This is a reblog, Jerry Newman put together this great list of terms for first time home buyers to know. The only thing I might add if I were writing this is my "nickname" for Earnest Money - I call it "Put your money where your mouth is" money. I'm sure we've all heard the saying, "Money talks, ******** walks".
Terms for First Time Home Buyers to Know
I have had the honor and pleasure of working with First Time Home Buyers in my market area. During our first initial Buyer’s Consultation, I usually go over many terms with my clients, and discuss the whole process when buying a home from contact to close. I have included a list of terms for my new clients to prepare them on their road to home ownership.
Earnest Money : Down payment made by purchaser of real property as evidence of good faith. Not to be confused with the down payment required for the different types of loans.
Mortgage: the instrument by which real property is pledged as security for repayment of a loan. In other words, this is your monthly payment which usually includes PITI(Principal, Interest, Taxes, and Insurance all combined). Most lenders have it setup this way to insure everything is paid on time.
Appraisal: a estimate of the value of the property resulting from an analysis of facts about the property. Subject property is usually compared to similar properties in the same area.
Closing Costs: costs the buyer must pay at the time of closing in addition to the down payment on the loan, which may include points, loan origination fees, lender fees, title charges, credit report fees, document preparations fees, mortgage insurance premiums, survey fees, appraisals, prepayments for property taxes, deed recording fees, and homeowners insurance coverage. This cost varies and is usually given to the buyers as a “Good Faith Estimate” during that initial loan application visit with the lender.
Amendment: a modification to an existing contract, mutually agreed upon by all the parties to the contract.
Cloud on Title: a claim or encumbrance that impairs the title to real property. All judgments, liens, or any cloud on the title is usually cleared before when a Title Policy is issued.
Comparable Sales: sales with similar characteristics to the subject property, used for analysis in the appraisal process. They are commonly called “ comps”.
Deed: a written instrument by which title to land is conveyed.
Deed Restrictions: limitations in the deed to a property that dictate certain uses that may or may not be made of the property.
Easement: A right to use another person’s real estate for a specific purpose. The most common type of easement is the right to travel over another person’s land, known as a right of way. In addition, property owners commonly grant easements for the placement of utility poles or boxes, utility trenches, water lines or sewer lines.
Hazard Insurance: Real estate insurance protecting against fire, some natural causes, vandalism, etc. depending upon the policy coverage. MOLD coverage has been limited in the state of Texas on these policies.
Legal Description: a description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire piece of land.
Lien: a monetary claim against a property.
Recording: filing documents affecting real property with the County Court Recorder as a matter of public record.
Power of Attorney: A written authorization by a person to another person to act for him on his behalf. Often used by our military members while their spouses are away from home.
REALTOR® : a real estate broker of an associate who holds an active membership in a local real estate board that is affiliated with the NATIONAL ASSOCIATION OF REALTORS®.
Contact your Local REALTOR® in San Antonio, TX for any information on how you may purchase your First Home, a Move-Up Home, or that second vacation Home. Not ready yet, please feel free to visit my website at San Antonio Real Estate to search the local area for homes or just to get more information.
(Information on terms was supplied by Independence Title Company)