|Top 20 Terms|
The process of paying the principal and interest on a loan through regularly scheduled installments. Initially, most of each payment is applied toward interest owed, and later in the loan term increasingly applied toward principal.
An opinion of the value of a property at a given point in time.
The final procedure in which documents are signed and recorded and the property is transferred.
comparative market analysis
An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.
A detailed account of an individual’s credit, employment, and residence history. A lender uses this report to determine a loan applicant’s creditworthiness.The three largest credit bureaus are Trans Union Corp., Equifax, and Experian (formerly TRW).
A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.
A neutral third party holds documents and money for a real estate transaction and ensures that all conditions of a sale are met. Also refers to a special account that a lender uses to hold a borrower’s monthly payments on property taxes and insurance.
An examination of a home’s construction, condition, and internal systems by an inspector or contractor prior to purchase.
This insurance includes hazard coverage for any damages that may affect the value of a house, in addition to personal liability and theft coverage.
The fee, expressed as a percentage, charged for a loan. The interest rate also helps determine the monthly payment. For adjustable-rate loans, the interest rate may change from its initial level.
In casual use, a sum of money borrowed to purchase a home at a certain interest rate using the property as collateral. In formal use, a mortgage is the legal document that pledges property as collateral for a loan.
multiple listing service (MLS)
A service that combines listings of all available homes in an area into one directory or database, with the exception of For Sale By Owner (FSBO) properties.
An amount equal to 1 percent of the loan amount. Points may be paid by the borrower at the time the loan is made to get a lower interest rate. Lenders offer various rate/point combinations.
A lender’s preliminary assessment of a buyer’s ability to pay for a home, and an estimate of how much the buyer may borrow.
Tax paid on privately owned property. Property taxes are usually paid semiannually, or monthly if the lender requires. The amount is based on local tax rates and assessed property value.
A document that details the purchase price and conditions of the transaction.
The process of replacing an older mortgage with a new mortgage that has better terms.
The legal document conferring ownership of a piece of real estate.