Tuesday, November 21, 2006
As in any industry, the real estate world has a lot of jargon. That jargon can be exceptionally confusing, especially for first-time homebuyers. Following are a few of the terms you are most likely to come across as a first-time homebuyer, which will hopefully help alleviate the confusion.
Adjustable-Rate Mortgage (ARM): A loan characterized by a fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index.
Closing: The occasion when a sale is finalized; the buyer signs the mortgage and closing costs are paid.
Closing costs: Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property.
Counteroffer: A new offer made in response to an offer received. It has the effect of rejecting the original offer which cannot be accepted thereafter unless revived by the offeror.
Earnest money: Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
HUD 1 Statement: An itemized statement of all charges that will be collected at closing, whether they are required by the lender or a third party.
Private Mortgage Insurance (PMI): Insurance provided by private carrier that protects a lender against a loss in the event of a foreclosure or deficiency.
The F.C. Tucker Web site (www.fctucker.com/firstbuy/terms/index.html) has a more complete glossary of real estate terms.
Happy House Hunting,