REAL ESTATE GLOSSARY
ABSTRACT OF TITLE – An abstract of title is a history of the ownership of a real property, condensed to provide quick access to all pertinent information. There are several forms of title abstracts that may be used by Title Service Companies.
ADJUSTABLE-RATE MORTGAGE (ARM)
A common form of home mortgage loan, having an interest rate that changes according to a financial index.
When you make a mortgage payment, some of the payment is applied to the interest on the loan, and some to the principal. Over time the interest amount goes down, while the principal amount goes up. The payment remains the same.
ANNUAL PERCENTAGE RATE (APR)
When you are quoted an percentage rate on a loan, that is not the actual rate you will pay over the term of the mortgage. The APR is the effective rate, and is always higher than the quoted rate. The APR will always be disclosed in the closing documents.
Part of every real estate transaction is an appraisal of the property by a professional appraiser. Based on the actual sale prices of comparable homes in your area, the condition of the home in question, and other factors, it is the fair market value of the home.
Any increase in the value of a property, due to changes in the market, inflation, or other factors.
The value of your home for tax assessment purposes. Set by the public tax assessor, it may be quite different from the actual market value.
Any mortgage loan that can be taken over by a buyer when the property is sold. Normal loan qualifications will apply.
A mortgage where the entire remaining principal must be paid after a specific term. These are used for very specific purposes.
Rarely used today, these loans are used to make the down payment on a home when the buyer’s existing home has not yet been sold.
A Real Estate Broker is a person who generally owns a real estate agency, with Realtors or agents working under him or her. A Loan Broker is a person or company that arranges real estate loans between lender and borrower for a fee.
CERTIFICATE OF ELIGIBILITY (VA)
A document from the Veterans Administration that certifies a person’s eligibility for a VA Loan.
A real estate title that is free of liens or other legal questions about ownership of the property.
A meeting of buyer, seller, and agents that is final step of a real estate transaction. At the closing money changes hands, documents get signed, and the transaction is finalized.
Usually an employee of a Title Services Company, this person manages the closing process and makes sure all documents are properly signed and that all funds are properly distributed.