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Agent |
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Get
pre-approved for the purchase: This takes very little time and
is of great value. At this time, you will identify the price range
for which you qualify and what kind of home/amenities fit your
lifestyle.
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Appraisal |
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An
expert judgment or estimate of the quality or value of real estate
as of a given date.
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Bill
Of Sale |
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An instrument which transfers title to personal property (chattels);
a "Deed" transfers real property. |
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CCR Covenants Conditions
and Restrictions |
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A document that controls the
use, requirements and restrictions of a property.
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Certificate
or Reasonable Value (CRV) |
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A document that
establishes the maximum value and loan amount for a VA guaranteed
mortgage.
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Certificate
Of Title |
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A document signed
by a title examiner or attorney stating that the seller has a good
marketable and insurable title.
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Closing
Statement (settlement) |
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The computation
of financial adjustments between buyer and seller as of the day
of closing a sale to determine the net amount of money which buyer
must pay to seller to complete purchase of the real estate and
seller's net proceeds. Also, "settlement sheets," "HUD-1."
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Commission |
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Payment to a real
estate broker for services performed.
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Condominium |
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A form of real
estate ownership where the owner receives title to a particular
unit and has a proportionate interest in certain common areas.
The unit itself is generally a separately owned space whose interior
surfaces (walls, floors and ceilings) serve as its boundaries.
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Contingency |
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A condition that
must be satisfied before a contract is binding. For instance, a
sales agreement may be contingent upon the buyer obtaining financing.
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Deed |
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A formal written
instrument by which title to real property is transferred from
one owner to another. Also, "conveyance".
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Deed
Of Trust |
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Like a mortgage,
a security instrument whereby real property is given as security
for a debt. However, in a deed of trust there are three parties
to the instrument; the borrower, the trustee, and the lender (or
beneficiary).
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Due-On-Sale
Clause |
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An acceleration
clause that requires full payment of a mortgage or deed of trust
when the secured property changes ownership.
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Earnest
Money |
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The portion of
the down payment delivered to the seller or escrow agent by the
purchaser with a written offer as evidence of good faith.
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Equity |
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The interest or
value which owner has in real estate over and above the debts against
it. (Sales Price - Mortgage Balance - Equity).
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Escrow |
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A procedure in
which a third party acts as a stakeholder for both the buyer and
the seller, carrying out both parties' instructions and assumes
responsibility for handling all of the paperwork and distribution
of funds.
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Federal
National Mortgage Association (FNMA) |
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Popularly known
as Fannie Mae. A privately owned corporation created by Congress
to support the secondary mortgage market. It purchases and sells
residential mortgages insured by FHA or guaranteed by the VA, as
well as conventional home mortgages.
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Fee
Simple |
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An estate in which
the owner has unrestricted power to dispose of the property as
he wishes, including leaving by will or inheritance. It is the
greatest interest a person can have in real estate.
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Fixture |
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What was formerly
personal property which is now permanently attached to real property
and goes with the property when it is sold.
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Graduated
Payment Mortgage |
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A residential mortgage
with monthly payments that start at a low level and increase at
a predetermined rate.
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Hazard
Insurance |
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Protects against
damages caused to property by fire, windstorms, and other common
hazards.
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Home
Inspection Report |
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A qualified inspector's
report on a property's overall condition. The report usually includes
an evaluation of both the structure and mechanical systems.
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Home
Warranty Plan |
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Protection against
failure of mechanical systems within the property. Usually includes
plumbing, electrical, heating systems and installed appliances
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Joint
Tenancy |
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An equal undivided
ownership of property by two or more persons. Upon the death of
any owner, the survivors take the decedent's interest in the property.
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Listing
Contract |
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Between a home
owner (as principal) and a licensed real estate broker (as agent)
by which the broker is employed to market the real estate within
a given time for which service the owner agrees to pay a commission.
Also, "listing agreement".
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Loan
Commitment |
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A written promise
to make a loan for a specified amount on specified terms.
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Loan-To-Value
Ratio |
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The relationship
between the amount of the mortgage and the appraised value of the
property, expressed as a percentage of the appraised value.
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Market
Value |
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The highest price
which a buyer, ready, willing and able but not compelled to buy,
would pay, and the lowest price a seller, ready, willing and able
but, not compelled to sell, would accept. Basis for "listing price',
or "asking price".
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Mortgage |
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A lien or claim
against real property given by the buyer to the lender as security
for money borrowed.
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Mortgage
Life Insurance |
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A type of term
life insurance often bought by mortgagors. The coverage decreases
as the mortgage balance declines. If the borrower dies while the
policy is in force, the debt is automatically covered by insurance
proceeds.
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Mortgage
Note |
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A written agreement
to repay a loan. The agreement is secured by a mortgage, serves
as proof of an indebtedness, and states the manner in which it
shall be paid. Also, "deed of trust note."
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Negative
Amortization |
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Negative amortization
occurs when monthly payments fail to cover the interest cost. The
interest that isn't covered is added to the unpaid principal balance,
which means that even after several payments you could owe more
than you did at the beginning of the loan. Negative amortization
can occur when an ARM has a payment cap that results in monthly
payments that aren't high enough to cover the interest.
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Origination
Fee |
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A fee or charge
for work involved in evaluating, preparing, and submitting a proposed
mortgage loan. The fee is limited to 1 percent of FHA and VA loans.
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PITI |
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Principal,
Interest, Taxes and Insurance.
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Planned
Unit Development (PUD) |
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A zoning designation
for property developed at the same or slightly greater overall
density than conventional development, sometimes with improvements
clustered between open, common areas. Uses may be residential,
commercial or industrial.
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Point |
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An amount equal
to 1 percent of the principal amount of the investment or note.
The lender assesses loan discount points at closing to increase
the yield on the mortgage to a position competitive with other
types of investments.
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Pre-Payment
Penalty |
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A fee charged to
a mortgagor who pays a loan before it is due. Not allowed for FHA
or VA loans.
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Principal |
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This word has several
meanings - a) to denote the most important; - b) a capital sum
lent on interest; - c) one who appoints an agent to act on their
behalf; - d) either party to a contract.
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Prorate |
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To allocate between
seller and buyer their proportionate share of an obligation paid
or due. For example a prorate on real property taxes, fire insurance,
or condominium fee.
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Purchase
Agreement |
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A written document
in which the purchaser agrees to buy certain real estate and the
seller agrees to sell under stated terms and conditions. Also called
a sales contract, earnest money contract, or agreement for sale.
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Realtor |
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A real estate broker
or associate active in a local real estate board affiliated with
the National Association of Realtors®.
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Regulation
Z |
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The set of rules
governing consumer lending issued by the Federal Reserve Board
of Governors in accordance with the Consumer Protection act.
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Survey |
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A map or plat made
by a licensed surveyor showing the results of measuring the land
with its elevations, improvements, boundaries, and its relationship
to surrounding tracts of land. A survey is often required by the
lender to assure a building is actually sited on the land according
to its legal description.
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Tenancy
In Common |
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A type of joint
ownership of property by two or more persons with no right of survivorship.
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Title
Insurance |
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Protects lenders
and home owners against loss of their interest in property due
to legal defects in title.
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Title
Search or Examination |
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A check of the
title records, generally at the local courthouse, to make sure
the buyer is purchasing a house from the legal owner and there
are no liens, overdue special assessments, or other claims.
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Transfer
Tax |
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State tax, local
tax (where applicable) and tax stamps (in some areas) required
by law when title passes from one owner to another.
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Family Homes
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