Victorville Real Estate

Glossary of Real Estate Terms

Amortization. The gradual repayment of a mortgage loan by installments.
Appraisal. An estimate of value based upon an analysis of information.
APR. The Annual Percentage Rate is the borrower's actual cost of a loan. It includes the interest rate and other loan origination charges, and is expressed as a yearly rate and calculated over the life of the loan.
Assessed Value. Value placed on a property as the basis for taxation.
Assessor. A public official who establishes the value of a property for taxation purposes.
Assumable Mortgage. A mortgage that can be taken over ("assumed") by the buyer when a home is sold.
Balloon Payment. The final lump sum payment that is made at the maturity date of a balloon mortgage.
Bearing Wall. A wall supporting a vertical load in addition to its own weight.
Broker. One who acts as an agent for others in Real Estate transactions for a fee.
Building Code. Local regulations that control design, construction, and materials used in construction. Building codes are based on safety and health standards.
Capital Gain. Income from the sale of an asset.
CC&Rs. Covenants, conditions and restrictions
Closing Statement. An accounting of funds made to the buyer and seller separately at the completion of a Real Estate transaction.
Commission. An agents compensation for performing the duties of his agency.
Comparable Sales. Sales which have similar characteristics to the subject property, used for analysis by the appraiser.
Conforming Loan. A loan that meets all eligibility requirements of federal agencies other than FHA and VA, and is under $300,700. If the loan amount is over $300,700, it would be considered a non-conforming or "jumbo" loan.
Contigency. A condition that must be met before a contract is legally binding.
Credit Report. A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.
CRV. Certificate of reasonable value - The federal Veterans Administration appraisal of property value.
Deed. A written instrument which conveys title.
Discount Points. Discount points are often used to describe a type of fee that lenders charge. Discount points are additional funds you pay the lender at closing to get a lower interest rate on your mortgage.
Earnest Money. Down payment made by a purchaser of Real Estate as evidence of good faith.
Easement. A right, privelage or interest which one party has in the land of another such as a right of way.
Encroachment. Construction of any improvements on the property of another.
Equity. The difference between the current market value of a property and the total amount still owed against that property.
Escrow. The deposit of instruments, funds and instructions with a neutral party who will carry out the provisions of a contract or agreement.
Exclusive Right to Sell. A type of written listing agreement between agent and owner giving agent the right to collect a commission if the property is sold by anyone during the term of the agreement.
FHA. Federal Housing Administration - a government agency that insures mortgage loans
FHA Loan. With FHA insurance, you can purchase a home with a low down payment from 3 percent to 5 percent of the FHA appraised value or the purchase price, whichever is lower.
Foreclosure. A legal procedure in which a mortgaged property is sold to pay the outstanding debt in case of default.
Hazard Insurance. Insurance coverage that provides compensation to the insured in case of property loss or damage.
Homestead. A home upon which the owner has recorded a Declaration of Homestead, this protects the home against judgements up to an amount specified in the statutes.
HUD U.S. Department of Housing and Urban Development. The Office of Housing/Federal Housing Administration within HUD insures home mortgage loans made by l enders and sets minimum standards for such homes.
HUD-1 Statement. The HUD-1 Settlement Statement itemizes the amounts to be paid by the buyer and the seller at closing.
Impounds. A trust account set up by lenders to accumulate funds to pay taxes and insurance. They are usually collected along with the mortgage payment.
Income to Debt Ratio. A qualifying ratio used in underwriting a residential mortgage loan, which computes the percentage of monthly income, required to meet the monthly housing expense.
Interest Rate. The percentage of a sum of money which is charged for its use.
Joint Tenancy. Joint ownership by two or more people with the right of survivorship. All tenants have equal rights and own an equal interest.
Lease. A contract between property owner and tenant specifying the conditions under which the tenant may occupy and use the property.
LIBOR. The London Interbank Offer Rate. An interest rate charged among banks in London for short term loans denominated in a specific currency. A common index for debt securities.
Lien. A legal claim against a property that must be paid off when the property is sold.
Liquidated Damages. An agreed upon amount of damages to apply if a certain event occurs.
Listing. An employment contract between property owner and agent authorizing the agent to perform services for the owner in order to secure a buyer for that property.
Market Value. The price at which a willing buyer would buy and a willing seller would sell when neither are subject to undue pressure.
MLS. The Multiple Listing Service where members post their clients properties for sale so that other members have the opportunity to find buyers.
Mortgage. A legal instrument wherein property is used to secure the payment of a debt.
Notary Public. An officer who is authorized to take the acknowledgement of persons executing documents, to sign the certificate and affix his seal.
Option. A right given (in exchange for a fee) to purchase or lease a property according to specified terms and conditions.
Origination Fee. The fee lenders charge to borrowers to prepare documents, process and close the loan. Usually stated as a percentage of the loan.
PITI. Acronym for items included in a monthly mortgage payment: principal, interest, taxes and insurance.
PMI. Private Mortgage Insurance is provided to protect lenders against loss if a borrower defaults. Most lenders generally require PMI for a loan with a loan-to-value ratio in excess of 80%.
Prepayment Penalty. A fee that may be charged to a borrower who pays off a loan before it is due.
Proration of Taxes. To divide the taxes in proportion to the time in use.
Rate Lock. A commitment issued by a lender to a borrower guaranteeing specified interest rate for a specified period of time.
REALTOR. A member of the National Association of Realtors. realtors subscribe to a higher code of ethics.
Secondary Financing. An additional loan secured by a second mortgage or trust deed on real property, could apply to any loan other than the first one.
Septic Tank. An underground tank in which sewage from the house is reduced to liquid by bacterial action and then drained away.
Special Assessment. A charge by a public authority against Real Estate to pay the cost of public works such as street lighting and improvements.
Subdivision. A housing development that is created by dividing a tract of land into individual lots for sale or lease.
Tenancy in Common. Ownership by two or more people who hold undivided interests (not necessarily equal). There is no right of survivorship.
Termites. Wood eating insects.
Title. An instrument which provides evidence of ownership
Title Insurance. Insurance written by a title company to protect property owner against loss in the event that title is found to be flawed.
Transfer Fee. Fees charged by a municipality to defray the cost of recording a transfer of ownership.
Trust Deed. A legal document wherin a buyer pledges real property as a guarantee for the repayment of a loan.
Underwriter. One who analyzes a potential borrowers ability to repay a loan.
Zoning. An act by a city or county which specifies the type of use to which a property may be put.
Jim Forsyth e-PRO
College Realty Inc. GMAC Real Estate,
14767 Bear Valley Rd. Hesperia, CA, 92345
Cell: (760) 617-3390     Fax: (760) 281-1701