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A | 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
A
Abstract (of title)
- A written
summary of the title history
of a real property.
Acceleration Clause
- A provision
of a mortgage or note which
provides that the entire outstanding
balance will become due and
payable in the event of default.
ARM (Adjustable Rate Mortgage)
- A mortgage
in which the interest rate is
adjusted periodically, based
on the movement of a financial
index.Indes like Wall Street,
LIBOR etc
Amortization
- Repayment
of loan by installment payments.
As the payments are made, the
debt is reduced so that at the
end of fixed period or term,
no money will be owed.
APR (Annual Percentage Rate)
- The annual
percentage rate refers to the
total cost of the loan, expressed
as a yearly rate.It is different
than interest rate which just
cover the interest part but
APR covers interest as well
as the cost associated with
mortgage origination and servicing.
Application Fee
- That part
of the closing costs pre-paid
to the lender at time of application
to cover initial expenses.
Appraisal
- A report
made by a qualified person as
to the value of a property as
of a given date.
Assessed Value
- The value
placed on a piece of real estate
by the taxing authority for
the purpose of taxation. Also
called an assessment.
Assumption of Mortgage
- The purchaser
takes over mortgage payments
for the balance of the loan,
assuming primary liability.
Unless specifically released
by the lender, the seller remains
secondarily liable.
B
Balloon Mortgage
- A mortgage
with periodic payments that
do not fully amortize the loan.
The outstanding balance of the
mortgage is due in a lump sum
at the end of the term.
Bridge Loan
- A short-term
loan secured by the equity in
an as-yet-unsold house, with
the funds to be used for a down
payment and/or closing costs
on a new house. There is no
payment of principal until the
house is sold or the end of
the loan term, whichever comes
first. Interest payments may
or may not be deferred until
the house is sold.
Broker
- The person
who, for a commission or a fee,
brings parties together and
assists in negotiating contracts
between them.
Buydown
- Money advanced
by an individual (e.g. builder,
seller, buyer, lender, developer)
to lower monthly mortgage payments
for a few years or the whole
term.
C
Cap (interest rate)
- The maximum
interest rate increase allowable
on an adjustable rate mortgage.
Does not result in negative
amortization. See Negative amortization.
Cap (payment rate)
- The maximum
payment amount increase allowable
on an adjustable rate mortgage.
May result in negative amortization.
See Negative amortization.
Certificate Of Title
- A statement
that shows ownership of property,
stating that the seller has
clear legal title.
Closing
- The concluding
day of the real estate transaction,
when title and deed pass from
seller to buyer, the buyer signs
the mortgage and pays the purchase
price and closing costs.
Closing Costs
- Expenses
(over and above the price of
the property) incurred by buyers
and sellers in transferring
ownership of a property. Also
called "settlement costs."
Closing Statement
- A financial
disclosure giving an account
of all funds received and expected
at closing, including the escrow
deposit for taxes, hazard insurance
and mortgage insurance for the
escrow account.
Commission
- An agent's
or broker's fee for bringing
the principals together and
helping to negotiate a real
estate transaction, often a
percentage of the sales price
or flat fee.
Commitment
- An agreement,
frequently in writing, between
a lender and a borrower to loan
money at a future date, subject
to certain conditions.
Comparables
- Refers to
similar properties used for
comparison purposes in the appraisal
process. These properties will
be reasonably the same size
and location, with similar amenities
and characteristics, so that
the approximate fair market
value of the subject property
can be determined.
Condominium
- Ownership
of a single unit in a multiunit
building or complex of buildings.
Along with this goes a share
of ownership of the common areas.
Contingency
- A condition
that must be met for a contract
or a commitment to remain binding.
Conventional Mortgage
- Any mortgage
loan that is not insured by
FHA, guaranteed by VA, of funded
by a government authorized bond
sale or grant.
Convey
- To transfer
real estate from one person
to another.
Credit Report
- The report
to a prospective lender on the
credit standing of a prospective
borrower.
D
Deed
- A legal written
document by which title to property
is transferred.
Default
- Failure to
fulfill the terms as agreed
to in the mortgage of note.
Down Payment
- The difference
between the sale price of a
property and the mortgage amount.
Due-On-Sale
- A clause
in a mortgage which gives the
lender the right to require
immediate repayment of a mortgage
balance if the property changes
hands.
E
Earnest Money
- The deposit
money given to seller or his
agent by the potential buyer
at the time of the purchase
offer. If the offer is accepted,
the money will become part of
the down payment.
Easement
- A right to
the limited use of land owned
by another. An electric company,
for example, could have an easement
to put up electric power lines
over someone's property.
Encumbrance
- Anything
that affects or limits the title
to a property, such as outstanding
mortgages, easement rights or
unpaid property taxes.
Equity
- The value
in which the owner has in real
estate over and above the mortgages
against it. When the mortgage
and all other debts against
the property are paid in full,
the owner has 100% equity in
his property.
Escrow
- Funds and/or
deed left in trust to a third
party. Generally, a portion
of the monthly mortgage payment
is held in escrow by the lender
to pay for taxes, hazard insurance
and yearly mortgage insurance
premiums.
F
First Mortgage
- A mortgage
that has a primary lien against
a property.
Fixed-Rates Mortgage
- A mortgage
with an interest rate and monthly
payments that remain constant
over the life of the loan.
Fixture
- Property,
such as a hot water heater or
plumbing fixture, that has become
permanently attached to piece
of real estate and goes with
the property when it is sold.
Flood Certification
- An independent
agency report required by the
lender to determine whether
a property is located in a flood
hazard zone, which would then
require a federally mandated
flood insurance policy.
Foreclosure
- A legal procedure
in which property mortgaged
as security for a loan is sold
to pay the defaulting borrower's
debt.
G
Graduated Payment Mortgage
- A fixed rate
loan with monthly payments that
start low, increasing by a fixed
amount for a specific number
of years. After that period,
the payments typically remain
constant for the duration of
the loan.
Gross Income
- Normal income,
including overtime, prior to
any payroll deductions, that
is regular and dependable. This
income may come from more than
one source.
H
Hazard Insurance
- Insurance
protection against damage to
a property from fire, windstorms,
and other common hazards.
- Homeowner's
Insurance
- An insurance
policy that covers the dwelling
and its contents in case of
fire or wind damage, theft,
liability for property damage
and personal liability.
HUD-1 Form
- See Real
Estate Settlement Statement.
I
Income Property
- Real estate
that is owned for investment
purposes and not used as the
owner's residence.
- Interest
- A charge
paid for the use of money.
Interim Financing
- See Bridge
Loan.
No
terms listed.
No
terms listed.
L
Land Contract
- When the
buyer agrees to make payments
directly to the seller at pre-negotiated
terms. The seller agrees to
deed the property to the buyer
upon completion of the agreement.
The buyer becomes the owner
of equity in this type of sale.
(Also see Owner Financing.)
Lien
- A legal claim
on a property used as security
for a debt.
Loan-To-Value Ratio
- The relationship
between the amount of the mortgage
and property value, usually
shown as a percentage.
M
Market Value
- The price
at which a property will sell,
assuming a knowledgeable buyer
and seller, both operating without
undue pressure.
Mortgage
- A contract
in which a borrower's property
is pledged as security for a
loan which is to be repaid on
an installment basis.
Mortgage Note
- A written
promise to pay a debt at a stated
interest rate during a specified
term. The agreement is secured
by a mortgage.
Mortgagee
- The lender
in a mortgage contract.
Mortgagor
- The borrower
in a mortgage contract.
N
Negative Amortization
- A loan in
which the outstanding principal
balance goes up instead of down
because the monthly payments
are not large enough to cover
the full amount of interest
due. Also called deferred interest.
O
Offer to Purchase
- A written
proposal to buy a piece of real
estate that becomes binding
when accepted by the seller.
Also called a sales contract.
Origination Fee
- A fee charged
for the work involved in the
evaluation preparation and submission
of a proposed mortgage loan.
Owner Financing
- A purchase
in which the seller provides
all or part of the financing.
P
PITI
- An acronym
for payments to lender that
cover principal, interest, taxes
and insurance on a property.
Plat
- A map of
a piece of land showing boundary
lines, streets, actual measurements
and easements.
Point
- A fee paid
to the lender on closing day
to increase the effective yield
of the mortgage. A point is
one percent of the amount of
the mortgage loan. Also called
a discount point.
Prepayment Penalty
- A charge
paid to the lender by the borrower
if a mortgage loan is repaid
before its term is over.
Pre-Approval
- A commitment
by a lender to extend credit
provided that specific conditions
are met.
Pre-Qualification
- A preliminary
assessment of a buyer's ability
to secure a loan, based on a
specific set of lending guidelines
and buyer representations made.
This is not a guarantee or commitment
by a lender to extend credit.
Prime Rate
- The interest
rate charged by banks to their
preferred corporate customers,
it tends to be an estimator
for general trends in short
term interest rates.
Principal
- The amount
borrowed or remaining unpaid;
also, that part of the monthly
payment that reduces the outstanding
balance of a mortgage.
PMI (Private Mortgage Insurance)
- Insurance
written by a private mortgage
insurance company to protect
the lender against losses caused
by mortgage default. This is
commonly required on loan transactions
involving less than a 20% down
payment or equity position.
Q
Qualifying Ratios
- Guidelines
used by lenders to determine
how much of a loan a home buyer
qualifies for. Often referred
to as debt-to-income ratios
(or DTI).
R
Real Estate Settlement Statement
- Final settlement
statement often referred to
as the HUD-1 form, used to itemize
buyer, seller, broker, and lender
charges and credits at closing.
Realtor
- A real estate
broker or sales associate affiliated
with the National Association
of Realtors.
Recording Fee
- The charges
made by the register of deeds
to record the legal documents.
Refinancing
- Repaying
a debt with the proceeds of
a new loan, using the same property
as collateral or security.
S
Second Mortgage
- A loan issued
on property that is already
encumbered by an existing mortgage
(ie: the first mortgage). The
second mortgage is subordinate
to the first.
Secondary Mortgage Market
- The market
wherein home loans are sold
by the lender after closing
to Fannie Mae, Freddie Mac or
a variety of other institutional
investors.
Survey
- A map prepared
by an engineer or surveyor charting
a particular piece of real estate.
T
Title
- Ownership
of a property. A clear title
is one without any outstanding
liens or encumbrances. A cloud
on title refers to any outstanding
liens or encumbrances which
could impair the title.
Title Insurance Policy
- A policy
designed to protect the buyer
or lender after closing from
financial losses arising from
any defects in the title that
may have occurred prior to purchase.
Title Search
- A check of
public record to disclose the
past and current facts regarding
ownership of a particular piece
of property.
Transfer Tax
- In some areas
city, county or state taxes
imposed when property passes
from one person to another.
Truth-In-Lending
- Federal law
that requires lenders to disclose
the terms and conditions of
a mortgage, including the APR,
based on certain charges incurred
by the borrower. If the charges
were $0, the APR would be equal
to that actual interest rate
on the loan.
U
Underwriting
- The process
of evaluating a loan application
to determine the risk involved
for the lender.
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*Rebate
is available only to buyers who close
escrow/proceed to final settlement
with Emeraldhome LLC. acting as
their sole and exclusive agent in
the purchase of real estate in Texas
The Rebate is valid only if the broker
commission actually received at the
close of escrow/settlement is 3% or
more. Reduced cash-back amount is
available for lower commission received.
Occasionally, the seller and/or listing
broker in a transaction will offer
the broker representing the buyer
a bonus or other additional incentive
over and above the cooperating brokerage
commission. Any such bonuses or other
additional incentives are separate
and apart from the cooperating brokerage
commission actually received and buyer
is not entitled to a rebate on any
bonus or other additional incentive
monies paid over and above the cooperative
broker commission. For homes with
a final sales price of $99,999.99
or less, the rebate is not applicable.
The Rebate will be paid or credited
to the party or parties named as the
"buyer(s)" or "borrower(s)"
on the HUD-1 Closing Statement or
equivalent official closing statement.
All buyers must sign a Buyer's
Representative Agreement and/or a
Rebate Agreement before any rebate
will be issued. This rebate program
is only available where permitted
under state and federal law and when
not otherwise prohibited by the buyer's
lender(s). There may be tax consequences
to the rebate. If you need legal or
tax advice, you should consult with
the appropriate professional. Offer
subject to conditions, limitations,
exclusions, modifications, and/or
discontinuation without notice. |
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