Deed – Legal document that formally conveys title of a property..

Earnest Money – A sum deposited with the broker at the time an offer is presented to show that a potential purchaser is serious about buying.

Escrow – The handling of funds or documents by a third party on behalf of the buyer and/or seller.
Exclusive Agency Agreement – A contract that gives a real estate agency the right to market and sell a home.

FHA – The Federal Housing Administration. It insures loans made by an approved lender, as long as the loan is in accordance with its regulations.

Finance Charge – The cost of obtaining credit including points, interest and any additional fees.

Fixed–Rate Mortgage – A mortgage where the interest rate stays constant for the life of the loan.

Fixture – A object (such as a chandelier, kitchen cabinet, or light unit) that is permanently attached to property and stays with the property when it is sold, unless otherwise specified in the sale agreement.

Gross Income – A tax term meaning all income earned before expenses are deducted.

Hazard Insurance – Insurance that covers property damage caused by fire, wind, storms, and other similar risk

Home Equity Loan – A loan secured by the equity built up in a home.

In Contract – A condition when a buyer and a seller have agreed on the conditions for the sale of the home and have signed a Purchase Agreement.

Index – The interest rate or adjustment standard that determines the changes in monthly payments for an adjustable rate loan.


Joint Tenancy – Ownership of property by two or more people in which the survivors automatically gain ownership

Lien – A legal claim held against property until a debt is satisfied.

List Price – The price of the home as determined by the seller and their agent.

Listing Contract – Agreement where an owner contracts a real estate company to market and sale their property. The contracts a for a specified amount of time.

Market Value – The price that is established by present economic conditions.

Mortgage Broker – A broker who represents numerous lenders and helps consumers find affordable mortgages, the broker charges a fee only if the consumer finds a loan.

Mortgage Company – A company that assembles loans by borrowing from lenders, to lend to buyers to purchase a home.

Mortgage Lien – A legal claim against a mortgaged property that must be paid when the property is sold.

Mortgage Loan – A contract in which the borrower's property is pledged as collateral and repaid in installments.

Multiple Listing Service (MLS) – A database of properties listed for sale with detailed information.

Negative Amortization – An increase in the outstanding amount when a monthly payment does not cover the monthly interest due.

Non Conforming Loans do not follow FHA/VA conventional lending guidelines. They are tailored for specific financial situations.

Note – A formal document that shows the existence of a debt and includes the terms of repayment.

Origination Fee – A fee charged by a lender for processing a loan application (usually one percent of the loan amount).

Owner-assisted Loan – A loan in which the seller agrees to finance all or part of the purchase.

P.I.T.I – Principal, interest, taxes, and insurance -the components of monthly housing payments.

Point – Finance charges paid by the borrower at the beginning of a loan. One point is 1% of the loan amount.

Pre-Approval – A mortgage approval before writing a contract on a property. .

Prepayment – Payment of a debt prior to maturity.

Pre–Qualification – an estimate of how much financing you *might be* eligible for.

Principal – The amount borrowed, or the part of the amount borrowed which remains unpaid.

Prepayment Penalty – A fee for paying off a mortgage loan prior to maturity.

Property Survey – A survey to determine a properties boundaries.

Property Tax – A local tax assessed on property. This tax is based on the homes estimated value.

Purchase Agreement /Sales Agreement. A contract for the purchase and sale of real estate between a buyer and seller that spell out the terms and conditions of the sale.

R-Value – the efficiency of insulation. The higher the number, the greater the insulating value.

Realized Amount – The amount received for the sale of a home, less selling expenses.

Realtor® – Real estate licensees who are members of the National Association of Realtors® are properly called Realtors®.

Recording Fee – Fees charged for recording the transfer of property.

Real Estate Settlement Procedures Act (RESPA) – RESPA a federal law that requires that consumers receive disclosures at various times in the transaction and outlaws kickbacks that increase the cost of settlement services.

Purchase Agreement - A contract between a home buyer and a seller that details the price, and terms and conditions of the transaction.

Second Mortgage – A loan against the a homes equity.

Secondary Mortgage Market – The selling and buying of existing mortgages.

Settlement  Statement - Forms provided at closing that itemize the payout in a real estate transaction.

Title – Evidence that a person's legal ownership of a property.

Title Insurance – Insures the holder against loses caused by a defect in the title.

Transfer Taxes – Taxes charged on the transfer of property or on real estate loans.

VA – Veterans Administration. A government agency that guarantees mortgage loans for eligible veterans.

Walk–Through – A final inspection of a home generally just prior to settlement to check too see if any problem exist that need to be corrected.

Zoning – Regulations established by local governments that control the use of land within a certain jurisdiction.

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