20 Real Estate Terms Defined

When getting into real estate, you will find there is a learning curve and beyond that a language barrier. While we are both speaking English or any other language, I am more referring to the jargon that you will see and discuss as your work through the buying process of a property. Here are some of the top terms and their definitions.

Adjustable Rate Mortgage – this is a mortgage that will change its rates based upon the market
Amortization – is when you are combining the interest and principal into payments versus paying interest first
Appraisal – a 3^rd party report that highlights the value of the property
Assessed Value – the value of the property from a tax perspective
Association Fee – additional monthly costs that are attached to some condos and townhomes
Closing Disclosure – this will itemize all of the costs and fees associated with the sale
Closing Costs – the additional costs and fees in addition to the final price
Collateral – what is held to ensure that you pay a loan back
Comparative Market Analysis – a report on similar homes in the area that can give an understanding of the value of your property
Contingencies – conditions that must be met by a certain date for the contract to be valid
Dual Agency – an agent that works for the buyer and seller
Equity – is what you own and as you pay into the principal you gain equity
Escrow – an account that is set up to receive payments
Fixed Rate Mortgage – a mortgage where the interest is the same throughout the loan
Principal – the amount of money borrowed through a loan
Refinancing – when you restructure your loan with lower rates and/or different payment plans
REO – real estate owned by the bank or lender that offered the original loan to the buyer
Short sale – a property that is offered lower than is currently owed
Title – a document that states who is the owner of the property and will also include the history of owners
Underwriting – the process that banks vet out buyers for their ability to pay back the loan