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Real Estate Terms

Horizontales
Market conditions that exist when buyers outnumber homes for sale. Bidding wars are common. Prices are often higher than average.
The components of a monthly mortgage payment.
Insurance that protects the buyer and lender should an individual or entity step forward with a claim that was attached to the property before the seller transferred legal ownership of the property or “title” to the buyer.
This is a statement a borrower will receive from their lender at least three days before closing on a home. The line items should look similar to what a borrower sees on their loan estimate when first applying — there are limits to how much any fees can change in the time period between application and closing day, so borrowers should review their closing disclosure closely and ask their lender about any changes.
Conditions written into a home purchase contract that protect the buyer should issues arise with financing, the home inspection, etc.
A security deposit made by the buyer to assure the seller of his or her intent to purchase.
A percentage of the home’s value owned by the homeowner.
A ratio that compares a home buyer’s expenses to gross income.
A thorough assessment of a borrower’s income, assets and other data to determine a loan amount they would qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.
A process a lender follows to assess a home loan applicant’s income, assets and credit, and the risk involved in offering the applicant a mortgage.
Verticales
A home loan not guaranteed by a government agency, such as the FHA or the VA.
A basic assessment of income, assets and credit score to determine what, if any, loan programs a borrower might qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.
Or comparable sales, are homes in a given area that have sold within the past several months that a real estate agent uses to determine a home’s value.
An account required by a lender and funded by a buyer’s mortgage payment to pay the buyer’s homeowners insurance and property taxes. A portion of your monthly payment goes into the escrow account to cover taxes and insurance. If your mortgage doesn’t have an escrow account, you may pay the property-related expenses directly.
Prepaid interest owed at closing, with one point representing 1% of the loan. Paying points, which are tax deductible, will lower the monthly mortgage payment.
A buyer’s final inspection of a home before closing.
Market conditions that exist when homes for sale outnumber buyers. Homes can sit on the market for a long time, and prices tend to drop.
Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 2% to 5% of the home’s purchase price. Read more about closing costs here.
A deed is the legal document that establishes ownership of real property, and is also used to transfer the ownership of real property to another person or entity.
The amount of the loan divided by the price of the house. Lenders reward lower LTV ratios.
A fee charged to borrowers who make a down payment that is less than 20% of the home’s value. The fee, 0.3% to 1.5% of the yearly loan amount, can be canceled in certain circumstances when the borrower reaches 20% equity.
A government agency created by the National Housing Act of 1934 that insures loans made by private lenders.