The Durham Executive Group, John and Becky Durham provide the following glossary of home buying terms as a benefit to Hudson, WI home buyer's.
These are supplemental documents that are part of a purchase agreement.
Adjustable Rate Mortgage, ARM
A loan where the interest rate adjusts to current rates during the duration of the loan.
Annual Percentage Rate, APR
The cost of the loan, including the interest rate, points, origination fee and other charges.
When a city makes improvements to city property, homeowners must pay for these improvements through their city taxes.
Payments condominium and townhouse owners make for upkeep and management of shared property.
A loan where a buyer arranges to take over the seller's original loan.
An agent who works on behalf of the buyer and who has the buyer under contract.
The costs involved in the transfer of property.
A letter from the buyer's lender showing qualification of a loan and listing the terms.
An-addition to a purchase agreement stating that certain terms be met within a time frame for the agreement to remain valid.
Contract for Deed
An owner offering the buyer financing, and the buyer makes monthly installments to the owner.
Loans without government involvement.
A rating based on your credit history.
Failure of loan payment.
An up-front payment made on a home.
Money paid to the agent when an offer is made on a property. If the offer is approved, the money is counted toward payment of the property. If the offer is denied, the money is returned to the buyer.
The portion of the property that you own that is clear of any mortgage.
Money paid in addition to the monthly mortgage payment that is used toward paying property taxes and insurance.
Loans that are backed by the Federal Housing Administrative.
Fixed Rate Loans
A loan that has a constant rate for the duration of the terms.
Your income before taxes.
HUD - 1 Form
A settlement statement of all of the closing costs.
Insurance which homeowners purchase to protect their investment.
Property taxes paid by owners who actually live in the home.
Lender's charge for a loan.
Loan Origination Fees
Fees you pay your lender for handling and processing your loan application.
An analysis by a lender to determine your qualification for a loan.
An agreement by a lender to determine your qualification for a loan.
Debt you will owe on for more than six months.
Mortgage Discount Points
Prepaid interest on a loan.
Mortgage Insurance Premium, MIP
Insurance that a lender is required to charge for an FHA loan.
PITI-The Monthly Loan Payment
Principal, Interest, Taxes, and Insurance.
A penalty fee assigned for early payoff on a loan.
Highest grade of mortgage that you qualify for.
Total amount you are borrowing for a home.
Private Mortgage Insurance, PMI
If you make less than a 20% down payment on a conventional loan, you will be required to pay for this insurance.
Property Tax Adjustment
Reimbursement to the seller for taxes already paid for the year.
A legally binding agreement between the buyer and seller that lists the terms and conditions of the sale of the property.
Savings on the cost of homeowner's insurance for using the same company the previous owner used.
Has a higher interest rate than prime mortgage.
A seller's agent that owes their duties to the seller. A subagent may bring a potential buyer to a property.
Insurance that you pay to protect the lender from claims on the property title.
Truth-In-Housing Inspection Report
An inspection that the seller pays for that states the condition of the house.
Truth-In-Housing Disclosure Statement
A statement from your lender stating all fees and costs of a loan using the annual percentage rate.
Risk analysis conducted by a lender to decide whether to approve you for the loan.
Low-interest, no down payment loans offered to people who served in the U.S. Military and issued from the Veterans Administration.
*The above glossary of terms was provided by the National Association of Realtors.