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[et_pb_section bb_built=”1″ admin_label=”section” fullwidth=”on” background_color=”#ffffff” parallax_method=”off” custom_padding_tablet=”0px|0px|0px|0px” custom_padding_last_edited=”on|tablet” _builder_version=”3.0.96″ next_background_color=”#f3f3f3″][et_pb_fullwidth_slider show_arrows=”off” show_pagination=”off” parallax=”on” background_position=”top_left” custom_padding=”29%|||” custom_padding_tablet=”33%|||” custom_padding_phone=”50%|||” box_shadow_color=”rgba(0,0,0,0.1)” _builder_version=”3.15″ box_shadow_blur=”10px”][et_pb_slide heading=”Glossary” button_link=”#” background_image=”https:\/\/localwebdesigncompany.com\/centraltitle\/wp-content\/uploads\/sites\/24\/2018\/12\/depositphotos_169103392-stock-photo-composition-with-open-book-on.jpg” background_position=”top_left” background_size=”cover” background_color=”#ffffff” use_bg_overlay=”off” use_text_overlay=”on” text_overlay_color=”rgba(11,40,60,0.8)” alignment=”center” background_layout=”dark” allow_player_pause=”off” text_border_radius=”3″ header_font_select=”default” header_font=”|on|||” header_font_size=”45″ header_font_size_tablet=”45″ header_font_size_phone=”27″ header_font_size_last_edited=”on|tablet” body_font_select=”default” body_font=”||||” custom_button=”off” button_font_select=”default” button_font=”||||” button_use_icon=”on” button_on_hover=”on” _builder_version=”3.15″ use_background_color_gradient=”off” background_color_gradient_start=”#2b87da” background_color_gradient_end=”#29c4a9″ background_color_gradient_type=”linear” background_color_gradient_direction=”180deg” background_color_gradient_direction_radial=”center” background_color_gradient_start_position=”0%” background_color_gradient_end_position=”100%” background_color_gradient_overlays_image=”off” parallax=”off” parallax_method=”on” background_repeat=”no-repeat” background_blend=”normal” background_video_pause_outside_viewport=”on” child_filter_hue_rotate=”0deg” child_filter_saturate=”100%” child_filter_brightness=”100%” child_filter_contrast=”100%” child_filter_invert=”0%” child_filter_sepia=”0%” child_filter_opacity=”100%” child_filter_blur=”0px” child_mix_blend_mode=”normal” button_bg_use_color_gradient=”off” button_bg_color_gradient_overlays_image=”off” text_shadow_horizontal_length=”0em” text_shadow_vertical_length=”0em” text_shadow_blur_strength=”0em” header_text_shadow_horizontal_length=”0em” header_text_shadow_vertical_length=”0em” header_text_shadow_blur_strength=”0em” body_text_shadow_horizontal_length=”0em” body_text_shadow_vertical_length=”0em” body_text_shadow_blur_strength=”0em” button_text_shadow_horizontal_length=”0em” button_text_shadow_vertical_length=”0em” button_text_shadow_blur_strength=”0em” text_shadow_style=”none” header_text_shadow_style=”none” body_text_shadow_style=”none” button_text_shadow_style=”none” box_shadow_style_button=”none” \/][\/et_pb_fullwidth_slider][\/et_pb_section][et_pb_section bb_built=”1″ fullwidth=”off” specialty=”on” _builder_version=”3.0.96″ background_color=”#f3f3f3″ prev_background_color=”#ffffff” next_background_color=”#ffffff”][et_pb_column type=”2_3″ specialty_columns=”2″][et_pb_row_inner admin_label=”Row”][et_pb_column_inner type=”4_4″ saved_specialty_column_type=”2_3″][et_pb_text _builder_version=”3.15″]<\/p>\n

Adjustable Rate Mortgage (ARM): <\/strong>Interest rates on this type of mortgage are periodically adjusted up or down, depending on a specified financial index.<\/p>\n

Aggregate Escrow Accounting:<\/strong>\u00a0A required method of accounting for and reconciling the borrower’s escrow account. Limits the amount of excess or “cushion” the Lender May retain or require in an escrow account.<\/p>\n

Amortization:<\/strong>\u00a0A method of equalizing the monthly mortgage payments over the life of the loan, even though the proportion of principal to interest changes over time. In the early part of the loan, principal repayment is very small and interest repayment very high; at the end of the loan, that relationship is reversed.<\/p>\n

Annual Percentage Rate:<\/strong>\u00a0The actual finance charge for a loan, expressed as a percentage, including any points and loan fees paid by the borrower in addition to the stated interest rate.<\/p>\n

Appraisal:<\/strong>\u00a0An expert judgment of the value or worth of a property. Completed by a licensed appraiser and required by the Lender as a condition of loan approval. Usually ordered by the Lender.<\/p>\n

Assumption of Mortgage:<\/strong>\u00a0Buyer assumes liability for an existing mortgage note held by the Seller. This is subject to approval by the Lender, who must be willing to approve the Buyer and release the Seller from liability on the loan.<\/p>\n

Balloon Payment:<\/strong>\u00a0A large principal payment due all at once at the end of some loans.<\/p>\n

Cap:<\/strong>\u00a0Limit on how much the interest rate change change in an adjustable rate mortgage.<\/p>\n

Closing:<\/strong>\u00a0See “Settlement”<\/p>\n

Condominium (Condo):<\/strong>\u00a0Type of real estate ownership where the owner has title to a specific unit and shared interest in common areas.<\/p>\n

Contingency:<\/strong>\u00a0A condition in a contract that must be satisfied or removed for the contract to be binding.<\/p>\n

Conversion Clause:<\/strong>\u00a0A provision that allows an adjustable rate mortgage (ARM) to be changed to a fixed-rate loan after a specified interval and after all required conditions are met.<\/p>\n

Deed:<\/strong>\u00a0Legal document that formally conveys ownership of property from the Seller to Buyer.<\/p>\n

Deed of Trust:<\/strong>\u00a0Legal document that formally conveys ownership of property from the Buyer to a Trustee for the purpose of securing the Lender’s claim on the property pending repayment of the loan.<\/p>\n

Down Payment:<\/strong>\u00a0Percentage of the purchase price that the Buyer must pay down and may not be borrowed from the lender<\/p>\n

Earnest Money:<\/strong>\u00a0Deposit paid by Buyer when the sales contract is ratified by all parties.<\/p>\n

Equity:<\/strong>\u00a0The value of the property actually owned by the homeowner; purchase price plus appreciation, plus improvements, less mortgages and liens.<\/p>\n

Escrow:<\/strong>\u00a0A fund or account held by a third-party custodian until conditions of a contract are met.<\/p>\n

Fannie Mae (FNMA, Federal National Mortgage Association):<\/strong>\u00a0Privately owned corporation created by Congress that buys mortgage notes from local lenders and is responsible for the guidelines a majority of lenders use to qualify borrowers.<\/p>\n

Finance Charge:<\/strong>\u00a0The total cost, including all fees, points and interest payments a borrower pays to obtain credit.<\/p>\n

Fixed Rate Mortgage:<\/strong>\u00a0Interest rates on this type of mortgage remain the same over the life of the loan term.<\/p>\n

Fixture:<\/strong>\u00a0A recognizable object (such as a toilet bowl, kitchen cabinet, or lighting unit) that is permanently attached to property and thus belongs to the property when it is sold.<\/p>\n

First Payment Letter:<\/strong>\u00a0This is a statement showing the amount of monthly and principal payment due on the loan along with taxes and insurance.<\/p>\n

Freddie Mac (FHLMC, Federal Home Loan Mortgage Corporation):<\/strong>\u00a0Privately owned corporation created by Congress that buys mortgage notes from local lenders and is responsible for the guidelines a majority of lenders use to qualify borrowers.<\/p>\n

HUD1:<\/strong>\u00a0The HUD1 is a detailed list of charges and credits including Lender Charges, Escrows, Settlement Fees, Governmental Charges, Additional Charges, Gross Amount Due, Credits to Purchasers, Seller’s Payoffs.<\/p>\n

Hazard Insurance:<\/strong>\u00a0Compensates for property damage from specified hazards such as fire and wind. Insurance must be obtained prior to settlement by the Buyer and provided to the Lender.<\/p>\n

Lead-Based Paint and Lead-Based Paint Hazards:<\/strong>\u00a0Houses and apartments built before 1978 may have paint that contains lead (called lead-based paint). Lead from paint, chips and dust can pose serious health hazards to children and\/or women of child bearing age, if not taken care of properly.<\/p>\n

Lien:<\/strong>\u00a0A secured claim on property until a debt is satisfied.<\/p>\n

Listing Contract:<\/strong>\u00a0Agreement whereby an owner engages a real estate agent for a specified period to sell property, for which sale the agent receives a commission.<\/p>\n

Loan Application:<\/strong>\u00a0You may be asked to sign a typed COPY of the loan application to document that there have been no material changes in your employment, marital or financial status. This form is a cleaned-up version of the form you or your loan officer filled out when you first applied for your loan.<\/p>\n

Loan Approval Letter:<\/strong>\u00a0Letter from the lender telling you that your loan has been approved on certain terms. You may receive this prior to or at settlement. The letter will include the loan amount, interest rate, number of years of the loan, and any additional requirements that must be complied with prior to or at settlement<\/p>\n

Market Price:<\/strong>\u00a0The actual price at which a property is sold.<\/p>\n

Market Value:<\/strong>\u00a0The price that is established by present economic conditions, locations and general trends.<\/p>\n

Mortgage:<\/strong>\u00a0A security claim by a Lender against property until the debt is paid.<\/p>\n

Negative Amortization:<\/strong>\u00a0Type of loan product where by monthly payments aren’t enough to cover interest costs, the additional amounts of interest due are added to the principal balance. Borrowers have the potential of a higher principal balance over time.<\/p>\n

Origination Fee:<\/strong>\u00a0Application fee(s) for processing a proposed mortgage loan, usually a percentage of the loan principal.<\/p>\n

PITI:<\/strong>\u00a0Principal, interest, taxes and insurance; forming the basis for monthly mortgage payments.<\/p>\n

Point:<\/strong>\u00a0A percentage of the loan principal. Charged in addition to interest and fees. Typically paid up front to guarantee a specified interest rate.<\/p>\n

Power of Attorney:\u00a0<\/strong>A written authorization to represent or act on another’s behalf.<\/p>\n

Prepayment Penalty:<\/strong>\u00a0A fee paid by a borrower who pays off the loan before it is due according to the terms of the loan.<\/p>\n

Prequalification:<\/strong>\u00a0Informal estimate by a lender of how much financing a potential borrower might expect to obtain.<\/p>\n

Principal:<\/strong>\u00a0One of the parties to a contract; or the amount of money borrowed for which interest is charged.<\/p>\n

Prorate:<\/strong>\u00a0Divide or assess proportionately<\/p>\n

Promissory Note:<\/strong>\u00a0a written promise to pay a specified sum of money to a designated person or to his or her order, or to the bearer of the note, at a fixed time or on demand.<\/p>\n

Radon Gas:<\/strong>\u00a0A naturally occurring emission of gas from the ground. Studies have shown that extended exposure to high levels of radon gas can adversely affect human health.<\/p>\n

Survey:<\/strong>\u00a0Drawing showing the location of improvements (structures) within the boundaries of the property. A survey is not necessary if you are buying a condominium.<\/p>\n

Settlement:<\/strong>\u00a0Culmination of legal and financial transaction required to make the contract terms finalized and transfer title of property to Buyer.<\/p>\n

Termite Inspection:<\/strong>\u00a0The purchaser or seller provides a report, from a licensed exterminator, indicating any evidence of infestation. The seller is responsible for any required extermination and repairs. A copy of the inspection report will be given to you at or before settlement.<\/p>\n

Truth in Lending (TIL):<\/strong>\u00a0Form disclosing to the borrower an estimate of the annual cost of the loan and the total cost over the life of the loan.<\/p>\n

Time is of the Essence:<\/strong>\u00a0A legal concept that when applied makes a time frame absolute. Violation of a stated time frame under this theory is a breach of the contract term.<\/p>\n

Title:<\/strong>\u00a0Document that indicated ownership of a specific property, i.e. a deed for real property.<\/p>\n

Title Insurance:<\/strong>\u00a0Protects against loss from legal defects in the title.<\/p>\n

Title Search:<\/strong>\u00a0Detailed examination of the land records for a customarily prescribed period of time during the history of a property.<\/p>\n

Types of Ownership:<\/strong>\u00a0There are four types of ownership for real property:<\/p>\n