A
document that is added to a real estate contract or purchase agreement.
A
mortgage loan with an interest rate that can change throughout the life of the
loan.
A
real estate professional that is licensed to represent buyers and sellers in
real estate transactions. An agent cannot operate independently, they must work
under a licensed broker.
The
process of gradually reducing mortgage loan debt over time by establishing
scheduled monthly payments. The interest payment of an amortized loan will
decrease as time goes on, while the principal payment will increase.
An
approximation of a home's current value based on a range of factors such as the
price of similar properties in the area.
The
increase in a property's value over time.
The value of a property used for tax purposes.
A
short-term loan used to bridge the gap between buying a home and selling your
previous one. Sometimes you want to buy before you sell, meaning you do not
have the profit from the sale to apply to your new home's down payment.
A
real estate broker is qualified to represent a seller or buyer. He or she can
choose to work independently of a firm, real estate agents must work with
licensed brokers.
A real estate agent or broker that operates on behalf of a client buyer to help them find and purchase a property.
The
final step of a real estate transaction when legal documents are signed, and
the property is transferred from the seller to the buyer.
The
costs and fees that come along with the purchase of a property.
An
irregularity, claim, or encumbrance which, if valid, would affect or impair the
title.
The
fee that a real estate agent makes at closing, usually a percentage of the sale
price.
A
term that refers to the prices of recently sold properties that are used to
determine market value of other similar properties. An agent will refer to
these “comps” when trying to figure out what their property is worth.
Process used to determine the value of a home based on the sale prices of similar properties in the area.
A
condition that must be met in order for a real estate contract to be finalized.
This is a short-term loan that covers the cost of building a property.
A
written and legally binding agreement between a buyer and seller outlining the
details of a real estate transaction.
Ideal for borrowers with strong credit, this type of loan is not backed by a government agency like the Federal Housing Administration (FHA).
It
is the total of all monthly debt payments divided by monthly gross income. It
is used to determine affordability and for loan approval.
The
deed refers to the legal document that transfers ownership of a property from a
seller to a buyer.
A
document transferring the title of a property from a homeowner to the bank that
holds the mortgage. A homeowner might submit a deed-in-lieu of foreclosure if
the bank has denied them a loan modification or short sale. However, the bank
can deny the request for a deed-in-lieu (and often do).
When
a homeowner fails to make several mortgage payments on time, according to the
terms of the loan contract.
Occurs
when a homeowner has failed to make a mortgage payment on time.
Fees
homebuyers pay directly to the lender at the time of closing in to buy down the
interest rate which can lower monthly mortgage payments. One point is equal to
one percentage of the loan amount.
The
down payment is the amount of money a buyer must contribute to the purchase of a
property at closing. This can typically range from 5 - 20% of the home's cost.
A
situation when one real estate agent represents the buyer and seller in a
transaction.
Money
paid by the buyer to indicate that they are serious about purchasing the
property. Sometimes referred to as good faith deposit.
The
right to a path or right-of-way over that a person may leave or go away from
his own real estate
The right of eminent domain gives the government
the ability to use private property for public purposes. It is only
exercisable when and if the government fairly compensates the owner of the
property.
The
extension of a structure from the real estate to which it belongs across a
boundary line and onto adjoining property.
A claim, right or lien upon the title to real estate,
held by someone other than the real estate owner.
This
is calculated by taking the difference between the amount owed to a lender and
the market value of a property.
During
the home buying process, your money will be placed "in escrow" and is
protected by a third party until the real estate transaction is closed.
An
exclusive listing is when a seller commits to working with one specific broker
and a designated agent on the sale of a property.
This
federal law determines how a consumer's credit information can be used.
The
amount a property would sell for in a competitive market, or when a seller and
buyer can agree on the price of a property.
A
Federal Housing Administration mortgage loan is backed by the government and is
typically reserved for buyers with a low credit score or significant amount of
debt.
This
mortgage has the same interest rate for the term of the loan.
This
refers to a homeowner putting their property up for sale without assistance
from a real estate agent or broker.
A
property goes into foreclosure when the homeowner misses mortgage payments, and
the lender tries to recover the balance of a loan.
A
required statement from the lender that shows all the expected closing costs.
Also
referred to as a HELOC, this is a second mortgage that allows a homeowner to
borrow money against their home's value.
An
FHA reverse mortgage program enabling homeowners to withdraw equity on their
home through either a fixed monthly payment, a line of credit, or a combination
of the two.
A
home inspection involves the evaluation of a property's condition, including
electrical work, sewage, and plumbing before the closing.
When
a group of homeowners in a community, such as a condominium, join in paying
fees that cover the maintenance of the entire property.
Financial
protection that helps with covering costs associated with repairs of a property
or even replacement if necessary.
The
place of entry such as a right-of-way across adjoining land.
The
amount of money charged on a loan.
Dying
without a legal will.
Joint ownership by two or more persons with right of survivorship. Upon the death of a joint tenant, his interest does not go to his heirs, but to the remaining joint tenants.
A
lender is a financial institution or person that loans money to another party
for the purpose of purchasing real estate.
A
lien is a form of security interest granted over an item of property to secure
the payment of a debt or performance of some other obligation.
A
property that is for sale.
A
real estate agent who represents the seller in a transaction.
A
legally binding agreement between a real estate broker and an owner of real
property granting the broker the authority to act as the owner's agent in the
sale of the property.
A
mortgage is a loan that is used to purchase a home or other form of real
estate.
A
mortgage banker provides mortgage loans.
A
mortgage broker acts as the agent between mortgage borrowers and potential
lenders.
Mortgage insurance
is paid by a borrower who pays less than 20% down payment on their loan. It is
paid by borrower but is used to protect the lender from losses in the event of
a default on the loan.
When
interest on a mortgage loan has not been paid to the lender, it is added to the
loan balance.
A
written instrument acknowledging a debt and promising payment.
This
is the amount of the mortgage loan before interest is taken into account.
The
pre-approval process involves a potential lender or bank reviewing an
individual's finances, including their income, assets, and credit history, to
determine how much money can likely be borrowed.
Banks
offer customers who have proven to be creditworthy their best, or prime,
interest rate.
The
principal is the amount of money you borrowed from a lender, excluding the
interest.
A licensed professional who helps sellers or buyers complete real estate transactions.
A lease or contract might include "right of first refusal" to note that an individual has the right to put an offer on a property before it is listed on the market by a seller.
Also
known as a junior lien, a second mortgage is an additional loan taken on the
same property.
A
servicer is a company that manages mortgage loans, they collect payments, monitor
accounts, interface with the customers.
Within
a real estate contract, a “time is of the essence” clause creates a
specified timeframe for the party to meet its obligations
This
legal document states who has owned a property in the past and notes any liens
associated with it.
A
tax that is charged by a state, county, or city when ownership of a property is
transferred.
This
refers to a prospective buyer and seller reaching an agreement on a property.
At this early stage, both parties are in alignment with the terms of the deal,
including the property's price and closing date.
The person in the lending institution whose job it is to review loan documentation and evaluate the borrower’s ability and willingness to repay the loan.
An
illegal situation that arises when a real estate broker represents both parties
but does not inform one or more of the parties.
A fluctuating interest rate that can go up or down depending on the going market rate.
A consensual
lien by the owner such as a mortgage, as opposed to involuntary liens (taxes).
To
relinquish, or abandon. To forego a right to enforce or require anything.
A
final inspection of the property before closing to see that all agreed to
repairs have been completed and that the property is in the condition the buyer
expects.
A
second mortgage, which is subordinate to but includes the face value of the
first mortgage.
The
acts of an authorized local government establishing building codes and setting
forth regulations for property land usage.
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