|
Real Estate Agent & Realtor® 614-554-7705 |
|
|
|
|
Helpful Definitions for Real EstateA B C D E F G H I J K L M N O P Q R S T U V W X Y Z Agent An individual who represents a seller, a buyer or both in the purchase or sale of real estate. Amortization The gradual repayment of a mortgage through monthly (e.g., installment) payments. In the early years of a mortgage, most of the monthly payment goes toward interest. Later in the mortgage, more of the payment goes toward reducing the loan's principal balance. Annual Percentage Rate (APR) The TOTAL interest rate of a mortgage, including the stated loan interest as well as any upfront interest paid in securing the loan. The APR will invariably differ from the mortgage rate quoted due to the inclusion of these items. Appraisal An estimate of value of a Real Estate property by a professional third party. Virtually all non-owner financed mortgages will require an appraisal and is generally paid for by the buyer. Adjustable Rate Mortgage (ARM) A loan on which the monthly payments will increase or decrease over time, based on changes in the ARM's interest rate index. ARM payments typically are adjusted every six months or once a year. Common indices to which ARMs are tied include the 11th District Cost of Funds, one-year T-note and six-month T-bill. Arbitration The term used to describe a form of dispute resolution that occurs outside of the court system. Basically, arbitration is a dispute resolution system where the parties submit arguments and evidence to a neutral person, know as the arbitrator, who then renders a decision, called an award, based upon the evidence and arguments presented. Assessment The value of a property as determined by the local tax jurisdiction which is used to determine the amount of your property taxes. Buyer's Agent A Real Estate Agent that has made an agreement to represent the buyer exclusively, rather than the seller. Caps Provisions of an ARM limiting how much the interest rate can change at each adjustment period (e.g., every six months, once a year) or over the life of the loan (rate cap). A payment cap limits how much the payment due on the loan can increase or decrease. Comparable Market Analysis (CMA) A comparison of the prices of similar houses in the same general geographic area. A CMA is used to help determine the value of a property, either for a seller or a buyer. Closing The process that effects the final transfer of the deed from the seller to the buyer, as well as finalize all aspects of the mortgage of the property. Closing Costs Funds needed at the time of closing (separate from and in addition to the down payment). Loan origination fees, discount points, Attorney fees, recording fees and pre-paids are some items that may be included. They often will total from 3% to 5% of the price of the home, payable in cash. Contingencies These are conditions - or "safety valves" written into Real Estate offers and contracts to prevent a buyer from being forced to buy a house that is unsatisfactory - either structurally or financially. Examples of contingencies are "This contract is subject to the buyer obtaining a satisfactory whole house inspection." or "Subject to the buyer being able to obtain a mortgage." Condominium Housing where the owner owns only the unit in which they live - from the interior walls inward, generally - as well as a portion of the common area. Debt to Income Ratio The ratio of monthly debt payments to monthly gross income. Lenders use a housing DTI ratio (house payment divided by monthly income) and a total DTI ratio (total debt payments including the house payment divided by monthly income) to determine whether a borrower's income qualifies him or her for a mortgage Deed The document that, when recorded with your local government, determines ownership of a property. Transferred from seller to buyer at closing. Downpayment The portion of the home's purchase price the buyer pays in cash. Earnest Money Money that is submitted with an offer to purchase which indicates a buyer's seriousness and good faith. In virtually all cases, earnest money will need to be submitted at the time of the offer and remains in escrow until the time of closing, at which time it becomes part of the downpayment. Equity The difference between the value of a property and the total of any outstanding mortgages or loans against it. Escrow Funds held in reserve both prior to closing (for example the earnest money and deposit) by a third party and after closing by the mortgage company to pay future taxes and homeowners insurance. In some areas, "escrow" also refers to the closing process (def - The holding of documents and money by a neutral third party prior to closing). Fixed Rate Mortgage A mortgage loan where the interest rate is established at its origination and continues unchanged through the life of the loan. FSBO (For Sale By Owner) Real Estate that is sold without the assistance of an Agent. FSBO can refer to both the individual selling the property "They are a FSBO," or the property itself "that house is a FSBO." Foreclosure The process through which a lender takes back property from a defaulting owner and re-sells it. Hazard Insurance A policy which protects against the damage to a property caused by fire, wind or other hazards Homeowner's Association An owners group, whether in a condominium, townhouse or single family subdivision that establishes general guidelines for the operation of the community, as well as its standards. Homeowner's Warranty A policy that covers certain repairs (e.g., plumbing or heating) of a newly purchased home for a certain period of time. Inspection A whole house inspection of a home being considered for purchase which looks for defects in the property. Interest That portion of a mortgage payment that is the "charge" for using the lender's funds. Impound Account An account established by a lender to collect a borrower's property tax and insurance payments. Impound accounts are normally required on mortgages with down payments of 10 percent or less. Lien A legal claim against a piece of property that can prevent it from being sold unless the lien is satisfied (paid off). Liens can be filed by unpaid contractors or other debtors in a legal process so that they will be paid when a property is sold. Listing A property for sale by a Real Estate Brokerage and Agent. Loan Origination Fee A charge imposed by the lender, payable at closing, for processing the loan. Lock-in An agreement by the lender at the time of mortgage application or shortly thereafter, to write the mortgage at a specific interest rate, whether rates rise or fall up to the date of closing. Obviously a good move if rates are rising, not so good if they are falling. Lock-ins have specific expiration dates, such as 30, 60 or 90 days in the future. LTV (Loan to Value) The ratio of the amount of the mortgage as a percentage of the value of the property. MLS (Multiple Listing Service) A listing (almost always computerized) of all the properties for sale by Real Estate Brokerages in a given geographical area. Mortgage Banker A company which originates mortgages for sale into the secondary mortgage market (e.g., to Fannie Mae and Freddie Mac). Mortgage Broker An individual or company that arranges mortgage financing between a borrower and a lender. Mortgage Interest Deduction The ability of mortgage borrowers to deduct the interest paid on a home loan for purposes of federal and state income taxes. Origination Fee A fee charged by a lender for making a mortgage PITI Principal, interest, taxes and insurance -- the primary components of a monthly mortgage payment. PMI (Private Mortgage Insurance) Required on virtually all conventional loans with less than 20% downpayment. Although the payments for PMI are included in your mortgage payment, it protects the lender should you default on the loan. On FHA loans, you will pay a MIP (Mortgage Insurance Premium) which accomplishes the same purpose. Points 1 point is equal to 1% of the loan value, paid at closing. Points can be loan origination fees or "discount points" which reduce the interest rate of the loan (you are actually paying a finance charge up front). When a lender, for example, quotes a rate of 8 1/2% with 1 + 1 points, 1 point is for the origination fee and 1 point is for the discount fee. Prequalification The first stage of a mortgage application where the lender will run a basic credit report and determine your debt to income ratio in order to see how much mortgage you qualify for. Pre-paids Paid for (in cash) at closing for such items as homeowners insurance for one year and real estate taxes for several months. Principal The amount borrowed for a mortgage loan. Your monthly mortgage payment will be applied to both the interest and the principal (be assured, though, that the lions share will go to the interest portion in the first years of the loan). Property Tax An annual or semi-annual tax paid to one or more governmental jurisdictions based on the amount of the property assessment. Generally paid as part of the mortgage payment. Realtor® A real estate broker or agent who, as a member of a local Board/Association of REALTORS, a state association of REALTORS and the NATIONAL ASSOCIATION OF REALTORS, adheres to high standards of professionalism and a strict code of ethics. Recording The act of entering deed and/or mortgage information into public record with your local government jurisdiction. Seller Financing A financing agreement in which a seller provides part (or all) of the financing needed by a buyer to purchase the seller's home. Title A legal document establishing the right of ownership of a property. Title Insurance Protects your title - your ownership rights - from claims against it. Paid at closing, title insurance may be the responsibility of the buyer, the seller, or both, depending on what is traditional in your locality. Underwriting The process of evaluating a loan application to determine if it meets the lender's standards. Warranty Covers either most of the house in a new home, or selected items (for example the heating and air conditioning system or the water heater) in a used home. Warranties can vary widely and are optional in used homes (paid for by either the buyer or the seller). Zoning Laws that govern specifically how a zoned area can be used. For example, an area may be zoned for single family residential, condominiums, commercial or retail, or a mix of two or more uses.
|
|
.
Send mail to webmaster@realestategreatercolumbus.com with questions or
comments about this web site.
|
Rich
Shearrow
Under
Construction. Please check back later for updates.