement for the sale of property. It
has a specific beginning and ending dates. .
Conventional Loan – A mortgage loan made by a lender to a
borrower that requires no insurance or guarantee.
Conversion Option – The ability to change a loan from an
adjustable rate to a fixed rate.
Counteroffer – An offer made in response to an offer
received.
Credit Report – A report ordered from a credit bureau
that indicates if a borrower is a good/bad credit risk.
Credit Score – A statistical value that determines a
potential borrower's ability repay a loan. The higher the Credit
Score, the more likely a borrower can qualify for a loan at a
lower interest rate.
Debt – Something owed.
Debt-To-Income Ratio – A comparison of gross income to
total expenses.
Deed – Legal document
that formally conveys title of a property..
Earnest Money – A sum deposited with the broker at the
time an offer is presented to show that a potential purchaser is
serious about buying.
Escrow – The handling of funds or documents by a third
party on behalf of the buyer and/or seller.
Exclusive Agency Agreement – A contract that gives a real estate
agency the right to market and sell a home.
FHA – The Federal Housing Administration. It insures
loans made by an approved lender, as long as the loan is in
accordance with its regulations.
Finance Charge – The cost of obtaining credit including
points, interest and any additional fees.
Fixed–Rate Mortgage – A mortgage where the interest rate
stays constant for the life of the loan.
Fixture – A object (such as a chandelier, kitchen
cabinet, or light unit) that is permanently attached to property
and stays with the property when it is sold, unless otherwise
specified in the sale agreement.
Gross Income – A tax term meaning all income earned
before expenses are deducted.
Hazard Insurance – Insurance that covers property damage
caused by fire, wind, storms, and other similar risk
Home Equity Loan – A loan secured by the equity built up
in a home.
In Contract – A
condition when a buyer and a seller have agreed on the
conditions for the sale of the home and have signed a Purchase
Agreement.
Index – The interest rate or adjustment standard that
determines the changes in monthly payments for an adjustable
rate loan.
Joint Tenancy – Ownership of property by two or more
people in which the survivors automatically gain ownership
Lien – A legal claim held against property until a debt
is satisfied.
List Price – The price of the home as determined by the
seller and their agent.
Listing Contract – Agreement where an owner contracts a
real estate company to market and sale their property. The
contracts a for a specified amount of time.
Market Value – The price that is established by present
economic conditions.
Mortgage Broker – A broker who represents numerous
lenders and helps consumers find affordable mortgages, the
broker charges a fee only if the consumer finds a loan.
Mortgage Company – A company that assembles loans by
borrowing from lenders, to lend to buyers to purchase a home.
Mortgage Lien – A legal claim against a mortgaged
property that must be paid when the property is sold.
Mortgage Loan – A contract in which the borrower's
property is pledged as collateral and repaid in installments.
Multiple Listing Service (MLS) – A database of properties
listed for sale with detailed information.
Negative Amortization – An increase in the outstanding
amount when a monthly payment does not cover the monthly
interest due.
Non Conforming Loans do not follow FHA/VA conventional
lending guidelines. They are tailored for specific financial
situations.
Note – A formal document that shows the existence of a
debt and includes the terms of repayment.
Origination Fee – A fee charged by a lender for
processing a loan application (usually one percent of the loan
amount).
Owner-assisted Loan – A loan in which the seller agrees
to finance all or part of the purchase.
P.I.T.I – Principal, interest, taxes, and insurance -the
components of monthly housing payments.
Point – Finance charges paid by the borrower at the
beginning of a loan. One point is 1% of the loan amount.
Pre-Approval – A mortgage approval before writing a
contract on a property. .
Prepayment – Payment of a debt prior to maturity.
Pre–Qualification – an estimate of how much financing you
*might be* eligible for.
Principal – The amount borrowed, or the part of the
amount borrowed which remains unpaid.
Prepayment Penalty – A fee for paying off a mortgage loan
prior to maturity.
Property Survey – A
survey to determine a properties boundaries.
Property Tax – A local tax assessed on property. This tax
is based on the homes estimated value.
Purchase Agreement /Sales Agreement. A contract for the
purchase and sale of real estate between a buyer and seller that
spell out the terms and conditions of the sale.
R-Value – the efficiency of insulation. The higher the
number, the greater the insulating value.
Realized Amount – The amount received for the sale of a
home, less selling expenses.
Realtor® – Real estate licensees who are members of the
National Association of Realtors® are properly called Realtors®.
Recording Fee – Fees charged for recording the transfer
of property.
Real Estate Settlement Procedures Act (RESPA) – RESPA a
federal law that requires that consumers receive disclosures at
various times in the transaction and outlaws kickbacks that
increase the cost of settlement services.
Purchase Agreement - A contract between a home buyer and
a seller that details the price, and terms and conditions of the
transaction.
Second Mortgage – A loan against the a homes equity.
Secondary Mortgage Market – The selling and buying of
existing mortgages.
Settlement Statement - Forms provided at closing
that itemize the payout in a real estate transaction.
Title – Evidence that a person's legal ownership of a
property.
Title Insurance – Insures the holder against loses caused
by a defect in the title.
Transfer Taxes – Taxes charged on the transfer of
property or on real estate loans.
VA – Veterans Administration. A government agency that
guarantees mortgage loans for eligible veterans.
Walk–Through – A final inspection of a home generally
just prior to settlement to check too see if any problem exist
that need to be corrected.
Zoning – Regulations established by local governments
that control the use of land within a certain jurisdiction.
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