The next chapter in my continuing series of real estate terms, focus's on I's through L's.
Remember, it's not that important to memorize the definitions as now you will have a point of reference to find these and other terms and definitions as you need.
These are by no means all the terms used, just a few notable ones.
So, let's continue shall we?
Real estate terms A To Z:
The I's
Initial interest rate
The original interest rate of the mortgage at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes known as "start rate" or "teaser."
Insurance
A contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy, and the periodic payment is known as an insurance premium.
Insured mortgage
A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.
Interest
The fee charged for borrowing money.
Interest rate
The rate of interest in effect for the monthly payment due.
Interest rate buydown plan
An arrangement wherein the property seller (or any other party) deposits money to an account so that it can be released each month to reduce the mortgagor's monthly payments during the early years of a mortgage. During the specified period, the mortgagor's effective interest rate is "bought down" below the actual interest rate.
Interest rate ceiling
For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.
Investment property
A property that is not occupied by the owner.
IRA (Individual Retirement Account)
A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund. Individuals can place IRA funds in bank accounts or in other forms of investment such as stocks, bonds or mutual funds.
The J's
Joint tenancy
A form of co-ownership that gives each tenant equal interest and equal rights in the property, including the right of survivorship.
Jumbo loan
A loan that exceeds Fannie Mae’s mortgage amount limits. Also called a nonconforming loan.
The K's
Nothing really for the K's ;)
The L's
Landlord
One who rents property to a tenant.
Lease
A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may possess the real estate for a specified period of time and rent.
Lease-purchase mortgage loan
An alternative financing option that allows low- and moderate-income home buyers to lease a home from a nonprofit organization with an option to buy. Each month's rent payment consists of principal, interest, taxes and insurance (PITI) payments on the first mortgage plus an extra amount that is earmarked for deposit to a savings account in which money for a downpayment will accumulate.
Lien
A legal claim against a property that must be paid off when the property is sold.
Line of credit
An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower. See home equity line of credit.
Listing
An employment contract between principal and agent that authorizes the agent (such as a broker) to perform services for the principal and his property.
Loan
A sum of borrowed money (principal) that is generally repaid with interest.
Loan origination
The process by which a mortgage lender brings into existence a mortgage secured by real property.
Lock-in
A written agreement in which the lender guarantees a specified interest rate if a mortgage goes to closing within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.
Lock-in period
The time period during which the lender has guaranteed an interest rate to a borrower. See lock-in
Stop by and read the next terms in this series or if you prefer, read them all at your leisure on my Panama City Realty Group website
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