Adjustable Rate Mortgage (ARM): A home loan whose payments adjust periodically based on the rise and fall of interest rates. These adjustments usually occur within predetermined limits called CAPS. Typically these loans offer a lower interest rate initially.
Appraisal: An estimate of value done by a licensed or certified appraiser. Lenders usually require that the property appraise for the selling price before they will approve a mortgage loan.
Cap: In an adjustable rate mortgage, the limit on how much the interest rate or monthly payment can change during an adjustment period and/or over the life of the loan.
Closing: The final step in the home buying process. The buyer and seller meet to execute documents, transfer title, and exchange funds.
Closing Costs: Costs charged by the lender in connection with the issuance of a mortgage loan. They include such items as attorney's fees, surveys, origination fees, recording costs, and others. They do not include prepaid items charged to the purchaser and set aside for future payment of taxes and insurance.
Closing Statement: The statement listing the financial settlement between buyer and seller, as well as the costs each will pay.
Contingency: In a real estate contract, another word for "IF." Such as, "I will purchase your house contingent upon (if) obtaining a specific type of loan."
Conventional Mortgage: A mortgage loan made directly to a borrower without benefit of any government insurance or guarantee.
Deed: A written instrument that, when executed and delivered, conveys title to or an interest in real estate.
Down Payment: A portion of the purchase price that the lender requires the buyer to pay at closing. This is separate from closing costs or prepaid items. On the day of closing it is the buyers' "equity" in the home.
Earnest money, or binder: Money placed on deposit by the buyer to show serious intent to the seller. These funds are applied to the down payment at closing. Typically the money is refunded if one of the contingencies in the contract is not met.
Equity: The difference in the value of the property and the amount of money owed on the property.
Escrow Account: A savings account established for the buyer by the lender. A portion of the buyers' monthly payment is deposited into this account for payment of future taxes and insurance.
FHA (Federal Housing Administration): A subsidiary of the Department of Housing and Urban Development that insures lenders against losses on loans covered by their programs (FHA loans).
Fixed Rate Mortgage: A loan whose interest rate never changes throughout its duration.
Fixture: Any item attached to property which, by its attachment, becomes a part of the real estate. Examples include ceiling fans, light fixtures, towel bars, flowers, trees, fences, built-in appliances, etc. These items become a part of the real estate and are sold with it unless they are specifically excluded in the sales contract.
Hazard Insurance (also known as Homeowners Insurance): This insurance protects you and your lender against damage from hazards such as fire and wind storm.
Listing Agreement: A written employment agreement in which the property owner authorizes a real estate broker to act as agent in the sale and marketing of their property.
Loan-To-Value Ratio: The ratio (%) obtained by dividing the loan amount by the selling price. Example: A $90,000 loan on a $100,000 house would result in a 90% loan-to-value ratio.
Mortgage: A written instrument used to pledge real estate as collateral for a loan. See Security Deed.
Mortgage Insurance: Insurance required by lenders to help pay off a loan in the event of foreclosure.
Note: A written promise to repay a loan. In real estate transactions the note is secured by a mortgage or, in Georgia, by a security deed.
Origination Fee: One of the fees charged by the lender for arranging the loan. Part of the closing costs.
Personal Property: Property which by nature is not attached to the land and therefore moveable. It is not a part of the real property. Examples: automobiles, non-built-in appliances, draperies, etc.
Prepaid Items: Items paid to the lender at closing to establish the buyer's escrow account for payment of taxes and insurance.
Prorate: To divide monies, or obligations into fair shares between buyers and sellers. Example: Taxes are usually prorated between buyers and sellers based on the number of days during the tax year that each owns the property.
Real Property: Land or any improvements or attachments to the land such as buildings, trees, fences, fixtures, etc.
Security Deed: The instrument used in Georgia instead of a mortgage. It pledges real estate as collateral for a loan.
Title: The legal right of ownership of property.
Title Defect: A problem or flaw in the chain of ownership that must be corrected before good title can be transferred.
Title Insurance: Insurance required by lenders to protect against an undiscovered defect in the title to real estate For more information about real estate in Georgia, please contact us.
Selling a home can be complex. Fickling & Company uses market analysis, MLS listing services, an extensive advertising campaign, and the expertise of our professional real estate agents to help you with selling your home in the Middle Georgia area.