Real Estate Terms You Should Know

Here are some common terms you will hear when buying or selling your home

• Adjustment Date – the pre-determined date the interest rate changes if you have an adjustable rate mortgage

• Amortization – a portion of your monthly loan is applied to your accruing interest every month and the remainder is applied to your principal.  Over time, the interest decreases and the amount applied to your principal increases and your loan is paid off within a specified amount of time.  This is called amortization

• Appraisal – is a justification of the price paid for your home based on the analysis of the comparable sales of similar homes in your area

• Assessment – the value that is placed on your home for taxation purposes

• Assignment – this is when the ownership of your mortgage is transferred from one mortgage company to another

• Chain Of Title – this is the analysis of the different transfers of tile for a property over the years

• Clear Title – this is a title that does not have any liens or legal issues as to who owns the property

• Contingency – this is a condition that must be met before a contract can become legally binding

• Conventional Mortgage – these are home loans that are not government loans such as VA and FHA

• Deed – this is the legal document that gives you the title to your house

• Earnest Money Deposit – the deposit made by a potential buyer to show that they are serious about buying a particular house

• Escrow – money or documents that are deposited with a third party to hold and will be delivered upon the fulfillment of a specific contract condition – such as a closing

• FHA Mortgage – a mortgage that is insured by the Federal Housing Administration, also known as a government loan