|
Mortgage Terms
- FHA/VA Mortgage: Government insured or guaranteed mortgages that can make purchase more affordable than conventional loans
- APR: An expression of the relationship of the total finance charge to the total amount to be financed as required under the federal Truth-in-Lending Act. Tables available from any Federal Reserve bank may be used to compute the rate, which must be calculated to the nearest one-eight of 1 percent. Use of the APR permits a standard expression of credit costs, which facilitates easy comparison of lenders.
- Appraisal: An estimate of the monetary value of a property on the open market; an estimate of a property's type and condition, its utility for a given purpose or its highest and best use.
- As-is: Words in a contract intended to signify that no guarantees, whatsoever, are given regarding the subject and that it is subject and that it is being purchased exactly as it is found.
- Closing-The final transfer of the ownership of a house from the seller to the buyer, which occurs after both have met all the terms of their contract and the deed has been recorded.
- Closing Costs: Expenses of the sale (or loan refinancing) that must be paid in addition to the purchase price (in the case of the buyer's expenses) or be deducted from the proceeds of the sale (in the case of the seller's expenses). Some closing costs result from legal requirements; others are a matter of local custom and practice.
- Contract: A legally enforceable agreement to do, or not to do, a particular thing for a consideration.
- Contract of sale: The agreement between the buyer and seller on the purchase price, terms, and conditions necessary to both parties to convey the title to the buyer.
- Earnest Money: Money paid by the buyer, at the time of making an offer or entering into a contract to purchase, which is intended to show the buyer's purchase. Generally, earnest money is applied against the purchase price, but may be forfeited if the buyer fails to complete the purchase.
- Inspection: A formal survey of a home's structure and systems, often performed by a licensed professional.
- PITI: Principal, Interest, Taxes & Insurance, the four main parts of a monthly mortgage payment.
- PMI: Private Mortgage Insurance, which protects the lender in case of default by the borrower. PMI is often used to allow buyers to obtain financing with less than 20 percent down payment.
- Points: Where one point equals on percent of the total mortgage loan amount. Buyers often pay lenders a supplemental fee, calculated in points, to get a better mortgage interest rate.
- Pre-qualification: An informal determination by a lender or broker of how large a mortgage a buyer can afford.
- Title Insurance: Protection for lenders or homeowners against financial loss resulting from legal defects in the title.
|
