Addendum: a form that explains a change or an addition to a purchase agreement
Affidavit: a statement that is to be signed by a buyer or seller to indicate the information provided is true
Appraisal: a document that includes an estimate of the fair market value of a property
Appraisal Fee: the cost that an appraiser charges in order to provide an estimate of a property’s market value
Appreciation: an increase in the value of a property
Balloon Loan: a loan with monthly payments and a leftover balance due in a lump sum payment at the end
Blanket Mortgage: one mortgage for more than one real estate property
Closing: the last portions of the process to transfer a property’s ownership; it is also considered a settlement
Closing Date: the date for the property to officially be exchanged
Credit: an agreement that is to ensure the borrower will borrow money from a lender and then repay that money to a lender over time
Creditor: the lender who supplies a buyer with the loan or with credit
Deed: the document that indicates the transfer of a property’s ownership
Default: a lack of ability to pay the mortgage payments that were agreed to
Depreciation: a decrease in the value of a property
Down Payment: the percentage of the total purchase price paid when an agreement of sale has been signed
Escrow: funds that a third party holds until certain parts of a contract are satisfied and funds can be paid
Fixed Expenses: fees that will stay the same from one month to the next month
Fixed-Rate Mortgage: a loan with a set interest rate and payment amount for the time period of the loan
Floor Plan: an architect’s diagram of a property’s rooms and the room sizes
Foreclosure: a process in which a property can be sold to handle the losses when an owner defaulted on a loan
Grace Period: a time period when a mortgage payment can be made without a borrower being considered in default
Holding Period: the time period in which a property is owned
Homeowner’s Insurance: the insurance that will protect a property from different hazards such as fires or storms
HVAC: the acronym for heating, ventilation, and air conditioning, which is a heating and cooling system for a home
Infrastructure: public services, such as highways and schools, that are needed to help residential development
Inquiry: a request for a credit report
Inspections: checking and analyzing a property to see if there are any defects
Interest Rate: the cost to borrow money from a lender
Listing Agent: an agent who is representing a seller
Mortgage: a legal document and term that indicates a loan; the property is officially pledged to a lender and is seen as security for the loan payment
Mortgagee: the person who is the lender in a mortgage agreement
Mortgagor: the person who is the borrower in a mortgage agreement
Open House: the time potential buyers of a property can visit a property that is for sale
Origination Fee: an expense that is paid to lender when he or she processes a loan application
PITI: a house payment including principal, interest, taxes, and insurance and made on a monthly basis
Pre-Qualification: the way to determine if a borrower can qualify for a loan and the amount of money he or she would be allowed to receive
Price-to-Income Ratio: an affordability measure for a property
Property Tax: a local tax applied for municipal services including schools and streets
Purchase Offer: a document that provides an offer to buy a property
Real Estate Agent: a licensed professional who assists in the selling of a property
Real Estate Broker: a licensed professional or company that connects a buyer and a seller in the purchase of real estate
Real Estate Salesperson: a licensed professional who has similar tasks compared to a real estate broker’s tasks, is connected to a broker, and is supervised by a broker
Refinance: receiving a new loan in order to pay off an existing loan
Sales Contract: a contract between the buyer and the seller that explains details such as guarantees and closing costs
Second Deposit: another deposit that is paid when the purchase and sale agreement is being signed
Shared Appreciation Mortgage: a loan that includes partners agreeing to share parts of a down payment, monthly payment, and appreciation
Title: the evidence that a person has the legal right to own a property
Transfer Taxes: Local taxes and state taxes applied when real estate has been transferred
Zoning: the regulations created by local governments regarding a property’s features and use in a certain location