Adjustable Rate Mortgage (Arm)
Interest rates on this type of mortgage are periodically adjusted up or down depending on a specified financial index
Amortization
The paying off of debt, such as a mortgage, in regular installments over a specified period of time.
Annual Percentage Rate (APR)
The actual finance charge for a loan, including points and fees, in addition to the stated interest rate.
Appraisal
An expert opinion of the value or worth of a property
Assessed Value
The value placed on a property by a municipality for purposes of levying taxes. It may differ widely from appraised or market value
Closing
The deed to a property is legally transferred from seller to buyer and documents are recorded
Closing Costs
Expenses-over and above the price of the property- incurred by buyers and sellers in transferring ownership of a property. Your lender will give you a good faith estimate of costs you pay at closing
Commission
A fee, usually a percentage of the total transaction paid to an agent or broker for services performed
Comparative Market Analysis (CMA)
A survey of the attributes and selling process of comparable homes on the market or recently sold; used to help determine a correct pricing strategy for seller’s property
Deed
A legal document that formally conveys ownership of a property from seller to buyer
Down Payment
A percentage of the purchase price that the buyer must pay in cash and may not borrow from the lender
Earnest Money Deposit
A deposit made by the potential buyer to show the sellers that you are serious about buying their home.
Equity
The value of the property actually owned by the homeowner-purchase price, plus appreciation, plus improvements, less mortgages and liens
Escrow
A fund or account held by a third-party custodian until conditions of a contract are met
Fixed Rate Mortgage
Interest rates on this type or mortgage remain the same over the life of the loan.
Fixture
A recognizable entity-such as a drape or light fixture-that is permanently attached to a property and belongs to the property when it is sold
Hazard Insurance
Compensates for property damage from specified hazards such as fire and wind
Interest
The cost of borrowing money, usually expressed as a percentage rate
Lien
A security claim on a property until a debt is satisfied
Listing Contract
An agreement whereby an owner engages a real estate company for a specified period of time to sell a property, for which, upon the sale, the agent receives a commission
Market Price
The actual price at which a property is sold
Market Value
The price that is established by present economic conditions, location and general trends
Mortgage
Security claim by a lender against a property until the debt is paid
Multiple listing Service (MLS)
A system that provides to its members detailed information about properties for sale
Origination Fee
An application fee(s) for processing a proposed mortgage loan
PITI
Principal, interest, taxes and insurance, forming the basis for monthly mortgage payments
Point
One percent of the loan principal. It is charged in addition to interest and fees
Prepayment Penalty
A fee paid by a borrower who pays off the loan before it is due
Principal
One of the parties to a contract or the amount of money borrowed, for which interest is charged
Prorate
Divide or assess proportionately
Purchase and Sale Agreement
A contract between buyer and seller that outlines the details of the property transfer
Settlement
All financial transactions required to make the contract final
Title
A document that indicates ownership of a specific property
Title Search
Detailed examination of the entire document history of a property title to make sure
