1003 formcommonly used mortgage loan application developed by Fannie Mae. Sometimes called the Uniform Residential Loan Application.
Acceptancea verbal or written acceptance of an offer to buy a home, made from the seller to the buyer.
Acrea land measurement commonly used in U.S. property negotiations. One acre equals 43,560 square feet.
Adjustable rate mortgage, ARMa type of mortgage loan characterized by interest rates that automatically adjust or fluctuate in concert with certain market indexes. Generally an ARM begins with an introductory or initial interest rate, which then may rise or fall, but monthly payments may not exceed the ARM loan cap.
Annual percentage rate, APRthe truest cost of a home loan. Per the Truth in Lending Act, all mortgage lenders must disclose their APR. In the mortgage industry, APR may include fees such as documentation fees, private mortgage insurance and more.
Appreciationthe measurable value that increases on a home or property. Market improvements and home renovations often drive appreciation value.
Assessed valuea value determined by local government assessors and used to calculate annual property or real estate taxes.
Assumable mortgagea type of mortgage that may be transferred, interest rate and all, from seller to buyer - like FHA loans.
Attorney feesfees possibly due during closing.
Balloon mortgagea short-term high-risk loan that leaves the borrower with a potentially high loan balance at the end of the loan term. Some of these loans automatically renew at prevailing rates, whereas others may require the balloon payment be paid in full.
Borrowerthe individual or individuals extended a loan and mortgage for the purchase of a house and/or property. Borrower is responsible for making all payments and fees associated with the loan over the life of the loan. Legalmortgagor.
Bridge loana short-term loan used to quickly effect a sale while pending more conventional real estate financing. While not popular, a bridge loan can be useful particularly for certain commercial real estate deals.
Buy downa situation in which a seller or lender kicks in a sum of money in order to lower the initial interest rate on a home loan to make a sale more appealing for the buyer.
Buyer's agentreal estate agent that works on behalf of the homebuyer.
Capmaximum monthly payment a borrower may be expected to pay on a loan.
Capital gainprofit earned on an asset, such as a home or property.
Capital gain taxa tax levied against the profit made on the sale of a home and/or property.
Closingthe formal documented sale of a home and/or property that includes signing all documents associated with the exchange and payment of required closing fees. A closing agent usually oversees this process.
Closing agentthe person responsible for mediating the closing, documenting the process and assuring all associated paperwork is completed. May be an attorney or official from a title or mortgage company.
Closing costsreal estate transaction related fees payable by the buyer and seller during a closing. A wide variety of fees may be included, such as title search, attorney's fees, origination fees, documentation fees and more.
Closing statementan itemized list of closing costs.
Co-borrowera borrower with good credit that agrees to take on shared responsibility for a home loan so that the primary borrower may purchase property.
Combination loana type of loan that combines an initial loan typically for new home construction, with a second conventional home loan that supplants the first.
Commitment lettera document from a lender to a borrower that officially lays out the terms of a loan.
Comparable sales, compssimilar home sale prices in the region used as a metric in the calculation of a home's appraised value.
Conforming mortgagea conventional loan characterized by loan limits that fall within those guidelines laid out by the Government Sponsored Enterprises (GSEs) such as Freddie Mac and Fannie Mae.
Construction loana short-term loan for new home construction that is supplanted with a conventional long-term home loan. See combination loan.
Contingencyany one of a number of common clauses added to real estate agreements that provide buyer or seller rights during various stages of a transaction.
Creditmoney extended from a lender to a borrower based on that borrower’s credit history.
Date of closingdate upon which all paperwork associated with a mortgage/property sales exchange is finalized.
Date of possessionactual date upon which the buyer will move into a home or property; it is usually the closing date, but may be another agreed upon date as well.
Debtamount of money a borrower owes to creditors. A metric used to calculate creditworthiness.
Deedan official and public document that establishes property ownership.
Deed of reconveyancewhen a borrower has paid in full on a mortgage, the lender then awards the borrower a deed of reconveyance. This document becomes also a part of public record. Also known as reconveyance deed and recon.
Deed of trusta document that in some states is used in place of a mortgage. A deed of trust may be held by a third party, similar to a mortgage.
Defaultinability of borrower to make regular and consecutive payments on a loan.
Depreciationthe measure of loss in value of a home or property. Depreciation could be driven by poor economic factors or property damage.
Discount pointsa measure of interest; 1 point = 1% of the home loan value. Homebuyers may pay points up front, a type of buy-down, in order to lower their overall interest rate and mortgage payment.
Earnest moneya sum of money usually put up by the buyer when an offer on a home or property is made. The purpose of earnest money is as a token of good faith, a symbol that the buyer is seriously pursuing purchase.
Equitythe measurable value of a home or property above and beyond that owed on a loan. A value upon which many homeowners often borrow.
Escrow accounta separate account held by a mortgage lender out of which required property bills, separate from the loan payment, are made. Property taxes and insurance are examples of costs paid out of escrow. Sometimes called an “impound account.”
Fair-market-valuethe price that a piece of property will bear in the current market.
Fannie Maea private mortgage corporation that began as a government subsidized entity in the late 30s. Today Fannie Mae, along with Freddie Mac, is a government sponsored enterprise (GSE) and together they are responsible for setting annual conforming loan limits and assuring that mos