Real Estate Glossary
Adjustable rate mortgage:
Loans with interest rates that can fluctuate during the term, based on an index
to which the interest rate is tied.
Amortization table: A chart
that breaks out the total annual payment per year, over the entire term.
Amortized
loan: A loan that is paid off in equal installments during its term.
Annual
percentage rate: The amount a loan costs, paid yearly and expressed as a
rate of costs over the loan itself.
Appraisal: An estimate of real
estate value. The most important factor in determining its value is
comparable neighborhood sales.
Arbitration agreement: An
agreement between the seller and buyer to insure that an independent arbitrator
will decide, out of court, any disputes over the property.
Assessments:
A city determined tax on homeowners, used to pay for improvements to the city in
which the homeowner lives.
Association dues: Payments made by
home owners to pay for the maintenance and management of shared property.
Assumable
loan: A type of mortgage that allows the buyer to take over the
responsibility of the mortgage on the encumbered real estate.
Capital
Gains Tax: A tax on the profit obtained from the sale of a capital asset.
Closing
Costs: Expenses incurred for the purpose of closing a real estate or
mortgage transaction. Examples include: attorneys fee, recording charges, survey
fee, title policies, lender fees, discount points, appraisal fee, et cetera.
Commitment
letter: A letter which your lender may send you, stating the terms of the
loan and its approval.
Conventional Loans: Non governmental
home loans
Contingency: A clause within a purchase agreement
that has to be met before the contract can be exercised.
Down
Payment: The initial payment of a home. There are certain minimums of down
payments depending on the type of loan. Most down payments are 5 to 30 percent
of the loan.
Earnest Money: Money that accompanies an offer
made on a property. The money is then applied to the down payment at closing. If
the offer is not excepted the money is returned.
Equity: The
difference between indebtedness and market value of a property.
Escrow:
Funds, many times a bond, held by a third party which will not be released to
the grantee until conditions of a contract or an agreement are fulfilled. | |
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