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Glossary

Acceptance:
The seller’s written approval of a buyer’s offer.
Addendum:
An addition or change to an existing contract between two or more parties.
Adjustable Rate Mortgage (ARM):
An adjustment mortgage loan in which the interest rate can move up or down depending on current financial market position.
Agent:
A licensed person who represents buyers, sellers, or both in the sale or purchase of real estate property.
Amortization:
The schedule of payments from the start of the loan to the end.
Annual Percentage Rate (APR):
The total interest rate of a mortgage, including the original loan interest as well as any upfront interest paid in securing the loan. The APR will be different from the mortgage rate quoted because of inclusion of these items.
Appraisal:
A professional estimate of value of any property such as real estate. Virtually all financed mortgages will require an appraisal.
Assessment:
The dollar value of a property,as determined by the local tax office,which is used to determine the amount of your property taxes.
Broker:
Broker has several meanings in different situations. Most REALTORs? are "agents" who work under a "broker." Some agents are brokers as well, either working form themselves or under another broker. In the mortgage industry, broker usually refers to a company or individual that does not lend the money for the loans themselves, but broker loans to larger lenders or investors.
Buyer’s Agent:
A licensed Real Estate Agent that has made an agreement to exclusively represent the buyer, instead of the seller.
CFPB:
The Consumer Financial Protection Bureau (CFPB) is an an agency of the United States government responsible for consumer protection in the financial sector. CFPB jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies operating in the United States.
Closing:
The official process that administers the final transfer of the deed from the seller to the buyer, as well as finalize all aspects of the mortgage of the property, if any.
Closing Costs:
Money needed at the time of closing separate from the down payment. Some of the items include : pre-paids, loan origination fees, any legal fees, discount points, and recording fees. They usually total from 3% to 5% of the sales price of the home.
Comparable Market Analysis (CMA):
A professional comparison of the prices of similar houses in the same general area. A CMA is used to help determine the value of a property, whether a seller wants to sell or a buyer wants to buy.
Condominium:
Housing where the owner owns only the unit in which they live, from the interior walls inward, as well as a portion of the common area. Condominiums usually have monthly fees to offset the cost of common areas and insurance.
Contingencies:
These are conditions written into Real Estate offers and contracts to prevent a buyer from being held to buy a house that proves to be unsatisfactory for the reasons stated therein. Examples of contingencies are "This contract is subject to the buyer obtaining a satisfactory house inspection." or "Subject to the buyer being able to obtain a mortgage or to sell their present home."
Debt to Income Ratio:
The ratio of a borrowers outstanding debt as a percentage of their complete total gross income.
Deed:
A legal document that, when recorded with the local government, determines and records ownership of a property. The deed is transferred from seller to buyer at the closing.
Earnest Money:
Funds that are submitted with an offer to purchase which indicates a buyer’s good faith. Routinely, earnest money will need to be submitted at the time of the offer and remains in escrow until the time of closing, where it then is made a part of the down payment.
Equity:
The difference in dollars between the value of a property and the total of any unpaid mortgages or existing loans taken out against it.
Escrow:
Money that is held in reserve, by a third party, both prior to closing and after closing by the mortgage holder to pay future real estate taxes and homeowners insurance.
Fannie Mae (FNMA):
The Federal National Mortgage Association, is a shareholder-owned company that is the nation’s largest supplier of affordable home mortgage funds.
FHA mortgage:
A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a government loan.
Fixed Rate Mortgage:
A mortgage loan where the interest rate is determined at its beginning and continues in force unchanged throughout the life of the loan.
Fixture:
Personal property that becomes real property when attached in a permanent manner to real estate.
Flood Insurance:
Insurance that covers damage to physical property resulting from flooding. It is required by mortgage companies for homes in designated flood areas.
Foreclosure:
The legal process by which a mortgage lender regains ownership of the property from a defaulting owner.
Hazard Insurance:
Insurance coverage in the event of physical damage to a property from fire, wind, vandalism, or other hazards.
Homeowner’s Association:
A group of owners, condominium, townhouse or single family subdivision that decides upon general guidelines for the good of the community. HOA’s usually have monthly or yearly fees.
Homeowner’s Insurance:
An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.
Inspection:
A professional inspection of the complete home under consideration for purchase which looks for defects in the property for a fee.
Interest:
The amount of a mortgage loan payment that is considered the "charge" for using the lender’s funds.
Lien:
A legal claim against a piece of real property that can prevent it from being sold. Liens can be filed by unpaid contractors or other debtors in a legal process so that they will be paid to them when a property is sold.
Listing:
A real estate property for sale by a licensed Real Estate Brokerage firm and Agent.
Realtor:
The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® (NAR) and subscribes to its strict Code of Ethics.
TRID:
The U.S. Consumer Financial Protection Bureau (CFPB) issued a rule to integrate disclosures and regulations required by The Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). The final rule, called TILA-RESPA Integrated Disclosure (TRID), integrates existing disclosures with new requirements from the Dodd-Frank Act to improve consumer understanding of the mortgage process, aid in comparison shopping, and help to prevent surprises at the closing table.