Adjustable-Rate Mortgage: Also know as an ARM, this term describes a mortgage in which the interest rate is adjusted periodically according to a preselected amount.
Annual Percentage Rate: Also know as APR, this is the yearly percentage rate that expresses the total finance charge on a loan over its entire term. The APR includes the interest rate, fees, points, and mortgage insurance.
Appraisal: A report made by a qualified person putting forth the estimate of property value.
Assessed Value: The tax value on your property that was put in place for taxation – usually set in place by the town you live in.
Capital Gains: The gains you make for selling your home used for tax purposes.
Closing: The end of a real estate transaction in which the deed is delivered, financials are acquired, signing of the note and the disbursement of funds necessary to complete the sale or loan transaction.
Closing Costs: The costs paid by the mortgage borrower in addition to the purchase price of the property which covers the loan origination fee, appraisal fee, credit report costs, title insurance, attorney’s fees, survey and any other prepaid items such as taxes, and insurance escrows.
Commission: Compensation for negotiating and working the process of a real estate transaction. This costs is usually a percentage of the selling price of the property.
Comparable Market Analysis: A written analysis of a houses of similar characteristics that have recently sold. This report helps determine if you are paying or selling for market value for a home.
Conventional Loan: A mortgage that is not obtained through a federally backed insured program.
Credit Report: A report breaking down an individual’s credit history.
Down Payment: Money paid to make up the difference between the purchase price and the mortgage amount.
Equity: Portion of a properties value that is over and above anything owed on the property such as mortgages or liens.
Fixed-Rate Mortgage: A mortgage in which an interest rate is fixed for the entire term of the loan and payments remain the same over the life of the loan.
Foreclosure: A legal procedure where the mortgage company that holds the interest in the property is sold to pay the defaulting borrower’s debt.
Good Faith Estimate: A document provided by the lender that tells the borrower the approximate costs they will pay at or before the closing of the loan.
House Inspection: A thorough evaluation and written report of a home’s current condition both inside and outside the home. You can use this report to ask the seller to make repairs that are outside of the buyers comfort level for moving forward with the purchase of the home.
Interest Rate: The percentage of an amount of money which is paid for its use for a specified time.
Mortgage: The conveyance of an interest in real property given as security for payment of a loan.
Multiple Listing Service: An internet based program for real estate agents that provides descriptions and documents for most of the houses listed for sale in the area.