Real estate.txt

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  1. A loan or 'a' paper
    Credit rating where FICO score is 660 or above. No late mortage payments within 12 month period. Best credot rating to have when entering into a new loan.
  2. ARM
    • Adjustable Rate Mortage.
    • A moryage loan subject to changes in interest rate. When rate changes ARM monthly payments increases or decreases at intervals determined by lender; change in mobthly payment amount however is subject to cap.
  3. abstract of title
    Documents recording ownership of property throughout time
  4. Acceleration
    The right of the lender to demand payment on the outstanding balance of a loan
  5. Acceptance
    The written approval of the buyers offer by the seller
  6. Additional Payment Principal
    Money paid to the lender in addition to the established payment amount used directly against the loan principal to shorten the lenght of the loan
  7. Adjustable Rate Mortgage
    • ARM
    • Mortgage loan that doesn't have a fixed interest rate. During the life of the loan the intetest rate will change based on the index rate

    Also known as AMLs adjustable mortage loans or VRMs variable rate mortgages
  8. Adjustment date
    The actual date that the interest rate is changed for an ARM.
  9. Adjustment Index
    The published market index used to calculate the interest rate of an ARM at the time of origination or adjustment.
  10. Adjustment Interval
    The time between the interest rate change and the monthly payment for the ARM. The interval is usually every one, three or five years depending on the index.
  11. Affidavit
    A signed sworn statement made by the buyer or seller regarding the truthof information provided.
  12. Amenity
    A feature of the home or property that serves as a benefit to the buyer but is not necessary to its use; may be natural ( location, woods, water) or maybe a ( pool).
  13. American Society of Home Inspectors.
    Professional association of independent home inspectors.
  14. Amortization
    A payment plan that enavles you to reduce your debt gradually through monthly payments. Payments can be P or P&I or I only.
  15. Annual Mortgage Statement
    Yearly statement to borrowers detailing the remaining principal on the loan and the amount paid for taxes and interest.
  16. APR
    • Annual Percentage Rate.
    • A measure of the cost of credit expressed as a yearly rate. It includes interest as well as other charges. APR is a higher rate than the simple interest if the mortgage.
  17. Application
    First step in official loan approval process. This form is used to record important info about the potential borrower necesary to the underwriting process
  18. Application fee
    Fee charged by lender to process a loan application.
  19. Appraisal
    Documemt from a professional that gives an estimate of tge fair market value based on sales of comparable homes in the area and the features of tge property. The appraisal is required by the lender to ensurw that the mortage amount doesn't exceed the value of the property.
  20. Appraisal fee
    Fee charged by the appraiser to estimate the market value of a property.
  21. Appraised Value
    Estimate of the current market value of a property
  22. Appraiser
    Qualified individual who uses his experience and knowledge to prepare the appraisal estimate.
  23. Appreciation
    Increase in property value.
  24. Arbitration
    Legal method if resolving a dispute without going to court.
  25. As-Is-Condition
    The purchase or sale of a property in its existing condition without repairs.
  26. Asking Price
    Sellers stated price for the property
  27. Assessed value
    Value that a public official has placed on any asset (used to determine taxes)
  28. Assessor
    Gov't official who is responsible for determining the value of a property for the purpose of taxation.
  29. Assets.
    Any item with measurable value.
  30. Assumable Mortgage
    • Transfer of a mortage from seller to buyer.
    • Credit review of the new borrower may be required and there might be a fee for the assumption.
  31. Assumption clause
    A provision in the terms of a loan that allows the buyer to take legal responsibility for the mortage from the seller
  32. Automated Underwriting
    Loan processing completed through a computed bases system that evaluates past credot history to determine if a loan should be approved.
  33. Average price
    Determinibg the cost of a home by totaling the cost of all houses sold in one area and dividing by the number of homes sold.
  34. B loan or 'B' paper
    FICO score 620-659. Factors include two 30 day late mortgage payment and two to three 30 date late installment loan payments in the last 12 months. No delinquinces over 60 days are allowed. Should be 2-4 years since bankruptcy. Also referred to as Sub-Prime
  35. Back end ratio
    • Debt ratio
    • Ratio that compares the total of all monthly debt payments ( mortgage, real estate taxes and insurance, car loans, and other consumer loans) to gross monthly income.
  36. Debt ratio
    Back end ratio
  37. Back to back escrow
    Arrangements that an owner makes to oversee the sale of one property and tge purchase of another at the same time.
  38. Balance sheet
    Financial statement that shows assets, liabilities and net worth of an indivual or company.
  39. Ballon loan or mortgage.
    Motgage that typically offers low rates for an initial period of time (5,7,10) years; after that time elapses the balance is due or refinanced by the borrower
  40. Ballon payment
    Final lump sum payment due at the end of the ballon mortgage
  41. Bankruptcy
    Federal law whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they are able to repay
  42. Biweekly mortgage payment
    Mortage paid twice a month instead of once, reducing the amount of interest to be paid on the loan.
  43. Borrower
    Person approved to receive a loan and is then obligated to repay it and any additional fees in accordance to the loan terms
  44. Bridge loan
    • Short term loan paid back relatively fast.
    • Normally used until long term loan can be processed
  45. Broker
    • Liscensed individual or firm that charges a fee to serve as a mediator between the buyer and seller.
    • Mortgage brokers are individuals in the business of arranging funding or negotiating contracts for a client, but does not loan the money.
    • Real estate broker helps someone find a house.
  46. Building code
    Is a regulation that determines the design, construction and materials used in a building. It is Based on agreed upon safety stantards within a specific area
  47. Budget
    Detail record of all income earned and spent during a specific time
  48. Buy down
    Sellers pays amount to lender so the lender provides a lower interest rate and lower payments many times for an ARM. Seller may increase sales price to cover cost of the buy down
  49. C loan or 'c' paper
    FICO score 580-619. Three to four 30 day late mortgage payments and four to six 30 day late installment loan payments or two to four 60 day late payments. Should be one to two years since bankruptcy. Also refered to as Sub-Prime
  50. Callable debt
    Debt security whose insurer has right to redeem tge security at a specific price on or after a specified date but prior to its stated final maturity.
  51. Cap
    • Limit, such as one placed on an ARM, on how much a monthly payment or interest rate can increase or decrease, either at each adjustment period or during the life of the mortgage.
    • Payment caps do not limit the amount of interest the lender is earning, so they may cause negative amortization.
  52. Capacity
    Abilty to make mortgage payments on time. Dependant on assets and amount of income each month after paying housing cost, debts and other obligations.
  53. Capital gain
    Profit recieved based on difference of the original purchase price and total sale price.
  54. Capital improvement
    Property improvements that will either enhance the property value or will increase the useful life of the property
  55. Capital or cash reserve
    An indivual savings, investments or assets
  56. Cash out refinance
    When a borrower refinances a mortgage at a higher principal amount to get additional money. This usually occurs when the property has appreciated in value
  57. Cash reserves
    Cash amount sometimes required by buyer to be held in reserve in addition to the down payment and closing costs; amount is determined by the lender.
  58. Casualty protection
    Property insurance that covers any damage to the home and personal property either inside or outside the home
  59. Certificate of title
    A document provided by a qualified source, such as a title company, that shows the property legally belongs to the current owner; before the title is transferred at closing, it should be clear and free of all liens or other claims.
  60. Chapter 7 bankruptcy
    Bankruptcy that requires assets be liquidated in exchange for the cancellation of debt
  61. Chapter 13 bankruptcy
    This type of bankruptcy sets a payment plan between the borrower and the creditor monitored by the court. The homeowner can keep the property, but must make payments according to the court's terms within a 3 to 5 year period
  62. Charge-Off
    The portion of principal and interest due on a loan that is written off when deemed to be uncollectable
  63. Clear title
    A property that has no defects. Properties with clear titles are marketable for sale.
  64. Closing costs
    Fees for final property transfer not included in the price of the property. Typical closing costs include charges for the mortgage loan such as origination fees, discount points, appraisal fee, survey, title insurance, legal fees, real estate professional fees, prepayment of taxes and insurance, and a real estate transfer taxes. A common estimate of a buyers blosing cost is 2 to 4 percent of the purchase price of the home. A common estimate of a sellers closing cost is 3 to 9 percent.
  65. Closing
    Final step in property purchase where the title is transferred from seller to buyer. Closing occurs at a meeting with seller and buyer and settlement agents and other agents. At the closing the closing the seller recieves payment for the property also known as a settlement.
  66. Cloud on the title
    Any condition which affects clear title to real property
  67. Co borrower
    An addition person that is respondible for loan repayment and is listed on the title
  68. Co signed account
    An account signed by someone in addition to the primary borrower, making both people responsible for the amount borrowed
  69. Co signer
    Person that signs a credit application with another person, agreeing to be equally responsible for the repayment of the loan
  70. Collateral
    • A security in the form of money or property pledged for the payment of a loan.
    • For example, on a home loan, the home is collateral and can be taken away from the borrower if mortgage payments are not made
  71. Collection account
    An unpaid debt referred to a collection agency to collect on a bad debt. This type of account is reported to the credit bureau and will show on the borrower's credit report
  72. Commission
    An amount, usually a percentage of the property sales price that is collected by a real estate professional as a fee for negotiating the transaction. Traditionally the home seller pays the commission. The amount of commission is determined by the rral estate professional and the seller and can be as much as 6% of the sales price
  73. Common stock
    A security that provides voting rights in a corporation and pays a dividend after preferref stock holders have been paid. This is the most common stock held within a company
  74. Comparative Market analysis
    • COMPS
    • A property evaluation that determines property value by comparing similar properties sold with the last year
  75. Compensating factors
    Factors that show the ability to repay a loan based on less traditional criteria, such as employment, rent, and utility payment history.
  76. Condominium
    A form of ownership in which individuals purchase and own a unit of housing in a multi unit complex. The owner also shares financial responsibilty for common areas
  77. Conforming loan
    A loan tgat does not exceed Fannie Mae and Freddie Mac loan limits. Freddie Mac and Fannie Mae loans are referred to as conforming loans
  78. Consideration
    An item of value given in exchange for a promise or act
  79. Construction loan
    A short term loan, to finance the cost of building a new home. The lenders pays the bulider based on milestones accomplished during the building process. For example, once a sub-contractor pours the foundation and it is approved by inspectors the lender will pay for their service.
  80. Contingency
    A clause in a purchase contract outlining conditions that must be fulfilled before the contract is executed. Both buyer and seller may include contingences in a contract, but both parties must accept the contingences.
  81. Conventional loan
    Private sector loan, one that is not guaranteed or insured by the U.S, Gov't
  82. Conversion clause
    A provision in some ARMsallowing it to change to a fixed rate loan at some point during the term. Usually conversions are allowed at the end of the first adjustment period. At the end of the conversion, the new fixed rare is generally setat one of the ratesthen prevailing for fixed rate mortgages. There may be additional cost for this clause.
  83. Convertible ARM
    An adjustable rate mortgage that provides the borrower the ability to convert to a fixed rate within a specific time.
  84. Cooperative (Co-op)
    Residents purchase stock in a cooperative corporation that owns a structure; each stockholder is then entitled to live in a specific unit of the structure and is responsible for paying a portion of the loan
  85. Cost of Funds Index (COFI)
    An index used to determineinterest rate changes for some adjustable rate mortgage
  86. Counter Offer
    A rejection to all or part of a purchase offer that negotiates different terms to reach an acceptable sales contract.
  87. Covenants
    Legally enforcable terms that govern the use of property. These terms are tranferred with the property deed. Discriminatory convenants are illegal and unenforceable. Also known as a condition, restriction, deed restriction or restrictive covenant.
  88. Credit
    An agreement that a person will borrow money and repay it to the lender over time
  89. Credit bureau
    An agency that provides financial information and payment history to lenders aboit potential borrowers. Also known as a National Credit Repository.
  90. Credit Counseling
    Education on how to improve bad credit and how to avoid having more debt than can be repaid.
  91. Credit Enhancement.
    A method used by a lender to reduce default of a loan by requiring collateral, mortgage insurance, or other agreements.
  92. Credit Grantor
    The lender that provides a loan or credit.
  93. Credit history
    A record of an individual that lists all debts and the payment history for each. The report that is generated from the history is called a credit report. Lenders use this information to gauge a potential borrower's ability to repay loan.
  94. Credit loss ratio
    The ratio of credit related losses to the dollar amount of MBS outstanding and total mortgages owned by the corporation.
  95. Credit Relates Expenses
    Forclosed property expenses plus the provision for losses.
  96. Credit Related Losses
    Forclosed property expenses combined with charge-offs.
  97. Credit Repair Companies
    Private, for-profit businesses that claim to offer consumers credit and debt repayment difficulties assistance with their credit problems and a bad credit report.
  98. Credit Report
    A report generated by the credit bureau that contains the borrowers credit history for the past sevev years. Lenders use this information to determine if a loan will be granted.
  99. Credit Risk
    A term used to describe the possibility of default on a loan by a borrower.
  100. Credit Score
    A score calculated by using a person's credit report to determine the likelihood of a loan being repaid on time. Scores range from about 360-840; a lower score meaning a person is a higher risk, while a higher score means that there is less risk.
  101. Credit Union
    A non-profit financial institution federally regulated and owned by the members of people who use the available services.
  102. Creditor
    The lending institution providing a loan or credit.
  103. Creditworthiness
    The way a lender measures the ability of a person to qualify and repay a loan.
  104. Debtor
    The person or entity that borrows money. The term debtor may be used interchangeably with the term borrower.
  105. Debt-To-Income Ratio
    A comparison or ratio of gross income to housing and non housing expenses; With FHA, the monthly mortgage payment should be no more than 29% of monthly gross income ( before taxes) and the mortgage payment combined with non-housing debts should not exceex 41% of income.
  106. Debt Security
    A security that represents a loan from an investor to an issuer. The issuer in turn agrees to pay interest in addition to the principal amount borrowed.
  107. Deductible
    The amount of cash payment that is made by the insured ( the homeowner) to cover a portion of a damage or loss. Sometimes also called "out of pocket expenses". For example, out of a total damage claim of $1000, the homeowner might pay a $250 deductible toward the loss, while the insurance company pays $750 toward the loss. Typically, the higher the deductible, the lower the cost of the policy.
  108. Deed
    A document that legally transfers ownership of property from one person to another. The deed is recorded on public record with the property description and the owner's signature. Also known as the title.
  109. Default
    The inability to make timely monthly mortgage payments or otherwise comply with mortgage terms. A loan is considered in default when payment has not been paid after 60 to 90 days. Once in default the lender can excercise legal rights defined in the contract to begin forclosure proceedings.
  110. Delinquency
    Failure of a borrower to make timely payments under a loan agreement. Generally after fifteen days a late fee may be assessed
  111. Deposit (Earnest Money)
    Money put down by a potential buyer to show that they are serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned to the buyer if the contingencies are not met to the buyer's satisfaction.
  112. Depreciation
    A decrease in the value or price of a property due to changes in market conditions, wear and tear on the property, or other factors.
  113. Derivative
    A contract between two or more parties where the securitiesis dependant on the price of another investment.
  114. Disclosures
    The release of relavant information about a property that may influence the final sale, especially if it represents defects or problems. "Full disclosure" usially refers to the responsibility of the seller to voluntarily provide all known information about the property. Some disclosures may be required by law, such as the federal requirement to warn of potential lead based paint hazards in pre-1978 housing. A seller found to have knowingingly lied about a defect may face legal penalties.
  115. Discount point
    Normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the intetest rate on a loan. In an ARM with the initial rate discount, the lender gives up a number of percentage points in interest to give you a lower rate and lower payments for part of the mortgage term ( usually for one year or less). After the discount period, the ARM rate will probably go up depending on the index rate.
  116. Down payment
    The portion of a home's purchase that is paid in cash and is not part of the mortgage loan. This amount varies based on the loan type, but is determined by taking the difference of the sale price and the actual mortgage loan amount. Mortgage insurance is required when a down payment less than 20% is made.
  117. Document Recording
    After closing on a loan, certain documents are filed and made public records. Discharges for the prior mortgage holder are filed first. Then the deed is filed with the new owner's and mortgage company's names.
  118. Due on sale clause
    A provision of a loan allowing the lender to demand full repayment of the loan if the property is sold.
  119. Duration
    The number of years it will take to receive the present value of all future payments on a security to include both principal and interest.
  120. Earnest Money (Deposit)
    Money put down by a potential buyer to show that they are serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal. During the contingency period the money may be returned to the buyer if the contingencies are not met to the buyer's satisfaction.
  121. Earnings Per Share (EPS)
    A corporation's profit that is divided among each share of common stock. It is determined by taking the net earnings divided by the number of outstanding common stocks held. This is a way that a company reports profitablity.
  122. Easements.
    The legal rights that give someone other than the owner access to use property for a specific purpose. Easements may affect property balues and are sometimes a part of the deed.
  123. EEM
    • Energy Efficient Mortgage
    • An FHA program that helps homebuyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a new or existing home as part of the home purchase.
  124. Eminent Domain
    When a government takes private property for public use. The owner receives payment for its fair market value. The property can then proceed to condemnation proceedings.
  125. Encroachment
    A structure that extends over the legal property line on to another indivual's property. The property surveyor will note any encroachment on the lot survey done before property transfer. The person who owns the structure will be askes to remove it to prevent future problems.
  126. Encumbrance
    Anything that affects title to a property, such as loans, leases, easements, or restrictions.
  127. Equal credit Opportunity Act ( ECOA)
    A federal law requiring lenders to make credit available equally without discrimnation based on race, color, religion, national orgin, age, sex, martial status, or receipt of income from public assistance programs.
  128. Equity
    An ower's financial interest in a property; calculated by substracting the amount still owed on the mortgage loon(s) from the fair market value of the property.
  129. Escape Clause
    A provision in a purchase contract that allows either party to cancel part or the entire contract if the other does not respond to changes to the within a set period. The most common use of escape clause is if the buyer makes the purchase offer contingent on the sale of another house.
  130. Escrow
    Funds held in an account to be used by the lender to pay for home insurance and property taxes. The funds may also be held by a third party until contractual conditions are met and then paid out.
  131. Escrow account
    A seperate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.
  132. Estate
    The ownership interest of a person in real property. The sum total of all property, real and personal, owed by a person.
  133. Exclusive Listing
    A written contract giving a real estate agent the exclusive right to sell a property for a specific timeframe.
  134. FICO Score
    FICO is an abbreviation for Fair Isaac Corporation and refers to a person's credit score based on credit history. Lenders and credit card companies use the number to decide if the person is likely to pay his or her bills. A Credit score is evaluated using infomation from three major crrdit bureaus and is usually between 300 and 850.
  135. FSBO ( For sale by owner)
    A home that is offered for sale by the owner without the benefit of a real estate professional.
  136. Fair Housing Act.
    A law that prohibits discrimination in all facets of the home buying process on the basis of race, color, national origin, religion, sex, familial staus, or disability
  137. Fair Credit Reporting Act
    Federal act to ensure that credit bureaus are fair and accurate protecting the individual's privacy rights enacted in 1971 and revised in October 1997
  138. Fair Market Value
    The hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation.
  139. Familial Status
    HUD uses this term to describe a single person, a pregnant woman or a household with children unders 18 living with parents or legal custodians who might experience housing discrimination.
  140. Fannie Mae
    Federal national Mortgage Association (FNMA); a federally-chartered enterprise owned by private stockholders that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages, Fannie Mae supplies funds that lenders loan to potential homebuyers. Also known as a Gov't Sponsored Enterprise( GSE).
  141. FHA
    • Federal Housing Administration.
    • Established in 1934 to advance homeownership opportunities for all Americans.
    • Assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults.
    • This encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.
  142. First Mortgage
    The mortgage with first priority if the loan is not paid.
  143. Fixed expenses
    Payments that do not vary from month to month.
  144. Fixed-Rate Mortgage
    A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.
  145. Fixture
    Personal property permanently attsched to real estate or real property that becomes a part of the real estate.
  146. Float
    The act of throwing an interest rate and discount points to fluctuate with changes in the market.
  147. Flood Insurance
    Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.
  148. Forbearance
    A lender may decide not to take legal action when a birrower is late in making a payment. Usually this occurs when a borrower sets up a plan that both sides agree will bring overdue mortgage payments up to date.
  149. Foreclosure
    A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower. Foreclosure laws are based on the statutes of each state.
  150. Freddie Mac
    Federal Home Loan Mortgage Corporation (FHLM); a federally chartered corporation that purchases residential mortgages; securitizes them, and sells them to investors; this provides lenders with funds for new homebuyers. Also known as a Government Sponsored Enterprise (GSE).
  151. Front End Ratio
    A percentage comparing a borrower's total monthly cost to buy a house (mortgage principal and interest, insurance, and real estate taxes) to monthly income before deductions.
  152. GSE
    • Gov't Sponsored Enterprises.
    • A collection of financial services corporations formed by the US Congress to reduce interest rates for farmers and homeowners. Examples include Fannie Mae and Freddie Mac.
  153. Ginnie Mae
    • Gov't National Mortgage Association (GNMA)
    • A gov't owned corporation overseen by the US Dept. of Housing and Urban Development.
    • Ginnie Mae pools FHA-insured and VA-guaranteed loans to back securities for private investments; as with Fannie Mae and Freddie Mac, the investment income provides funding that may be lent to eligible borrowers by lenders.
  154. Global Debt Facility.
    Designed to allow investors all over the world to purchase debt (loans) of US dollar and foreign currency through a variety of clearing systems.
  155. Good Faith Estimate
    An estimate of all closing fees including pre-paid and escrow items as well as lender charges; must be given to the borrower within 3 days after submission of loan application.
  156. Graduated Payment Mortgages.
    Mortgages that begin with lower monthly payments they get slowly larger over a period of years, eventually reaching a fixed level and remaining there for the life of the loan. Graduated payment loans may be good if you expect your annual income to increase.
  157. Grantee
    An individual to whom an interest in real property is conveyed.
  158. Grantor
    An individual conveying an intetest in real property.
  159. Gross Income
    Money earned before taxes and other deduction. Sometimes it may include from self-employment, rental property, alimony, child support, public assistance payments, and retirement benefits.
  160. Guaranty Fee
    Payment to Fannie Mae from a lender for the assurance of timely principal and interest payments to MBS (Mortgage Backed Security) security holders.
  161. HECM (Reverse Mortgage)
    The reverse mortgage is used by senior homeowners age 62 and older to convert the equity in their home into monthly streams of income and/or a line of credit to be repaid when they no longer occupy the home. A lending institution such as a bank, mortgage lender, credit union or savings and loan association funds the FHA loan, commonly known as HECM.
  162. Hazard Insurance
    Protection against a specific loss, such as fire, wind etc. over a period of time that is secured by the payment of a regularly scheduled premium.
  163. HELP
    • Homebuyer Education Learning Program.
    • An educational program from the FHA that counsels people about the homebuying process; HELP covers topics like budgeting, finding a home, getting a loan,and hone maintenance; in most cases completion of the program msy entitle the homebuyer to reduce the initial FHA mortgage premium from 2.25% to 1.75 of the home purchase price.
  164. Home Equity Line of Credit
    A mortgage loan, usually a second mortgage, allowing a borrower to obtain cash against the equity of a home, up to a predeterminded amount.
  165. Home Equity Loan
    A loan backed by the value of a home (real estate). If the borrower defaults or does not pay the loan, the lender has some rights to the property. The borrower can usually claim a home equity loan as a tax deduction.
  166. Home Inspection
    An examination of the structure and mechanical systems to determine a home's quality, soundness and safety; makes the potential buyer aware of any repairs that may be needed. The homebuyer generally pays inspection fees.
  167. Home Warranty
    Offers protection for mechanical systems and attached appliances against any unexpected repairs not covered by homeowner's insurance; coverage extends over a specific time period and does not cover the home's structure.
  168. Homeowner's Insurance.
    An insurance policy, also called hazard insurance, that combines protection against damage to a dwelling and its contents including fire, storms and other damages witg protection against claims of negligence or inappropriate action that result in someone's injury or property damage. Most lenders require homeowners insurance and may escrow the cost.

    Flood insurance is generally not included in standard policies and must be purchased separately.
  169. Homeownership Education Classes.
    Classes that stress the need to develop a strong credit history and offer information about how to get a mortgage approved, qualify for a loan, choose an affordable home, go through financing and closing processes, and avoid mortgage problems that causr people to lose their homes.
  170. Homestead Credit
    Property tax credit program, offered by some state governments, that provides reduction in property taxes to eligible households.
  171. Housing Counseling Agency.
    Provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and home buying.
  172. HUD
    The US department of Housing and Urbad Development; established in 1965, HUD works to create a deceny home and suitable living enviroment for all Americans; it does this by addressing housing needs, improving the developing American communities, and enforcing fair housing laws.
  173. HUD1 Statement
    Also known as the "settlement sheet", or "closing statement" it itemizes all closing costs; it must be given to the borrower on or before closing. Items that appear on the statement include real estate commissions, loan fees, points, and escrow amounts.
  174. HVAC
    Heating, Ventilation and Air Conditioning; a home's heating and cooling system.
  175. Indemnification
    To secure against any loss or damage, compensate or give security for reimbursement for lossor damage incurred. A homeowner should negotiate for inclusions of an indemnification provision in a contract with a general contractor or for a separate indemnity agreement protecting the homeowner from harm, loss or damage caused by actions or omission of the general (and all sub) contractor.
  176. Index
    The measure of interst rate changes that the lender uses to decide how much the interest rate of an ARM will change over time. No one can be sure when the interest rate will go up or down. If a lender bases interest rate adjustments on the average value of an index over time, your interest rate will not be volatile. You should ask your lender how the index for any ARM you are consideringing has chsnged in recent years, and where it is reported.
  177. Inflation
    The number of dollars in circulation exceeds the amount of goods and services available for purchase; inflation results in a decrease in the dollar value.
  178. Inflation coverage.
    Endorsement to a homeowner's policy that automatically adjusts tge amount of insurance to compensate for inflation rises in the home's value. This type of coverage does not adjust for increases in the home's value due to improvements.
  179. Inquiry
    A credit report request. Each time a credit application is completed or more credit is requested is counts as an inquiry. A large number of inquiries on a credit report can sometimes make a credit score lower.
  180. Interest.
    A fee charged for the use of borrowing money.
  181. Interest rate.
    The amount of interest charged on a monthly loan payment, expressed as a percentage.
  182. Interest Rate Swap.
    A transaction between two parties where each agrees to exchange payments tied to different interest rate for a specified period of time, generally based on a national principal amount.
  183. Intermediate term mortgage
    A mortgage loan with a contractual maturity from the time of purchase equal to or less than 20 years.
  184. Insurance
    Protection against a specific loss, such as fire, wind etc., over a period of time that is secured by the payment of a regularly scheduled premium.
  185. Joint Tenancy
    • ( with rights of survivorship).
    • Two or more owners share equal ownership and rights to the property. If a joint owner dies, his or her share of the property passes on to the other owners, without probate. In joint tenancy, ownership of the property cannot be willed to someone who is not a joint owner.
  186. Judgement
    A legal decision; when requiring debt repayment, a judgement may include a property lien that secures the creditor's claim by providing a collateral source.
  187. Jumbo loan.
    • Also called a Non-Conforming loan.
    • This is a loan that exceeds Fannie Mae's and Freddie Mac's loan limits. Freddie M ac and Fannie Mae loans are referred to as conforming loans.
  188. Late Payment Charges.
    The penality the homeowner must pay when a mortgage payment is made after the due date grace period.
  189. Lease
    A written agreement between the property owner and a tenant (resident) that stipulates the payment and conditions under which the tenant may occupy a home or apartment and states a specific period of time.
  190. Lease purchase.
    • Also called Lease Option.
    • Assists low to moderate income homebuyings in purchasing a home by allowing them to lease a home with an option to buy; the rent payment is made up of the monthly rental payment plus an additional amount that is credited to an account for use as a downpayment.
  191. Lender
    A term referring to a person or company that makes loans for real estate purchases. Sometimes referred to as a loan officer or lender.
  192. Lender Option Commitments
    An agreement giving a lender the option to deliver loans or securities by a certain date by agreed upon terms.
  193. Liabilities
    A person's financial obligations such as long term/ short term debt, and other financial obligations to be paid.
  194. Liability Insurance.
    Insurance coverage that protects against claims alleging a proprty owner's negligence or action resulted in bodily injury or damage to another person. It is normally included in homeowner's insurance policy.
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