Understanding real estate terminology can be of great assistance in buying or selling a home, commercial property, or investment property. To help you understand words commonly used in real estate transactions, I have prepared a list of important real estate and mortgage terms.
Appraisal
An appraisal is an educated estimate of the value of a property on a certain date given by a qualified professional, usually after an inspection of the property.
As is
"As is" is a term implied in most Agreements of Purchase and
A balloon loan is a real estate loan where there is a lump sum due at the end of the loan. This normally encourages an individual to refinance prior to the end of the term of the loan.
Bankruptcy
a) A person who has done any of the acts that by law entitle his creditors to have his estate administered for their benefit; b) a person judicially declared subject to having his estate administered under the bankrupt laws for the benefit of his creditors; c) a person who becomes insolvent.
Bid
An offer of a price either for payment or acceptance is a bid.
Credit Risk
Credit risk is an estimate of the amount of credit that can be extended to a company or person without undue risk.
Credit Union
A credit union is a cooperative organization that makes loans to its members at low interest rates.
FHA Real Estate Loans
An FHA loan is a loan insured by the United States Federal Housing Administration.
Fixed-rate mortgage
Fixed-rate mortgages are mortgages in which the interest rate remains the same for the entire term of the loan. The advantage to a fixed-rate mortgage is that if you lock in a relatively low rate, your payment won't go up as rates do.
Home Equity Loan
Home equity loans are loans or credit lines secured by the equity a borrower has in a home.
Home Loan
a) Money lent at interest; b) something lent usually for the borrower's temporary use.
Hybrid loans A hybrid loan combines a fixed period with an adjustable component. Usually these loans are fixed for a period of time after which the loan becomes adjustable and is dependent on current rates.
Interest Rate
The interest rate is the monthly effective rate paid (or received if you are a creditor) on borrowed money. It is expressed as a percentage of the sum borrowed.
Jumbo loan
A jumbo loan is any residential or commercial loan exceeding the guidelines of Fannie Mae and Freddie Mac.
Market Value
An asset's market value is the price it would fetch in the market if it were sold in the current marketplace.
MLS- IDX
IDX, or broker reciprocity, is an arrangement for sharing property listings between brokers within the Mulitple Listing Service.
Mortgage
A mortgage is a temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt.
Property Tax
Property tax is a tax levied on real or personal property.
Title Insurance
Title insurance guarantees the ownership and quality of a title to land.
VA Real Estate Loans
A VA loan is a loan in the
Variable or adjustable-rate mortgage
With an adjustable rate mortgage, the rate of the loan can change throughout the term of the loan. The rate of the loan is based on adding points to a fixed base.
