Real Estate Resources
There are certain standard costs associated with closing the sale of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract.
All appropriate costs generated by the sale of a property which the parties must pay to complete the transaction. Costs may include origination fees, appraisal fees, title insurance, taxes and any points negotiated in the deal.
As we negotiate a sales contract for you, we will not only work to get the sales price you want, we will also work to limit the number of closing costs for which you will be responsible.
Buyers receive a “Good Faith Estimate” of closing costs at the time the loan application is submitted to the lender. This estimate is based on the loan officers past experience and may not include all the closing costs. We will carefully review this estimate with you, answering any questions you may have, and which costs are decreed by law to be yours and which are negotiable.
LOAN RELATED COSTS
- Loan Origination Fee
- Appraisal Fee
- Credit Report
- Interest Payment
- Escrow Account
- Property Taxes – Calculate your Estimated tax here
- Transfer Taxes
- Recording Fees
- Homeowners insurance
- Flood or Quake Insurance
- Mortgage Insurance
Real Estate Dictionary
The ratio of the number of properties in an area that have been sold against the number available. Used to show the volatility of a market.
This method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land.
A provision in a mortgage that gives the lender the right to demand immediate payment of the outstanding loan balance under certain circumstances. Usually when the borrower defaults on the loan.
A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.
The natural growth of a piece of land resulting from forces of nature
43,560 square feet. A measurement of area.
The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE
The date the interest rate changes on an adjustable rate mortgage.
AD VAL OREM TAX
Taxes assessed based on the value of the land and improvements
A supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form.
ADJUSTABLE-RATE MORTGAGE (ARM)
A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.
The value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.
ADJUSTED SALES PRICE
An opinion of a property's sales price, after adjustments have been made to account for differences between it and another comparable property.
The additional value a property enjoys based on subjective criteria such as look or appeal.
A declaration that a certain set of facts are truthful.
A calculation used to determine an individual's likelihood of being able to meet the obligations of a mortgage for a particular property. Takes into account the down payment, closing costs and on-going mortgage payments.
A person who has been appointed to act on behalf of another for a particular transaction.
A change—either to alter, add to, or correct—part of an agreement without changing the principal idea or essence.
Any feature of a property that increases its value or desirability. These might include natural amenities such as location or proximity to mountains, or man-made amenities like swimming pools, parks or other recreation.
AMERICAN SOCIETY OF APPRAISERS
An organization of appraisal professionals and others interested in the appraisal profession.
The repayment of a loan through regular periodic payment.
The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.
The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.
A measure of electric current describing the magnitude.
ANNUAL PERCENTAGE RATE (APR)
The rate of annual interest charged on a loan.
A sum of money paid at regular intervals, often annually.
A form used to apply for a mortgage loan that details a potential borrower's income, debt, savings and other information used to determine credit worthiness.
An estimate of value of property resulting from analysis of facts about the property; derived using recent sales of comparable properties by a licensed, professional appraiser, an opinion of value.
A not-for-profit educational organization established by the appraisal profession in the United States in 1987. It is dedicated to the advancement of professional valuation and responsible for establishing, improving, and promoting the Uniform Standards of Professional Appraisal Practice (USPAP).
A world-wide organization dedicated to real estate appraisal education, publication and advocacy.
The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.
The end result of the appraisal process usually consists of one major standardized form such as, the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information. The purpose of the report is to convey the opinion of value of the subject property and support that opinion with corroborating information.
APPRAISAL STANDARDS BOARD (ASB)
An independent board of the APPRAISAL FOUNDATION, which writes, amends, and interprets USPAP. The ASB is composed of up to seven appraisers appointed by the Foundation's Board of Trustees. The ASB holds public meetings throughout the year to interpret and amend USPAP.
An opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.
An educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property.
The natural rise in property value due to market forces.
ARMS LENGTH TRANSACTION
Any transaction in which the two parties are unconnected and have no overt common interests. Such a transaction most often reflects the true market value of a property.
The value of a property according to jurisdictional tax assessment.
The function of assigning a value to a property for the purpose of levying taxes.
The comparative relationship of a property's assessed value to its market value.
The jurisdictional official who performs the assessment and assigns the value of a property.
Any item of value which a person owns.
Transfer of ownership of a mortgage usually when the loan is sold to another company.
A mortgage that can be taken over by the buyer when a home is sold.
When a buyer takes over, or "assumes" the sellers mortgage. Taking over another person’s financial obligation; taking title to a parcel of real property with the Buyer assuming liability for paying an existing note secured by a deed of trust against the real property.
Any number of houses or other dwellings which are physically attached to one another, but are occupied by a number of different people. The individual houses may or may not be owned by separate people as well.
BALL COCK VALVE
The valve inside a toilet tank that controls the filling of the tank.
A mortgage loan in which the monthly payments are not large enough to repay the loan by the end of the term. So at the end of the term, the remaining balance comes due in a single large payment.
The final large payment at the end of a balloon mortgage term.
When a person or business is unable to pay their debts and seeks protection of the state against creditors. Bankruptcies remain on credit records for up to ten years and can prevent a person from being able to get a loan.
A structural supporting member.
The recipient of benefits, often from a deed of trust; usually the lender.
BILL OF SALE
A physical receipt indicating the sale of property.
A mortgage where you make "half payments" every two weeks, rather than one payment per month. This results in making the equivalent of 13 monthly payments per year, rather than 12, significantly reducing the time it takes to pay off a thirty year mortgage.
Any region of a city or town that has fallen into disrepair or otherwise has become undesirable.
Any genuine offer, made without intent to defraud or deceive.
An interim loan made to facilitate the purchase of a new home before the buyer's current residence sells and its equity is available to fund the new purchase.
Structural members used between beams to strengthen the structure.
An individual who facilitates the purchase of property by bringing together a buyer and a seller.
British Thermal Unit. A unit of measurement used to describe heating or cooling capacity.
A segment of land between two disparate municipal zones which acts as a shield to keep one zone from encroaching upon the other. Often used to separate residential districts from commercial areas.
Regulations that ensure the safety and material compliance of new construction within a municipality. Building codes are localized to ensure they are adequate to meet the risk of common hazards.
BUILDING LINE OR SETBACK
The statutory distance between buildings and the property line, imposed by municipalities, home associations, or other agreements.
Specific items of personal property which are installed in a real estate improvement such that they become part of the building. Built-in microwave ovens and dishwashers are common examples.
A one-story, home-style dating from the early twentieth century. Often characterized by a low-pitched roof.
Extra money paid in a lump sum to reduce the interest rate of a fixed rate mortgage for a period of time. The extra money may be paid by the borrower, in order to have a lower payment at the beginning of the mortgage. Or paid by the seller, or lender, as incentive to buy the property or take on the mortgage.
A key role of the buyer’s agent or broker is to work with the buyer to locate a suitable property and negotiate a successful home purchase.
Electrical cable shrouded in a galvanized steel outer cover.
Associated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage.
CAPE COD COLONIAL
A single-story house style made popular in New England. Often characterized by a steep roof with gables.
Accumulated goods and money which is most often used to generate additional income.
An outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.
Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.
A pliable material used to seal cracks or openings such as around windows.
Literally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.
CERTIFICATE OF DEPOSIT
A document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.
CERTIFICATE OF DEPOSIT INDEX
An index based on the interest rate of six month CD's. Used to set interest rates on some Adjustable Rate Mortgages.
CERTIFICATE OF ELIGIBILITY
A document issued by the Veterans Administration that certifies eligibility for a VA loan.
CERTIFICATE OF OCCUPANCY
Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.
CERTIFICATE OF REASONABLE VALUE (CRV)
Usually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.
CERTIFICATE OF TITLE
A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.
CERTIFIED GENERAL APPRAISER
Generally, any professional who has met the local or state requirements, and passed the appropriate certification exam, and is capable of appraising any type of property.
CERTIFIED RESIDENTIAL APPRAISER
A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.
CHAIN OF TITLE
The complete history of ownership of a piece of property.
Any personal property which is not attached to or an integral part of a property. Chattel is not commonly taken into consideration when appraising the value of real property.
Electrical devices which automatically open electrical circuits if they are overloaded.
Ownership of property that is not encumbered by any counter-claim or lien.
CLOSE OF ESCROW Generally the date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.
A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).
All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.
The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.
A second person sharing obligation on the loan and title on the property.
An asset which is placed at risk to secure the repayment of a loan.
The process a lender takes to pursue a borrower who is delinquent on his payments in order to bring the mortgage current again. Includes documentation that may be used in foreclosure.
A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.
As opposed to statute law. Laws that have been established by custom, usage and courts over many years.
A percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.
COMMON AREA ASSESSMENTS
Fees which are charged to the tenets or owners of properties to cover the costs of maintaining areas shared with other tenets or owners. Commonly found in condominium, PUD or office spaces.
Any areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenets or owners of property nearby. Commonly found in condominium, PUD or office spaces.
In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.
An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property whose value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property. Sales that have similar characteristics as the subject real property, used for analysis in the appraisal. Commonly called “comps.”
Interest paid on the principal amount, as well as any accumulated interest.
Additional value granted by a buyer or seller to entice another party to complete a deal.
The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.
The transition of water vapor to liquid. Typically forms in areas of high humidity.
A development where individual units are owned, but common areas and amenities are shared equally by all owners.
Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.
The pipe through which electric wiring is run.
A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.
Connected to or touching along an unbroken boundary.
Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.
A legally binding agreement, oral or written, between two parties.
A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).
A mortgage that begins as an adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.
A form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.
A situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.
COST OF FUNDS INDEX (COFI)
An index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.
A stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.
A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.
A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.
A person to whom money is owed.
A detailed report of an individual’s credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.
Large companies that gather and store financial and credit information about individuals who apply for credit.
A dead-end street. One with only one entrance/exit.
An obligation to repay some amount owed. This may or may not be monetary.
DEBT EQUITY RATIO
The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.
A document indicating the ownership of a property.
DEED-IN-LIEU (OF FORECLOSURE)
A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.
DEED OF TRUST
A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.
DEED OF RECONVEYANCE
A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.
DEED OF RELEASE
A document which dismisses a lien or other claim on a property.
Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made of the real property.
DEED OF SURRENDER
A document used to surrender any claim a person has to a property.
The condition in which a borrower has failed to meet the obligations of a loan or mortgage.
The state in which a borrower has failed to meet payment obligations on time.
Cash given along with an offer to purchase property, Also called EARNEST MONEY.
The natural decline in property value due to market forces or depletion of resources.
DETACHED SINGLE-FAMILY HOME
A single building improvement intended to serve as a home for one family.
Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.
A mortgaged property which has been foreclosed on.
The pipe that water moves through to reach the ground from the rain gutter.
A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.
A single-building improvement which is divided and provides two units which serve as homes to two families.
A house or other building which serves as a home.
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.
The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.
The part of the roof that extends beyond the exterior wall.
The decline in property value caused by external forces, such as neighborhood blight or adverse development.
The amount of time which any income-producing property is able to provide benefits to its owner.
The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.
The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.
A building or other improvement on one property which invades another property or restricts its usage.
A claim against a property. Examples are mortgages, liens and easements.
ENERGY EFFICIENCY RATIO
An efficiency rating system for air conditioning units that corresponds to the number of BTU's output per watt of electricity used.
EQUAL CREDIT OPPORTUNITY ACT (ECOA)
U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.
ERRORS AND OMISSIONS INSURANCE
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.
An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.
An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.
The payout of funds from an escrow account to pay property expenses such as taxes and insurance.
Escrow Officer An escrow officer leads the facilitation of your escrow, including escrow instructions preparation, document preparation, funds disbursement, and more.
The total of all property and assets owned by an individual.
EXAMINATION OF TITLE
The report on the title of a property from the public records or an abstract of the title.
An agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.
The person named in a will to administer the estate.
FAIR CREDIT REPORTING ACT
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.
FAIR MARKET VALUE
The price at which two unrelated parties, under no duress, are willing to transact business.
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.
The boards that enclose the eaves.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.
FEDERAL HOUSING ADMINISTRATION (FHA)
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.
A complete, unencumbered ownership right in a piece of property.
FEE SIMPLE ESTATE
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.
A mortgage that is insured by the Federal Housing Administration (FHA).
FINAL VALUE ESTIMATE
The opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.
The primary loan or mortgage secured by a piece of property.
FIXED-RATE MORTGAGE (FRM)
A mortgage which has a fixed rate of interest over the life of the loan.
Any piece of personal property which becomes permanently affixed to a piece of real property.
The metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.
The furnace exhaust pipe, usually going through the roof.
The valve between the toilet bowl and the tank.
The partially buried support for a vertical structural member such as a post.
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.
The solid structural element upon which a structure is built.
The segment of a property that runs along a point of access, such as a street or water front.
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.
Iron pipe with a galvanized (zinc) coating.
A ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.
A broad-based claim against several properties owned by a defaulting party.
A classic, English-style hose characterized by simple rectangular shape and multiple stories.
Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.
A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.
A main supporting beam.
Any mortgage insured by a government agency, such as the FHA or VA.
The slope of land around a building. Also ground level.
Any person who is given ownership of a piece of property.
Any person who gives away ownership of a piece of property.
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.
Material used around ceramic tile.
The trough around the edge of the roof that catches and diverts rain.
Hazard Insurance Real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property.
The framing elements above an opening such as a window or door.
The floor of a fireplace or the area immediately in front of it.
A municipal restriction on the maximum height of any building or other structure.
Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.
HIGHEST AND BEST USE
The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.
HOME EQUITY CONVERSION MORTGAGE (HECM)
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM's typically do not have to be repaid until the borrower is no longer occupying the home.
HOME EQUITY LINE OF CREDIT
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.
A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.
An insurance policy covering the repair of systems and appliances within the home for the coverage period.
HUD MEDIAN INCOME
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).
A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.
A trust type of account established by lenders for the accumulation of borrower’s funds to meet periodic payments of taxes, mortgage insurance premiums and/or future insurance policy premiums, required to protect their security.
Any item added to vacant land with the intent of increasing its value or usability.
The comparative value of an improved piece of land to its natural, unaltered state.
The process of estimating the value of property by considering the present value of a stream of income generated by the property.
A piece of property whose highest and best use is the generation of income through rents or other sources.
An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.
The examination of a piece of property, its buildings or other amenities.
The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.
A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.
Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.
A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.
Horizontal beams laid on edge to support flooring or a ceiling.
An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payee's property as collateral.
A type of foreclosure conducted as a civil suit in a court of law.
A mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called non-conforming loans.
An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.
Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.
A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.
A type of property ''ownership'' where the buyer actually has a long-term lease on the property.
A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.
A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire parcel of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.
The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.
A person's outstanding debt obligations.
Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.
Any claim against a piece of property resulting from a debt or other obligation.
A limit on how far the interest rate can move for an Adjustable Rate Mortgage.
Any property which is substantially similar to another property.
LINE OF CREDIT
An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.
Any asset which can be quickly converted into cash at little or no cost, or cash itself.
A key role of the listing agent or broker is to form a legal relationship with the homeowner to sell the property and place the property in the Multiple Listing Service.
Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.
A person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.
How a lender refers to the process of writing new loans.
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc typically carried out by the company you make payments to.
LOAN-TO-VALUE RATIO (LTV)
The comparison of the amount owed on a mortgaged property to its fair market value.
An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.
The amount of time the lender has guaranteed an interest rate to a borrower.
Once known as ''mobile homes,'' manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.
The difference between the interest rate and the index on an adjustable rate mortgage.
Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.
An umbrella organization that is made up of multiple, smaller home owners associations. Often found in very large developments or condominium projects.
The date on which the principal balance of a financial instrument becomes due and payable.
MERGED CREDIT REPORT
A credit report derived from data obtained from multiple credit agencies.
METES AND BOUNDS
A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.
The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.
The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.
A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.
The instrument by which real property is pledged as security for repayment of a loan.
A financial institution that provides primary and secondary mortgages to home buyers.
A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.
The entity that lends money in a real estate transaction.
A policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments.
MORTGAGE INSURANCE PREMIUM (MIP)
A fee that is often included in mortgage payments that pays for mortgage insurance coverage.
MORTGAGE LIFE INSURANCE
A policy that fulfills the obligations of a mortgage when the policy holder dies.
The entity that borrows money in a real estate transaction.
Any collection of buildings that are designed and built to support the habitation of more than four families.
MULTIPLE LISTING SERVICE (MLS)
The MLS is a database of properties listed for sale by Realtors who are members of the local Association of Realtors. Information on an MLS property is available to thousands of Realtors.
NATIONAL SOCIETY OF REAL ESTATE APPRAISERS
An organization founded in 1956 which promotes standards of professionalism in its members.
NATURAL VACANCY RATE
The percentage of vacant properties in a given area that is the result of natural turnover and market forces.
When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.
The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can affect the life cycle.
A subsection of a municipality that has been designated by a developer, economic forces or physical formations.
NET LEASABLE AREA
The space in a development, outside of the common areas, that can be rented to tenants.
NEW ENGLAND COLONIAL
An architectural style dating from early American history typified by a two-story building with clapboard siding.
Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.
A loan with no "points". The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.
The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.
Any asset which cannot be quickly converted into cash at little or no cost.
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.
The interest rate stated on a mortgage note.
NOTICE OF DEFAULT
Formal written notice from a lender to a borrower that default has occurred.
A physical presence within and control of a property.
The percentage of properties in a given area that are occupied.
An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.
Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.
Designated parking spaces associated with a particular building or other structure which are not located on public streets.
OLD TERMITE ACTIVITY
Where no termites are currently active, but indications of past activity can be seen.
Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.
Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.
An uncovered electrical connection.
The amount of cash a home buyer initially invests in the home.
ORIGINAL PRINCIPAL BALANCE
The total amount of principal owed on a mortgage loan at the time of closing.
Refers to the total number of points paid by a borrower at closing.
A transaction where the property owner provides all or part of the financing.
The state of property wherein the owner occupies at least some portion of the property.
A shared ownership in a piece of property. May be divided among two or more parties.
A payment of less than the regular monthly amount. Usually, a lender will not accept partial payments.
PERIODIC PAYMENT CAP
The limit on how much regular monthly payments on an Adjustable Rate Mortgage can change during one adjustment period.
PERIODIC RATE CAP
The limit on how much the interest rate on an Adjustable Rate Mortgage can change during any one adjustment period.
Owned items which are not permanently affixed to the land.
The primary domicile of a person or family.
A payment that combines Principal, Interest, Taxes, and Insurance.
PLANNED UNIT DEVELOPMENT (PUD)
A coordinated, real estate development where common areas are shared and maintained by an owner's association or other entity.
A plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.
A percentage of a mortgage amount (one point = 1 percent).
POWER OF ATTORNEY
A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes called an “Attorney-in-Fact.”
The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.
Any building or portion thereof which is manufactured and assembled off site, then erected on a property.
Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.
A fee that may be charged to a borrower who pays off a loan before it is due.
Less formal that pre-approval, pre-qualification usually means a written statement from a loan officer indicating his or her opinion that the borrower will be able to become approved for a mortgage loan.
The interest rate that banks and other lending institutions charge other banks or preferred customers.
The amount owed on a mortgage which does not include interest or other fees.
The outstanding balance of principal on a mortgage. Does not included interest due.
PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI)
The most common constituents of a monthly mortgage payment.
PRIVATE MORTGAGE INSURANCE (PMI)
A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less than 20%.
Any item which is owned or possessed.
The purchase contract between the Buyer and Seller. It is usually completed by the real estate agent and signed by the Buyer and Seller.
Two ratios used in determining credit worthiness for a mortgage loan. One is the ratio of a borrower's monthly housing costs to monthly income. The other is a ratio of all monthly debt to monthly income.
A deed operating as a release, intending to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title by the grantor
An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.
A guarantee from a lender of a specific interest rate for a period of time.
Any land which has not been developed.
A piece of land and any improvements or fixtures located on that land.
REAL ESTATE AGENT
A real estate agent is licensed by the state to represent parties in the transfer of property. Every Realtor is a real estate agent, but not every real estate agent has the professional designation of a Realtor®.
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)
A federal law requiring lenders to give full disclosure of closing costs to borrowers.
Land, improvements and appurtenances, and the interest and benefits thereof.
A Realtor® is a licensed real estate agent and a member of the National Association of Realtors®, a real estate trade association. Realtors also belong to their state and local Association of Realtors.
An electrical outlet to plug into.
A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.
The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.
A new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.
Where air from a furnace or air conditioning system enters the room.
Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.
The amount of principal, interest and other costs that has not yet been repaid.
The amount of time remaining on the original amortization schedule.
An activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.
A plan to repay delinquent payments, agreed upon between a lender and borrower, in an effort to avoid foreclosure.
REPLACEMENT RESERVE FUND
An account, or fund, setup for the replacement of short life items, such as carpeting, in the common areas of a cooperative property.
A piece of property who’s highest and best use is the maintenance of a residence.
A type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.
The structural member of a roof where the rafters join at the top.
RIGHT OF FIRST REFUSAL
An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.
The degree of slope in a roof.
An area outside of an established urban area or metropolitan district.
SALES COMPARISON APPROACH
An appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.
An economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.
A loan secured by the equity in a home, when a primary mortgage already exists.
SECONDARY MORTGAGE MARKET
An economic marketplace where mortgage bankers buy and sell existing mortgages.
A loan that is backed by collateral. In the case of a mortgage loan, the collateral is the house.
The property used as collateral for a loan.
Two residences which share a common wall.
A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc typically carried out by the company you make payments to.
The covering on outside walls beneath the siding or exterior finish such as stucco.
Also called drywall, the gypsum board commonly used on interior walls.
The lumber used around the foundation to support exterior wall framing.
Garden hose pipe connection.
A property designed and built to support the habitation of one family.
The underside of a cornice at the eaves.
A textured plaster exterior (and occasionally interior) wall finish.
A vertical framing piece in a wall, generally 2x4 lumber in interior walls.
A residential development that is created from a piece of land which has been subdivided into individual lots.
A term which indicates a property which is being appraised.
A basin into which water drains and from which the water is pumped out.
A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.
The method whereby a home owner develops equity in a property, either during the purchase or throughout its life, by personally constructing improvements rather than paying to have them built.
The right to occupy a building or unit.
TENANCY IN COMMON
A form of holding title, whereby there are two or more people on title to a property, ownership does not pass on to the others upon the death of one individual.
THIRD PARTY ORIGINATION
When a lender uses a third party to originate and package loans for sale to the secondary market (Fannie Mae, Freddie Mac).
A specific document which serves as proof of ownership.
These are the people who carry out the title search and examination, work with you to eliminate the title exceptions you are not willing to take subject to, and provide the policy of title insurance regarding title to the real property.
A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.
The process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.
TRANSFER OF OWNERSHIP
Any means by which the ownership of a property changes hands.
TRANSFER OF TAX
Taxes payable when title passes from one owner to another.
A bend in water pipe.
A fiduciary that holds or controls property for the benefit of another.
TRUTH IN LENDING
A federal law requiring full disclosure by lenders to borrowers of all terms, conditions and costs of a mortgage.
A style of architecture typified by exposed stone, wood and brick construction. Similar in style to English manor homes.
Any property which has no outstanding claims or liens against it.
UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP)
Developed in 1986 by the Ad Hoc Committee on Uniform Standards and copyrighted in 1987 by The Appraisal Foundation, USPAP forms the guidelines followed by every licensed and certified real estate appraiser in the United States. The purpose of these Standards is to establish requirements for professional appraisal practice, which includes appraisal, appraisal review, and appraisal consulting. The intent of these Standards is to promote and maintain a high level of public trust in professional appraisal practice.
The span of time over which a property can be used or can provide benefits to its owner.
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).
An exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.
A pipe allowing gas to escape.
Having the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.
VETERANS AFFAIRS, DEPARTMENT OF (VA)
The successor to the Veteran's Administration, this government agency is responsible for ensuring the rights and welfare of our nation's veterans and their dependents. Among other duties, the VA insures home loans made to veterans.
An expression of electric force, or pressure. One volt being the force needed to move one amp against one ohm resistance.
A process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.
An affidavit given to stipulate the condition of a property. The person giving the warranty assumes liability if the condition turns out to be untrue.
An expression of amount of electrical power. Volt times amps equals watts.
WEAR AND TEAR
A term used to indicate the normal damage inflicted on a property through every-day use.
Material used around windows and doors to prevent drafts.
Drainage hole that allows water to escape.
A specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.