Real Estate Terms

Front 1

ARM

Back 1

A type of mortgage rate loan whose interest rate changes periodically up or down, usually once or twice a year.

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APR

Back 2

Everything financed in mortgage loan package (interest, loan fees, points or other charges) expressed as a % of the loan amount (usually slightly above the actual interest rate alone)..

Front 3

Asking Price

Back 3

The intial selling price of a property, determined by the seller.

Front 4

Assumable Loan

Back 4

loan in which the lender is willing to "transfer" from the previous owner of the home to the new owner, sometimes at the same interest rate or new rate. It can make your home more attractive to buyers.

Front 5

Closing Costs

Back 5

Costs the buyer must pay at time of closing in addition to down payment: including points, mortgage insurance premium, homeowners insurance, prepayments for property taxes, etc. Costs average 3-4% of loan amount. If buying an HUD home, you can request HUD to pay if sales incentive is offered.

Front 6

Contingency

Back 6

condition put on an offer to buy a home; such as the prospective buyer making an offer contingent on his or her sale of a present home.

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Conventional Mortgage

Back 7

mortgage not insured by the FHA or VA, thus requiring a 10-20% down payment.

Front 8

Earnest Money

Back 8

funds submitted with an offer to show "good faith" to follow through with the purchase. earnest money is placed by the broker in an escrow/trust account until closing, when it becomes part of the down payment or closing costs (HUD usually requires deposit of $500-2000)

Front 9

Escrow

Back 9

A procedure in which documents or transfers of cash and property are put in the care of a third party, other than the buyer or seller.

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FHA Financing

Back 10

Financing for a loan insured against a loss by the FHA - a part of the HUD. Such financing allows for a lower down payment than required by most lenders.

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Homeowners Insurance

Back 11

protects homeowner from "casualty" (damages to home or personal property) and from "liability (damages to other people or property). Required by the lender and usually included in the monthly mortgage payment.

Front 12

Inspection Report

Back 12

Written record of a property's condition, including the foundation, interior, roof, kitchen & baths, foundation, heating & A/C

Front 13

Loan Origination Fee

Back 13

fee charged by the lender for evaluating, preparing, and submitting a proposed mortgage loan.

Front 14

Mortgage Insurance Premium (MIP)

Back 14

A Charge paid by the borrower (usually part of closing closts) to obtain financing, especially when making a down payment of less than 20% of purchase price, for example on an FHA-insured loan.

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Point

Back 15

An amount equal to 1% of the principle amount being borrowed. The lender may charge the borrower several "points" in order to provide the loan.

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Property Taxes

Back 16

Taxes (based on assessed value of home) paid by the homeowner for community services such as schools, public works, and other costs of local government. Paid as a part of the monthly mortgage payment.

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Title Insurance

Back 17

Protects lenders and homeowners against loss of their interest in property due to legal defects in the title.

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VA Loan

Back 18

loan guaranteed by the DA against loss to the lender, and made through a private lender (HUD homes may be purhcased with a VA loan)

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Warranty

Back 19

A binding promise that some product or service will be provided in the future.