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| mortgage | loan for the purchase of property |
| appraisal | a professional appraiser's estimate of the market value of a property based on local market data and the recent sale prices of similar properties |
| survey | an assessment of property lines to determine the exact amount of land that a homeowner owns |
| contract | legally binding agreement between two parties concerning the terms of purchase or transfer of real property |
| earnest money | deposit given by the buyer to bind a purchase offer and which is held in escrow; at closing, it is applied to the purchase price |
| down payment | the money paid by the buyer to the lender at the time of the closing; the amount is the difference between the sales price and the mortgage loan/principal |
| principal | amount of money borrowed from a lender to buy a home, or the amount of the loan that has not yet been repaid |
| closing costs | costs to complete a real estate transaction in addition to the price of the home, may include: points, taxes, title insurance, appraisal fee, and legal fees. |
| home inspection | performed to evaluate the quality and safety of the home's plumbing, heating, wiring, appliances, roof, foundation, etc |
| property taxes | money that the owner of a property must pay to the government |
| homeowner's insurance | a policy that protects you and the lender from fire or flood, a liability such as visitor injury, or damage to your personal property |
| interest | money paid regularly at a particular rate for borrowing money |
| amortization | process of reducing the principal debt through a schedule of fixed payments at regular intervals of time, with an interest rate specified in a loan document |
| FHA | A mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA) |
| VA | a mortgage in the United States guaranteed by the U.S. Department of Veterans Affairs designed to offer long-term financing to eligible American veterans |
| equity | value of the property, less the loan balance and any outstanding liens and other debts against the property |
| refinance | is the process of paying off an existing loan by taking a new loan (usually with a lower interest rate) and using the same property as security |
| lender | business that provides loans to others |
| real estate agent | A person who facilitates the sale of real estate; networks with potential buyers, shows properties to them, and generally acts in a way that will help sell the property in the shortest possible period of time; receives a commission for his/her services, usually a percentage of the value of the property sold |
| market value | amount a willing buyer would pay a willing seller for a home |
| closing | final steps in the transfer of property ownership; buyer signs all documents and disbursements are paid |
| assessed value | value placed on a home by municipal assessors for the purposes of determining property taxes |
| settlement | also known as closing |
| counter-offer | an offer, made in response to a previous offer, that rejects all or part of it while enabling negotiations to continue towards a mutually-acceptable sales contract |
| pending | an offer has been made by buyer and accepted by seller but the sale (closing) has not happened yet |
| conventional mortgage | one that is not insured or guaranteed by the federal government |
| debt-to-income ratio | measures total debt burden; calculated by dividing gross monthly debt repayments, including mortgages, by gross monthly income |
| mortgage insurance | purchased by the buyer to protect the lender in the event of default (typically for loans with less than 20% down) |
| escrow | funds held by a neutral 3rd party until certain conditions of a contract are met and the funds can be paid out; also used by loan servicers to pay property taxes and homeowner's insurance |
| fixed-rate mortgage | type of mortgage loan in which the interest rate does not change during the entire term of the loan |
| lien | claim or charge on property for payment of a debt. With a mortgage, the lender has the right to take the title to your property if you don't make the mortgage payments |
| appraised value | estimate of the current fair market value |
| possession date | the date, as specified by the sales agreement, that the buyer can move into the property. Generally, it occurs within a couple of day of the closing date |
| pre-approval letter | letter from a mortgage lender indicating that a buyer qualifies for a mortgage of a specific amount. Also shows a home seller that you're a serious buyer |
| purchase offer | a detailed, written document which makes an offer to purchase a property, and which may be amended several times in the process of negotiations. When signed by all parties involved in the sale, the purchase offer becomes a legally-binding sales agreement |
| title | right to, and the ownership of, property; sometimes used as proof of ownership of land |
| clear title | refers to a title that has no legal defects |
| Truth-in-Lending Act | federal law that requires disclosure of a statement for consumer loans; statement includes a summary of the total cost of credit |
