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| real estate broker | a person licensed to arrange for the purchase and sale of real estate for a fee or commission. |
| exclusive buyer agent | a real estate agent who works for the buyer and not the seller. |
| purchase agreement | a contract between a homebuyer and a seller that includes a description of the real estate, its location, the purchase price, the possession date, and any other condition and terms of the sale. |
| earnest money | a deposit you make when you sign a purchase agreement to show that your offer is serious. |
| contingency clause | a part of a contract that calls for certain requirements to be met before the contract is binding. |
| mortgage | a type of secured loan used for buying property. |
| amortization | the process of paying back a loan in equal monthly installments. |
| private mortgage insurance (PMI) | an insurance policy that protects the lender from loss if the borrower defaults on the loan and the home goes into foreclosure. |
| escrow account | an account for holding money in trust for others. |
| fixed rate mortgage | a mortgage with a guaranteed fixed or unchanging interest rate for the life of the loan. |
| adjustable rate mortgage (ARM) | a mortgage with an interest rate that can be adjusted up or down periodically. |
| graduated payment mortgage | a mortgage that allows the buyer to pay low monthly payments at first and higher payments in the future. |
| subprime mortgage | a mortgage made by lenders who charge higher than prime rates to borrowers who have poor or no credit ratings. |
| home equity loan | a type of loan in which the borrower uses the equity in his or her home as collateral for the loan. |
| closing cost | a fee or settlement charge that must be paid before the sale of a home is final. |
| point | an amount that is charged by lenders at closing, and it equals one percent of the mortgage. |
| property survey | a map of the property drawn by a surveyor to show size, boundaries, and characteristics of a property. |
| appraisal | a written estimate of the value of real estate. |
| title | a legal document that proves ownership of property. |
| title insurance | a type of insurance that protects the buyer if problems with the title arise after the purchase. |
