Real estate jargon on documents and websites got you stumped? Want to sound like a pro when buying or selling your home? Here are some terms and concepts to arm yourself with when buying or selling a property.
• Adjustable Rate Mortgage Loan (ARM)– A residential mortgage whose interest rate is subject to change. Adjustment details are agreed upon when the loan is given.
• Assumable mortgage– A mortgage which allows a new owner to assume its obligations.
• Balloon mortgage– a mortgage that is reduced or extinguished over a specific period of years, but requires a lump sum payment in full at an earlier date.
• Closing costs– Expenses for services incidental to a sale of real estate, such as sales commissions, loan fees, title fees, appraisal fees, etc.
• Deed of Trust– An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower in favor of the lender, and reconveyed upon payment in full.
• Due On Sale Clause– Provision in a mortgage or deed of trust, which requires the loan to be paid in full if the property is sold or transferred.
• Easement– An interest in land owned by another that entitles its holder to a specific limited use, such as putting up power lines, or crossing the property.
• Escheat– A reversion of property to the state in those cases where an individual dies without heirs (or, in some states, without a will).
• Extended mortgage– A mortgage in which the due date is extended, usually at a higher rage of interest than the original.
• Forfeiture of Title– Provision in a deed creating a condition which will cause the title to be passed to another should certain circumstances occur.
• Graduated Payment Mortgage– A loan in which monthly payments are small in the beginning, then gradually increase over time.
• Home repair loan– A loan used for repairs and additions to existing structures that doesn’t affect the existing mortgage; typically ten years or less in length.
• Insurance loan– When the cash value of a life insurance policy is borrowed by the insured.
• Lien– a hold, claim, or charge allowed a creditor upon the lands of a debtor.
• Mortgage-backed security– A security evidencing either the ownership of an interest in a mortgage loan or pools of mortgage loans, or a separate obligation secured by a mortgage loan or pool of mortgage loans.
• Mortgage insurance– Insurance protecting against the nonpayment of, or default on, an individual mortgage or loan involved in a residential mortgage transaction. It protects the mortgage lender against loss incurred by nonpayment or default.
• Variable rate mortgage– A loan in which the interest rate fluctuates with the cost of funds or some other index.
For more information or specific real estate question, please reach out to one of our experts at 352.351.4718. Our commitment is to help you every step of the way.