The home buying process can be overwhelming. The Powell Group of Keller Williams provides a packet to clients that helps inform them of the home purchase process. The packet includes a lot of wonderful information, but the “Real Estate Glossary” is where we want to focus today. We want to make sure your home buying process is enjoyable and we are here to help shine a light on some real estate terms. Understanding these terms will assist you with being a smarter home buyer. I am going to review with you a few that I believe are the most important terms. I will also attach the Real Estate Glossary document to provide additional insight.
Acceptance: The date when both parties, seller and buyer, have agreed to and completed signing and initialing the contract.
Appreciation: An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.
Deed: A written instrument, which when properly executed and delivered, conveys title to property.
Fannie Mae: Nickname for Federal National Mortgage Corporation (FNMA) a tax-paying corporation created by Congress to support the secondary mortgages insured by FHA or guaranteed by V.A, as well as conventional loans.
Freddie Mac: Nickname for Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled and operated corporation to support the secondary mortgage market. It purchases and sells residential conventional home mortgages.
Federal Housing Administration (FHA): An agency of the U.S. Department of Housing and Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.
Appraisal: An estimate of real estate value, usually issued to standards of FHA, VA, and FHMA. Recent comparable sales in the neighborhood are the most important factor in determining value.
Mortgage Insurance Premium (MIP): The amount paid by a mortgagor for mortgage insurance. This insurance protects the investor from possible loss in the event of a borrower’s default on a loan.
Mortgage: A legal document that pledges a property to the lender as security for payment of debt.
Graduated Payment Mortgage: Any loan where the borrower pays a portion of the interest due each month during the first few years of the loan. The payment increases gradually during the first few years to the amount necessary to fully amortize the loan during its life.
Title Insurance: An insurance policy that protects the insured (buyer or lender) against loss arising from defects in the title.
If this has you wanting to learn more please see our Real Estate Glossary . I hope that you all have a wonderful Monday!