Real estate terms buyers and sellers need to know
When buyers and sellers enter into a contract to buy or sell a property they are assaulted with many phrases and terms which are undecipherable to them. I give buyers and sellers a short list of terms they may see in contracts and escrow documents. I tell them to ask me if they come upon a term they don’t understand. I know what the terms are and will be happy to explain them and their significance during a transaction. This is part III of definition of terms, here is the link to part I and part II.
Loan to Value Ratio: The relationship between the amount of the appraised value of the property and the loan, expressed as a percentage of the appraised value.
Mortgage: The instrument by which real property is pledged as security for repayment of a loan.
Origination Fee: A fee made by a lender for making a real estate loan. Usually a percentage of the amount loaned such as one percent.
PITI (Principal, Interest, Taxes and Insurance): The four major components of a usually monthly mortgage payment.
Private Mortgage Insurance (PMI): Insurance written by a private mortgage insurance company protecting the mortgage lender against loss occasioned by a mortgage default and foreclosure. The premium is paid by the borrower and is included in the mortgage payment. Usually required if the down payment is less than 20% of the purchase price.
Reconveyance: The conveyance to the landowner of the title, held by a trustee under a deed of trust, when the performance of the debt is satisfied, in other words when the owner of the property pays the last mortgage payments.
Uniform Settlement Statement: The Standard HUD-1 form required to be given to the borrower, lender and seller at, or prior to, the settlement.
Vesting: Is the manner in which title is held. Common vestings are Community Property, Joint Tenancy, Tenancy in Common and Community Property with Right of Survivorship.
A special thanks to Sherry Mar of Placer Title Company for her assistance.
If you are a buyer looking to buy a home or a seller who wants to sell your home in Alameda I can clearly explain all of the elements of a transaction including all the real estate jargon. I have lived in Alameda for nearly 40 years. I know the market and steps you need to take to buy or sell a home in Alameda. Call or text me at 510-504-5612 for my free booklets detailing all the steps necessary to buy or sell a home in Alameda. Visit my website and my Facebook page Living in Alameda.
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