Rheta Santangelo

Office: 215.641.2420
Cell: 215.913.5000
Fax: 215.525.3466
E-mail: rhetasantangelo@gmail.com

Nancy Bond

215.431.2261
E-mail: Nancy.Bond@foxroach.com

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Real Estate Terms

Real Estate Terms

ACCEPTANCE: Consent to an offer to enter into contract.

ADJUSTABLE RATE MORTGAGE (ARM): A mortgage in which the interest rate may change, up or down, according to a predetermined index.

AGENT/REALTOR: A Licensed person who represents the Seller and/or Buyer and who provides market assessment, offers sales or buying strategy, recommends various services and sources important to the Seller or Buyer, is a member of the National Association of Realtors (NAR) and subscribes to Nars strict Code of Ethics.

AMORTIZATION: A method which monthly mortgage payments are equalized over the life of the loan, despite the fact that the proportion of principle interest changes.

Amortized Loan: A loan that is paid off in equal installments during its term.

AOS: Agreement of Sale

APPRAISAL: A professional and unbiased written opinion of a propertys value, based on recent, comparable sales, quality of construction, current condition and style of architecture.

APPRECIATION: Increase in value to any cause.

ASKING PRICE: The price at which the property is on the market for.

ASSESSED VALUATION: An established value of a property by an agency of government for tax-assessment purposes ONLY. This MAY or MAY NOT reflect market value.

ASSUMABILITY Assumption of Mortgage: This permits you to transfer your mortgage to anyone who wants to buy your house, as long as that person meets the credit standards of the lender. The taking of title to a property by grantee, wherein he or she assumes liability for payment of an existing note, secured by a mortgage or deed of trust against the property.

BALLOON PAYMENT: The final payment of a mortgage loan when it is larger than the regular payment, it usually extinguishes the debt.

BROKER: A person licensed to represent home Buyers/Sellers for a contracted fee. Brokers manage Real Estate offices and employ licensed agents to sell properties.

BUY DOWN: Cash payments made at closing that allows the borrower to take advantage of lower interest rates for a specific period.

CLOSING: The final settlement at which time the title is transferred from Seller to Buyer, accounts are settled, new mortgages are signed and all fees and expenses are dispersed or satisfied.

CLOSING COSTS: The expenses over and above the price of the house that need to be paid before the title is transferred. This may include the cost of the title examination, premiums for title policies, attorney fee, lenders service fee and recording charges. (fees, taxes, charges, commissions, surveys, lender fees, inspection fees, etc.)

COMMISION: A previously agreed upon percentage of the homes sale price that is paid to the listing & selling agents.

CONVENTIONAL MORTGAGE: Most popular home financing form not insured by the FHA (Federal Housing Administration) nor guaranteed by the VA (Veterans Affairs). Available from many lenders at carrying rates, terms and conditions.

CONTINGENCY: A condition that must be satisfied before contract is binding.

COUNTER OFFER: An offer made by a Buyer/Seller to the other party, responding to the asking price or subsequent adjustment to that price to complete a purchase of sale.

DEED: A written legal instrument that conveys title to real estate property from Seller to Buyer.

DOWN PAYMENT: The Buyer and lender determine the down payment requirements during the pre-qualification process. The down payment is generally a % of purchase price. e.g.: 0%, 5%, 10%, 20%, 25% or 30%.

EQUITY: The difference between the market value of the property and the homeowners indebtedness (mortgage).

ESCROW Deposit Earnest Money: Money paid by the Buyer at the time an official offer is submitted to the Seller. This money is intended to demonstrate the good faith of the Buyer to complete the purchase. The money is then applied against the purchase price when the sale is finalized.

EXCHANGE: The trading of an equity in a piece of property.

FHA: Federal Housing Administration

FIRM COMMITMENT: A lenders agreement to make a loan to a specific borrower on a specific property. A FHA or PMI agreement to insure a loan on a specific property, with designated purchaser.

GRADUATED EQUITY OR RAPID AMORTIZATION: Fixed rate, long term mortgage (25-40 years). The payments, however, are increased annually in negotiated amounts. The additional dollars are allocated to the outstanding principal, thereby paying the mortgage off earlier than planned (12-15 years).

INVESTOR: A holder of a mortgage or the permanent lender for whom the mortgage banker services the loan. Any person or institution tat invests in mortgages.

LEASE TO PURCHASE AGREEMENT: Buyer makes a deposit for the future purchase of a property with the right to lease the property value.

LOAN COMMITMENT: A written promise by a lender to make a loan under certain terms and conditions. These include interest rate, length of the loan, lender fees, annual percentage rate, mortgage and hazard insurance and other special requirements.

LOAN TO VALUE RATIO: The ratio for the mortgage loan principal amount borrowed to the propertys appraised value (selling Price). On a $100,000 home, with a mortgage loan principal of $80,000, the loan-to-value ratio is 80 percent.

MARKET VALUE: Generally accepted as the best price that a ready, willing and able buyer will pay, and the lowest price a ready, willing and able seller will accept. In other words, the dollar figure t which there is a meeting of the minds.

MORTGAGE/DEED OF TRUST Pledge of real property to secure debt by a written instrument given by the mortgager. Should be recorded in the County Records Office.

MORTGAGE: The lender of money or the receiver of the mortgage document.

NOTE: A written promise to pay a certain amount of money.

ORIGINATION FEE: A fee or charge for work involved in the evaluation, preparation and submission of a proposed mortgage loan.

P.I.T.I.: Principal, Interest, Taxes, Insurance. Formula used in calculations of amount the purchaser is qualified or borrow.

POINT: The percent of a loan amount. This is a fee that the lending institution charges for the mortgage.

PRE-PAYMENT PENALTY: A fee paid to the mortgage for paying the mortgage before it becomes due. Also known as a pre-payment fee or a re-investment fee.

PREPAYMENT PRIVILEGE: The right given purchaser to pay all or part of a debt prior to its maturity. The mortgagee cannot be compelled to accept any payment other than those originally agreed to.

PRIVATELYLY INSURED MORTGAGE: A conventional mortgage loan on which a private mortgage insurance company protects the lender against loss due to payment default by the homeowner.

RENT WITH OPTION: A contact which gives one the right to lease property at a certain sum with the option to purchase at a future date.

SECOND MORTGAGE/SECOND TRUST: Junior Mortgage or Junior Lien: an additional loan imposed on property with a first mortgage. Generally at a higher interest rate and shorter terms that a first mortgage.

STRAIGHT LOAN: A loan with periodic payments of interest only, the principal sum due in one lump sum upon maturity.

TITLE: Often used interchangeably with the word ownership. It indicates the accumulation of all rights in property, the owner and others.

TITLE INSURANCE: An insurance policy which protects the insured (purchaser or lender) against loss arising from defects in a title. A title search is always requires before the title insurance is granted.