7/23 and 5/25 Mortgage
Mortgages with a one-time rate adjustment after seven years and five years, respectively.
3/1, 5/1, 7/1, and 10/1 ARMs
Adjustable-rate mortgages in which the rate is fixed for three-year, five-year, seven-year and 10-year periods, respectively, but may adjust annually after that.
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower) or by using the right vested in the Due-on-Sale Clause.
Adjustable rate mortgage (ARM)
Is a mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Also sometimes known as the renegotiable rate mortgage, the variable rate mortagge, or the Canadian rollover.
Agreement for Sale
A document in which the purchaser agrees to buy certain estate (or personal property) and the seller agrees to sell under stated terms and conditions. Also called sales contract, binder or earnest money contract.
Gradual debt reduction. Normally, the reduction is made according to a predetermined schedule for installment payments.
Annual Percentage Rate (APR)
A term used in the Truth in Lending Act to represent the full cost of a loan, including interest and loan fees.
A formal, written estimation of the current market value of a home.
The appraiser decides the market value of a home based on its condition and the selling prices of comparable homes recently sold in the area. His or her job is to compute a fair estimate of market value to ehlp the lender decide a reasonable loan amount.
An increase in value, the opposite of depreciation
The value that a taxing authority places upon personal property for the purposes of taxation.
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller.
Balloon (Payment) Mortgage
Usually a short-term fixed-rate loan which involves a set interest rate for a certain period of time (usually five to seven years), and one large payment for the remaining amount of the principal at the conclusion of that tiem frame (may be able to convert or refinance).
A mortgagor who receives funds in the form of a loan with the obligation of repaying the loan in full with interest, if applicable.
One who receives a commission or fee for bringing the buyer and seller together and assisting in the negotiation of contracts between them.
The local regulations that control design, construction and materials used in construction. Building codes are based on safety and health standards.
Cashing out refers to the refinancing of a loan where the borrower will take out money on their own hoem. If a home is appraised at $100,000 and the borrower’s outstanding mortgage loan is $60,000, it is possible to enter into an 80% cash-out refinance transaction for a loan of $880,000 (80% of $100,000). The new mortgage of $880,000 will pay off the $60,000 loan and leave $20,000 cash-out to the borrowers.
Certificate of Occupancy
Written authorization given by a local municipality that allows a newly completed or substantially completed structure to be inhabited.
The conclusion of a transaction. In real estate, the closting includes the delivery of a deed, financial adjustments, the signing of notes, and the disbursements of funds necessary to the sale or loan transaction.
All of the costs to the buyer and seller individually that are associated with the purchase, sale or financing of a real property. They include, but are not limited to, prorating of agreed items such as taxes and rents, the cost of title insurance policies, and the cost of credit repots, recording fees and escrow fees.
A financial disclosure giving an account of all funds received and expected at the closing, including the escrow deposits for taxes, hazard insurance, and mortgage insurance.
Property pledged as security for a debt, such as real estate as security for a mortgage.
An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to compliance with stated conditions.
A condition that must be met before a contract is binding. For example, the sale of a house might be contingent upon the seller paying for certain repairs.