Adjustable rate mortgage (ARM):
A
loan with an interest rate that fluctuates according to the movements of
a predetermined index.
Agent/sales associate: A person licensed by the state to sell real
estate through a real estate broker.
Assumable loan: An existing mortgage that can be taken over by the
buyer -- usually on the same terms given to the original buyer.
Balloon payment: A loan with monthly payments too low to pay off
the balance in the specified term. The balance must be paid in full when
the loan comes due -- typically within three to five years.
Broker: A person who has a real estate broker's license, who may
not only make real estate transactions for others in exchange for a fee
(or other consideration), but also may operate a real estate business and
employ sales associates and other brokers.
Closing or settlement: The meeting between seller and buyer when
the property legally changes hands.
Closing costs: Expenses above the purchase price that buyers and
sellers pay at closing.
Deed: The legal document that is used to transfer the title from
one owner to another.
Earnest money: Money deposited by potential buyers to show their
seriousness about buying.
Equity: The money you are left with after selling your home and
paying off the mortgage, selling costs and any other liens.
Fixed-rate mortgage: A loan with an interest rate and monthly payments
that do not vary.
Lien: A monetary claim against your property. Usually liens must
be settled before the seller can take the title.
Loan application fee: A lender's fee that you must pay when applying
for a mortgage.
Loan origination fee: A fee, usually one to four points, charged
by the lender for processing your mortgage.
Multiple Listing Service (MLS): A networking system, frequently
on computer, in which a number of real estate firms share information about
their clients' houses that are for sale in the area.
Points:
Fees charged by lenders.
One point equals one percent of the mortgage amount.
Title: Evidence of ownership in real estate.
Title insurance: Insurance, usually paid through a single premium
at closing, that insures the owner against loss because of a claim against
the title that was not found in the title search.
Title search: The process of checking all the records relating to
the title to see that it doesn't have any liens or claims against it that
would keep it from being transferred.
