Adjustable mortgage rate (ARM)
A mortgage loan whose interest rate adjusts according to a market index. This means that as the interest rate goes up or down, so does your mortgage payment.
A term used to describe the process of paying off a loan over a predetermined period of time at a specific interest rate. The amortization of a loan includes payment of interest and a portion of the outstanding principal balance during each payment cycle.
The amount a professional appraiser determines your home and its property to be worth.
A short-term loan collateralized by the buyer’s present home (which is usually for sale) that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as “swing loan”.
One unit in a complex of many. When you purchase a condominium, you solely own what is inside your walls and you jointly own the hallways, exterior, and common areas. You also pay a monthly fee for the management of these areas.
The cost required to officially charge the ownership of the property. Buyers and sellers have different costs they are responsible for at closing.
Also called settlement, the signing of documents and payment of funds to legally transfer house and its property from the buyer to the seller.
The score that tells a borrower how much of a credit risk you will be.
A report detailing a borrower’s credit history. A few items shown are the amount of the borrower’s debt, their timeliness of making payments, and their credit rating.
The document that legally transfers the title of a property to the purchaser.
Violation of a mortgage contract.
The number of homes that a local jurisdiction allows to be built on a certain acre of land.
A “good faith” deposit submitted with a purchase offer to show that the potential home buyer is serious about buying the house.
The exterior of a specific model. A floor plan may have multiple elevations for you to choose from, each with varying architectural styles, building materials and exterior treatments.
When a third party handles funds or documents for the buyer, seller or both.
What your home is valued at after the balance of what you owe is subtracted.
Fixed Rate Mortgage
A mortgage that has an interest rate that stays the same for the life of the loan. This means your monthly payment will remain constant.
Good Faith Estimate
An estimate, given to the borrower by their lender, to show what settlement costs they will be responsible for and how much they will be.
Insurance against damage to your home from vandalism, fire and other hazards. You are required to carry insurance equal to the value of your home.
A professional inspection of a home to review the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.
An association that manages the care of common areas of a community. The home owner pays a monthly or quarterly fee to this association for maintenance costs.