As a 1st Time Home Buyer, it could be really easy to get overwhelmed by all the terminology that realtors and mortgage brokers use. In many cases, you probably never heard of APR, Interest rates or appraised value.
So to help you feel more comfortable when talking to an agent or your bank representative, I have listed below the most common used terms when buying a home, applying for a loan or scheduling your first showing appointment.
Terms that starts with the letter “A”:
Accelerated cost recovery system
A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.
A bookkeeping method that depreciates property faster in the early years of ownership.
A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.
The seller’s written approval of a buyer’s offer.
Any means by which a person can enter a property.
The degree to which a building or site allows access to people with disabilities.
The gradual addition to the shore or bank of a waterway by deposits of sand or silt.
A written declaration affirming that a person acted voluntarily.
A measurement of land equal to 43,560 square feet.
The volume of material needed to cover an acre of land one foot deep.
Active solar system
A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.
The number of years a structure has been standing.
The interest a borrower pays on the principal for the duration of the loan.
An addition or change to a contract.
Additional principal payment
Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.
Adjustable-rate mortgage (ARM)
A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.
Adjusted cost basis
The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.
The amount of time between interest rate adjustments in an adjustable-rate mortgage.
A person given authority to manage and distribute the estate of someone who died without leaving a will.
A legal document that an administrator of an estate uses to transfer property.
The acquisition of title to property through possession without the owner’s consent for a certain period of time.
The access and use of property without the owner’s consent.
Soil that is composed of materials deposited by the wind.
A person who makes a sworn statement.
A substitution for an oath granted to people based on religious reasons.
The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract.
The process by which a lender uses a title company or other firm as an agent to complete a loan.
A person licensed by the state to conduct real estate transactions.
A compromise boundary to which property owners agree in order to resolve a dispute.
Agreement of sale
A document the buyer initiates and the seller approves that details the price and terms of the transaction.
A recessed section of a room, such as a breakfast nook.
A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.
Mineral salt found in soil.
Soil that contains a higher concentration of mineral salt than natural acid.
A lane behind a row of buildings or between two rows of buildings.
Budgets offered by builders of new homes for the purchase of carpeting and fixtures.
Any home loan that does not conform to a standard fixed-rate mortgage.
A metal covering that provides an alternative to paint for owners of wood homes.
Wooden windows with aluminum covering the exterior.
Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments.
American Society of Home Inspectors
The American Society of Home Inspectors is a professional association of independent home inspectors. Phone: (800) 743-2744.
Americans with Disabilities Act
A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.
The process of paying the principal and interest on a loan through regularly scheduled installments.
Mathematical tables that lenders use to calculate a borrower’s monthly payment.
The strength of an electrical current.
A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.
Something that happens once a year.
Annual Percentage Rate (APR)
The cost of the loan expressed as a yearly rate on the balance of the loan.
Annual mortgagor statement
A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest.
The payment of a fixed sum to an investor at regular intervals.
A communication that informs a party that the obligations of the original contract will not be fulfilled.
A document that details a potential borrower’s income, debt and other obligations to determine credit worthiness.
The fee that a lender charges to process a loan application.
An opinion of the value of a property at a given point in time.
The fee that an appraiser charges to estimate the market value of the property.
A detailed written report on the value of a property based on recent sales of comparable sites in the area.
An opinion of the current market value of a property.
An increase in the value of a home or other property.
A method of resolving a dispute in which a third party renders a decision.
An area shaded by trees, shrubs or vines on a latticework structure.
A curved structure that supports weight over an area, such as a doorway.
A licensed professional who designs homes, buildings and other structures.
The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget.
The purchase or sale of a property in its existing condition.
A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard.
A seller’s initial price for a property.
A tax assessor’s determination of the value of a home in order to calculate a tax base.
The estimated value of a piece of real estate or a levy placed on property in addition to taxes.
Items of value, which include cash, real estate, securities and investments.
A person who transfers rights and interests of a property.
A mortgage that can be transferred to another borrower.
A provision that allows a buyer to take responsibility for the mortgage from a seller.
A fee the lender charges to process new records for a buyer who assumes an existing loan.
The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes.
We have a lot to cover, so hang in there. “B” is coming soon.