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lossary
A, B, C, D, E, F, G, H, I, J, l, M, N, P, Q, R, S, T, U, V, W, Z
Abstract of Title - A historical summary of the proceedings and recorded documents affecting the title to a property
Acceleration Clause - A provision in a mortgage that gives the lender the right to demand payment of the entire principal balance if a monthly payment is missed
Addendum - An attachment to a purchase contract used to make changes or additions
Adjustable Rate Mortgage (ARM) - A mortgage that permits the lender to adjust or change its interest rate at specified times, within specified limits based on a specified index
Agency - The legal relationship between a buyer or seller and his or her agent
Agency Disclosure - A disclosure made by real estate agents to the buyers or seller describing the agent's duties and responsibilities as well as the type of agency in regards to the real estate transaction. This disclosure is required in most states
Amortization - The gradual repayment of a mortgage loan by making periodic payments of both principal and interest
Annual Percentage Rate (APR) - The finance charge calculated over one year taking into consideration all costs of the loan as required by the Truth in Lending Act
Appraisal - A written analysis of the estimated value of a property prepared by a qualified appraiser. Contrast with home inspection
Appreciation - An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation
APR - Annual Percentage Rate - The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance, and loan origination fee (points)
Assumption - The transfer of the seller's existing mortgage to the buyer
Attorney-in-fact - One who holds a power of attorney from another to execute documents on behalf of the grantor of the power
Balloon Payment - The final payment, usually a lump sum, that is made at the maturity date of a balloon mortgage
Beneficiary - The person designated to receive the income from a trust, estate, or a deed of trust
Binder - A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate
Blanket Mortgage - One mortgage which covers more than one property
Bridge Loan - A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as "swing loan"
Buy Down Mortgage - A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower's monthly payments during the first few years of a mortgage. A permanent buydown reduces the interest rate over the entire life of a mortgage
Buyer's Agent - An agent who represents the buyer in a real estate transaction
Capital Gain - Usually the difference between the original cost and selling price of a capital asset, such as real property, after deductible expenses have been taken. Capital gain is subject to taxation
CC&Rs - Coventants, Conditions and Restrictions - Descriptions of restrictive limitations that apply to properties such as condominiums. These are found in the Master Deed
Certificate of Title - A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner
Closing - A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs. Also called "settlement
Closing Costs - Expenses incurred in buying a home including but not limited to attorney's fees, title insurance premium, land survey, title search, recording fees, appraisal cost and mortgage application fees
CMA - Comparative Market Analysis - A written report on the property that examines comparable homes in the area that have recently been sold, are currently on the market, or are currently under contract. A CMA will help you decide whether the asking price of the property is in line with other comparable houses in the neighborhood
Collateral - The property used as security for a loan and is subject to seizure if the borrower defaults
Condominium - A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas
Conforming Loan - A loan that does not exceed the Fannie Mae/Freddie Mac limit
Contingency - A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector
Contingent Sale Offer - An offer to purchase real estate that is contingent upon the sale of another property
Conveyance - The transfer of ownership of real property from one person to another
Cooperative - A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit
Cosigner - A second person who signs a note with the primary borrower. This cosigner is equally responsible for repaying the loan
Counter Offer - An offer in response to an offer
Credit Report - A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness
Credit Scoring - Your credit score is based on all the information in your credit report. This information is converted into a number -- a credit score -- that the lender uses to determine whether you are likely to repay your loan in a timely manner. The scores used in mortgage lending are typically in the 300 to 900 range. A general guide is that the higher your score the better. But you should keep in mind that your credit score is just one of several factors that will be used to evaluate your mortgage loan application
CRB -Certified Residential Broker
CRS - Certified Residential Specialist
Deed - The legal document conveying
title to a property
The deed is the document that transfers ownership from the
seller to you. Only the seller signs the deed at closing, and you'll receive
a copy of it
The closing agent will record the deed with you listed as the
new property owner. Your name and the names of any other buyers appear on
the deed, and it will be sent to you after it is recorded
Deed of Trust - The document used in some states instead of a mortgage; title is conveyed to a trustee
In some states, a "deed of trust" is used instead of a mortgage. When homeowners sign a deed of trust, they receive title to the property but convey title to a neutral third party -- called a trustee -- until the loan balance is paid in full
Default - Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage
Depreciation - A decline in the value of property; the opposite of appreciation
Discount Points - Discount points
are often used to describe a type of fee that lenders charge. Discount
points are additional funds you pay the lender at closing to get a lower
interest rate on your mortgage
A point equals 1 percent of the loan amount. So, if you and
your lender agree to a mortgage of $100,000, one point would equal $1,000
Typically, each point you pay for a 30-year loan lowers your
interest rate by .125 of a percentage point. If the current interest rate on
a 30-year mortgage is 7.75 percent, paying one point would lower the
interest rate to 7.625
Ask your lender if you have the option of paying 1, 2, or 3
discount points -- or you can choose not to pay any discount points. It
often makes more sense to pay discount points if you plan to stay in your
home for a long time
Down Payment - The part of the
purchase price of a property that the buyer pays in cash and does not
finance with a mortgage. Also known as earnest money
Saving for a down payment is usually one of the most
difficult parts of preparing to buy a home. If you believe you have the
needed funds, you are in a better position to seek pre-qualification from a
lender to get the mortgage that is right for you
Most homeowners rely on a mortgage from a financial
institution, and most mortgage products require buyers to include a portion
of their own funds towards the purchase of the home. This is called the down
payment. Lenders feel more secure when buyers include a down payment,
indicating they are less likely to walk away from their investment if their
finances take a downturn
Historically, buyers usually made a down payment that totaled
20 percent of the home's purchase price. Under this scenario, a down payment
for a $100,000 home is $20,000. But today, new mortgage products allow
buyers to put down as little as 3 percent to 5 percent, provided private
mortgage insurance is obtained. The down payment for a $100,000 home with 5
percent down payment is just $5,000
Sources for down payments may come from buyers' savings
accounts, checking accounts, stocks and bonds, life insurance policies, and
gifts
Dual Agency - One broker represents both the buyer and seller in a real estate transaction. Dual agency can also exist if two agents working for the same broker represent both the buyer and seller in the transaction. Dual agency must be disclosed to both the seller and the buyer and they both must agree to this representation. A dual agent must be loyal to both the buyer and the seller
Due-on-Sale Clause - A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage
Earnest Money - The down payment deposited by the Buyer under the terms of the contract
Easement - A right of way giving persons other than the owner access to or over a property
Eminent Domain - The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings
Encroachment - An improvement that intrudes illegally on another's property
Encumbrance - Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions
EPA - Environmental Protection Agency
E-PRO - Internet savvy real estate agent
Equity - A homeowner's financial
interest in a property. Equity is the difference between the fair market
value of the property and the amount still owed on its mortgage
A lender determines how much equity you have in your home by
taking the appraised value of the home and subtracting any mortgage debt
For example, if your house is valued at $150,000 and your
mortgage balance is $80,000, you have $70,000 equity in the house
Escape Clause - A clause in a purchase contract that allows one party to withdraw from the contract under certain terms and conditions
Escrow - An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate
Escrow Account - The account in
which a mortgage servicer holds the borrower's escrow payments prior to
paying property expenses
An escrow account is money that is deposited with a third
party -- outside the buyer and the seller -- to be used to pay
various fees. A borrower typically provides funds that will pay taxes,
mortgage insurance, lease payments, hazard insurance premiums, and other
payments when they are due
An escrow payment by the holder of a mortgage is also known
as "impounds" or "reserves" in some states
When escrow funds are used to pay taxes, hazard insurance,
and other fees, it is called an escrow disbursement. Periodically, an escrow
analysis will be performed to determine if current monthly deposits provide
sufficient funds to pay bills when they are due
Escrow Payment - The portion of the monthly mortgage payment held by the lender to be applied to real estate taxes, hazard insurance and/or mortgage insurance
1031 Exchange - A 1031 tax deferred exchange allows you to defer capital gains by rolling-over all of the proceeds received from the sale of an investment property into the purchase of one or more other like-kind investment properties. At closing, proceeds are transferred to a third party, called a facilitator or qualified intermediary who holds them until they are used acquire the new property
A 1031 exchange is often referred to as a Starker exchange
Exclusion - An item of real property that is excluded in the sale such as an attached light fixture
Fair Market Value - The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept
Fannie Mae - FNMA (Federal National Mortgage
Association)- A New York Stock Exchange company and the largest
non-bank financial services company in the world. It operates pursuant to a
federal charter and is the nation's largest source of financing for home
mortgages
Over the past 31 years, Fannie Mae has provided nearly $2.8
trillion of mortgage financing for over 34 million families
Fee Simple
- The greatest possible
interest a person can have in real estate
Fee simple ownership provides the owner with unrestricted
powers to dispose of the owned property as the owner sees fit. Of all types
of ownership a person can have in real estate, fee simple provides the
greatest amount of personal control
FEMA - Federal Emergency Management Agency
FHA - Federal Housing Administration - An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing
FHA Mortgage - A mortgage that is
insured by the Federal Housing Administration (FHA). Also known as a
government mortgage
With FHA insurance, you can purchase a home with a low down
payment from 3 percent to 5 percent of the FHA appraised value or the
purchase price, whichever is lower
FHA mortgages have a maximum loan limit that varies depending
on the average cost of housing in a given region. In general, the loan limit
is less than what is available with a mortgage through a lender
FICO - Name given to credit score used to qualify for mortgages
Fiduciary - A person acting in a relationship of trust and confidence
First Deed of Trust or First Mortgage - A deed of trust or mortgage that has priority over all other voluntary liens secured against a property
Fixed Rate Mortgage - A mortgage in
which the interest rate does not change during the entire term of the loan
Fixed-rate mortgages, the most popular type of mortgage,
offer the peace of mind that your interest rate will remain the same for as
long as you have your loan. If you expect to live in your home for many
years, having the same interest rate may be your key concern. If you decide
that you like the stable, predictable payments of a fixed-rate loan, you
have the option of choosing from a variety of repayment terms: 15, 20, and
30 years are the most common. Typically, the longer the term of the
mortgage, the more interest you pay over the life of your loan. However,
stretching out your repayment term means your monthly mortgage payments will
be less than they would be with a comparable shorter-term mortgage. Lenders
offer a wide array of fixed-rate mortgages:
* Balloon Mortgages
* Biweekly Mortgages
Fixture - Personal property that becomes real property when attached in a permanent manner to real estate
Fizzbo (FSBO) - For Sale by Owner
Freddie Mac - Federal Home Loan Mortgage Corporation - An organization that purchases loans from banks and other loan originators
FSBO - For Sale by Owner - Property offered for sale without the assistance of a real estate broker
Gift Letter - A letter from parents who give all or part of the down payment monies to their children. Most lenders require that this letter states that this money does not have to be repaid
Graduated Payment Mortgage - A mortgage that has lower monthly payments in the early years. Payments increase over the term of the loan at predetermined intervals
GRI - Graduate of Real Estate Institute
Homeowner's Association - HOA - An organization of homeowners in a condominium complex or planned unit development which manages the common areas
Homeowner's Policy - An insurance policy that provides coverage for the home and its contents in the case of damage or loss due to common disasters such as fire. Coverage also usually includes theft, vandalism, loss of use and liability
HOW - Homeowner's Warranty - A type of insurance that covers repairs to specified parts of a house for a specific period of time. It is provided by the builder or property seller as a condition of the sale. It insures buyers and sellers against defect in a home they are buying or selling (usually in heating, electrical and plumbing systems)
HUD-1 Statement -A document that
provides an itemized listing of the funds that are payable at closing. Items
that appear on the statement include real estate commissions, loan fees,
points, and initial escrow amounts. Each item on the statement is
represented by a separate number within a standardized numbering system. The
totals at the bottom of the HUD-1 statement define the seller's net proceeds
and the buyer's net payment at closing. The blank form for the statement is
published by the Department of Housing and Urban Development (HUD). The
HUD-1 statement is also known as the "closing statement" or "settlement
sheet"
The HUD-1 Settlement Statement itemizes the amounts to be
paid by the buyer and the seller at closing. The (blank) form is published
by the U.S. Department of Housing and Urban Development (HUD)
Items on the statement include:
-- real estate commissions
-- loan fees
-- points
-- escrow amounts
The form is filled out by your closing agent and must be
signed by the buyer and the seller. The buyer should be allowed to review
the HUD-1 Settlement Statement on the business day before the closing
meeting to know the closing costs in advance
The HUD-1 Settlement Statement is also known as the "closing
statement" or "settlement sheet"
Installment - The regular periodic
payment that a borrower agrees to make to a lender
The regular periodic payment that a borrower agrees to make
to a lender. The installment is more often referred to as your monthly
mortgage payment
Installments, or monthly payments, can be made either monthly
or biweekly, depending on your mortgage type. Your approved lender may also
offer additional payment plans tailored to fit your needs
Interim Loan - Also called a swing or bridge loan. A temporary, short-term loan that enables a homebuyer to liquidate the equity in one home before it is sold to make a cash down payment on another home.
Jumbo Loan - A loan that exceeds mortgage amount limits. Also called a nonconforming loan
Junior Loan or Lien - Any mortgage, deed of trust or other lien against a property that is of lesser priority than the first mortgage or deed of trust
Lease Option - Nonprofit organizations may use the lease-purchase option to purchase a home that they then rent to a consumer, or "leaseholder." The leaseholder has the option to buy the home after a designated period of time (usually three or five years). Part of each rent payment is put aside toward savings for the purpose of accumulating the down payment and closing costs
Lessee (tenant) - One who contracts to rent property
Lessor (landlord) - An owner who enters into an agreement to rent to a tenant
Leverage - leverage is using someone else's money to purchase property
Lien - A legal claim against a property that must be paid off when the property is sold
Liquidated Damages - A predetermined sum, agreed to by the parties in a contract, to be considered as full damages if certain events occur
Listing Agreement - A contract between a property owner and an agent authorizing the agent to perform certain services involving the property
Loan-to value Ratio - LTV - The relationship between the principal balance of the mortgage and the appraised value (or sales price if it is lower) of the property. For example, a $100,000 home with an $80,000 mortgage has a LTV percentage of 80 percent
Lock-in - A written agreement in which the lender guarantees a specified interest rate if a mortgage goes to closing within a set period of time. The lock-in also usually specifies the number of points to be paid at closing
Market Value - The highest price a willing buyer would pay and a willing seller would accept for a property that is exposed on the open market for a reasonable period of time, assuming that both buyer and seller are well-informed and neither party is acting under undue pressure. You can get a good feel for the market value of a home by asking whether the listing agent compiled a "comparative market analysis" (CMA).
Material Fact - A fact that is not known to or readily observable by the buyer which materially affects the value or desirability of a property
Maturity - The date on which a mortgage or note becomes due
Mechanic's Lien - A lien against real property in favor of persons who have performed work or provided materials for the purpose of improving that property
MLS - Multiple Listing Service -
Mortgage - A legal document that pledges a property
to the lender as security for payment of a debt
Simply put, the mortgage is the legal document that gives the lender a legal
claim against your house should you default on your loan payments. The
mortgage indicates that a specific amount of money will be loaned at a
specific interest rate so that you can buy your home. Another way of
thinking of the mortgage is that you have possession of the property but the
lender has ownership until you have repaid your loan
The items stated in the mortgage include the homeowner's responsibility to:
-- pay principal
-- pay interest
-- pay taxes,
-- pay insurance on time,
-- pay to maintain hazard insurance on the property, and
-- adequately maintain the property.
The mortgage also includes the basic information found in the note
Should you consistently fail to meet these requirements, your lender can
seek full repayment of the balance of the loan, foreclose on the property,
or sell the property and use the proceeds to pay off the loan balance and
foreclosure costs
A deed of trust is used instead of a mortgage in some states
Mortgage - The conveyance or pledge of property as security of a loan
Mortgagee - The lender in a loan transaction
Mortgagor - The borrower who pledges or conveys his property to the mortgagee as security for the loan
Mortgage Insurance - A contract that insures the lender against loss caused by a mortgagor's default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan
NAR - National Association of Realtors
Negative Amortization - A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the entire principal and interest due. The amount of the shortfall is added to the remaining balance to create "negative" amortization - The borrower ends up owning more than the original principal
Nonrecurring Closing Costs - Closing costs that are paid on a one-time-only basis such as title insurance or points
Notary Public - One who has the authority to take the acknowledgments of persons signing documents
Note - A legal document that obligates a borrower to
repay a mortgage loan at a stated interest rate during a specified period of
time
One way to think of the mortgage note is that it is a legal "IOU." Often
called the promissory note, it represents your promise to pay the lender
according to the agreed upon terms of the loan, including when and where to
send your paymen.
The note lists any penalties that will be assessed if you don't make your
monthly mortgage payments. It also warns you that the lender can "call" the
loan -- demand repayment of the entire loan before the end of the term -- if
you violate the terms of your mortgage
Payoff Demand - A written request for a lender to provide exact figures of the amount owed by the borrower to pay the loan off in full
Personal Property - Any property that is not real property - Also known as chattel
PITI - Principle, interests, taxes and insurance
(PITI) are the four components of a monthly mortgage payment
The components of a monthly mortgage payment
- Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage
- Interest is the fee charged for borrowing money
- Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and hazard insurance
PMI - Private Mortgage Insurance - Also known as Mortgage Insurance, PMI is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require PMI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent
Point - A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage
Power of Attorney - A legal document that authorizes another person to act on one's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time
Pre-Approval - When you work with your lender to get
pre-approved, you are getting an indication of how much money you will be
eligible to borrow when you apply for a mortgage. This process occurs before
you complete an application for a loan
Pre-approval includes a screening of a borrower's credit history, and all
information you give to your lender will be verified when you apply for your
mortgage
Pre-Qualification - The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan
Preliminary Title Report - Report issued by the title company before the completion of a real estate sale. It indicates the condition of the title
Prepayment Penalty - A fee that may be charged to a
borrower who pays off a loan before it is due
If you pay off your mortgage before it is due, you may be charged a fee --
this is referred to as a prepayment penalty
Any amount that is paid to reduce the principal balance of a loan before the
due date -- such as the sale of the property, the owner's decision to pay
the loan in full, the owner's decision to pay additional money every month
to lower the principle or interest -- is considered prepayment
You may want to consider discussing the specifics of this fee as you
negotiate the terms of your loan with your lender
Principal - The dollar amount borrowed when a mortgage is obtained
Principal Balance - The remaining balance due on a loan
Private Mortgage Insurance (PMI) - Insurance written by a private insurance company that protects the lender in the event the borrower defaults on a loan. The borrower pays premiums
Proration - To allocate between buyer and seller their proportionate share of obligations that have been paid or that are due such as taxes, insurance premiums, interest, rental amounts. Prorations are usually made to the closing date
PUD - Planned Unit Development - A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners
Purchase and Sale Agreement - A written contract
signed by the buyer and seller stating the terms and conditions under which
a property will be sold
The Purchase and Sale Agreement is a written contract that is signed by the
buyer and seller. It states the terms and conditions under which a property
will be sold. It includes:
-- description of property
-- price offered
-- down payment
-- earnest money deposit
-- financing
-- personal items to be included
-- closing date
-- occupancy date
-- length of time the offer is valid
-- special contingencies
-- inspection
Qualified Intermediary - see 1031 Exchange or Starker Exchange
Quitclaim Deed - A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made
Real Property - Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof
Reconveyance - The legal document used when a debt is paid in full or satisfied. This document conveys the property back to the equity owner free of debt
Recording - The filing in the registrar's office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record
Refinance - Paying off an existing loan on a property and replacing it with another loan
Rescission - The cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent. Borrowers usually have the option to cancel a refinance transaction within three business days after it has closed
RESPA - Real Estate Settlement Procedures Act - A consumer protection law that requires lenders to give borrowers advance notice of closing costs
RMCR - Residential Mortgage Credit Report
RSPS - Resort and Second Home Property Specialist
Second Mortgage - A mortgage that has a lien position subordinate to the first mortgage
Seller Disclosure - Seller must disclose all property defects to the buyer before closing
Settlement - The final step before you get the keys
to your home is a formal meeting called the closing. It is at this meeting
in which ownership of the home is transferred from the seller to the buyer
Also called a settlement in some parts of the country, the meeting is
typically attended by the buyer(s), the seller(s), their attorneys if they
have them, both real estate sales professionals, a representative of the
lender, and the closing agent. The purpose is to make sure the property is
physically and legally ready to be transferred to you
Several closing costs will be paid at this meeting. These expenses are over
and above the price of the property and are incurred when ownership of a
property is transferred. Closing costs generally include a loan origination
fee, an attorney's fee, taxes, an amount placed in escrow, and charges for
obtaining title insurance, and a survey. Closing costs vary according to the
area of the country
Single Agency - One real estate broker represents either the buyer or the seller in a real estate transaction but NOT both
Specific Performance - A legal action to force the performance of a contract requirement
Starker Exchange or 1031 Exchange - A tax deferred exchange allows you to defer capital gains by rolling-over all of the proceeds received from the sale of an investment property into the purchase of one or more other like-kind investment properties. At closing, proceeds are transferred to a third party, called a facilitator or qualified intermediary who holds them until they are used acquire the new property
Statute of Limitation - A legal limit on the time period in which to initiate court action
Sweat Equity - Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash
Tax Lien - A lien that attaches to real property if the property owner fails to pay real estate taxes or income taxes when due
Term - The length of time over which the loan will be repaid
Termite Inspection - Homes in many parts of the
country must be inspected for termites before they can be sold. You should
receive a certificate from a termite inspection firm stating that the
property is free of both visible termite infestation and termite damage
The cost of the termite inspection is usually paid by the seller, and the
seller's real estate sales professional orders the inspection. You need to
make sure that the original certificate is delivered to your lender at least
three days before closing
This allows the lender to review the certificate and address any potential
problems
Title - A legal document evidencing a person's right to or ownership of a property
Title Cloud or Defect - Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by a quitclaim deed, release, or court action
Title Insurance - Insurance that protects the lender
(lender's policy) or the buyer (owner's policy) against loss arising from
disputes over ownership of a property
Your lender will require that you buy title insurance to ensure that you are
receiving a "marketable title." There are two types of title insurance
policies:
-- Lender's policy (mandatory): This protects the lender should a flaw in
the title be detected after the property has been purchased
-- Owner's policy (optional, but recommended): This protects you should a
flaw in the title be detected after the property has been purchased
Generally, the buyer pays the cost of both policies. Check with your
insurer, because you may receive a price break if you seek a combined
lender/owner policy or if you purchase a "reissue" policy from the company
that previously insured the title
Transfer Tax - State or local tax payable when title passes from one owner to another
Truth-In-Lending - A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate (APR) and other charges
Underwriting - The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower's creditworthiness and the quality of the property itself
VA - Veterans Administration - The Veterans
Administration is a federal government agency authorized to guarantee loans
made to eligible veterans under certain conditions. To obtain more
information, you can contact the U.S. Department of Veterans Affairs
The VA guarantee allows qualified veterans to buy a house costing up to
$203,000 with no down payment. Moreover, the qualification guidelines for VA
loans are more flexible than those for either the Federal Housing
Administration (FHA) or conventional loans
If you are a qualified veteran, this can be an attractive mortgage program.
To determine whether you are eligible, check with your nearest VA regional
office
Vested - Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn
Waiver - To release a right to require something such as waiving a contingency in a real estate contract
Zoning - Specifies how property in certain areas can be used
FASY REAL ESTATE - "Your SECOND home is our FIRST priority!"
609.398.8000 fax: 609.398.5084 cell: 609.602.4493
