Eleven Real Estate Terms You Should Know Before Buying or Selling
If you’re new to the world of real estate, it can be a daunting endeavor and, in some cases, it may sound like your agent is speaking a completely different language. Whether you are a buyer or a seller, here is a list of eleven common real estate terms you should know as you venture out into the market.
Adjustable Rate Mortgage: a mortgage that permits the lender to adjust the mortgage’s interest rate periodically on the basis of changes in a specified index. Interest rates may move up or down, as market conditions change.
Appraisal: an estimate of real estate value, usually issued to standards of FHA, VA and FHMA. Recent comparable sales in the neighborhood is the most important factor in determining value.
Cloud on Title: any condition that affects the clear title to real property.
Deed: a written instrument, which when properly executed and delivered, conveys title to real property.
Easement: the right to use the land of another.
Encumbrance: anything that burdens (limits) the title to property, such as a lien, easement, or restriction of any kind. (also known as Deed Restriction)
Escrow Payment: that portion of a mortgagor’s monthly payment held in trust by the lender to pay for taxes, hazard insurance and other items as they become due.
Fixed Rate Mortgage: a loan that fixes the interest rate at a prescribed rate for the duration of the loan.
Mortgage: a legal document that pledges a property to the lender as security for payment of a debt.
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Private Mortgage Insurance (PMI): the amount paid by a mortgagor for mortgage insurance. This insurance protects the investor from possible loss in the event of a borrower’s default on a loan.
Title Insurance: an insurance policy that protects the insured (buyer or lender) against loss arising from defects in the title.
Still have questions regarding real estate…make sure to contact your local agent or broker for more information. They will happy to sit down and explain everything to you.About The Pro’s Real Estate Team