Personal Finance Chapter 9
Appraisal
an estimate of the current value of the property, can provide a good indication of the price you should set.
Buy down
an interest rate subsidy from a home builder or a real estate developer that reduces the mortgage payments during the first few years of the loan.
Motrgage brokers
can help home buyers obtain financing
Prefabricated home
components built in a factory and then assembled at the housing site.
Balloon Mortgage
fixed monthly payments and a very large final payment (after 3, 5, or 7 years.)
Adjustable - rate morgage
has an interest rate that increases or decreases during the life of the loan.
The Real Estate Settlement Procedures Act
helps home buyers understand the closing process and closing costs.
Lifestyle
how you spend your time and money.
Payment cap
keeps the payments on an adjustable-rate mortgage at a given level or limits the amount to which those payments can rise.
Escrow account
money usually deposited with the lending institution, for the payment of property taxes and homeowner's insurance.
Refinance
obtain a new mortgage at a lower rate.
Title Insurance
one closing cost. Before being purchased they make sure the property is free of claims such as unpaid real estate taxes. During the mortgage term, it protects the buyer and lender from loss.
Points
prepaid interest charged by the lender.
Reverse Mortgage
provide elderly homeowners with tax-free income in the form of a loan that is paid back (with interest) when the home is sold or the homeowner dies.
buyer agents
represent the buyer's interest, and may be paid by either the seller or the buyer.
Homeowners Protection Act
requires that a PMI policy be terminated automatically when a homeowner's equity reaches 22 percent of the property value at the time the mortgage was executed.
zoning laws
restrictions on how property in an area can be used.
Rate Cap
restricts the amount by which the interest can increase or decrease during the ARM term.
Mobile homes (second type of Manufactured home)
scary
amortization
the balance owed is reduced with each payment
deed
the document that transfers ownership of property from one party to anther.
Equity
the home value less the amount owed on the mortgage
Conventional Mortgage
usually has equal payments over 15, 20, or 30 years based on a fixed interest rate.
purchase agrement
A contract that states your legal offer to purchase the home
Cooperative housing
A form of housing in which a building containing a number of housing units is owned by a nonprofit organization whose members rent the units.
Manufactured homes
A housing unit that is fully or partially assembling in a factory before being moved to the living site.
Lease
A legal document that defines the conditions of a rental agreement.
Mortgage
A long term loan on a specific piece of property such as a home or other real estate.
Earnest Money
A portion of the home price that they buyer deposits as evidence of good faith to indicate a serious purchase offer.
Condominium
An individually owned housing unit in a building with several such units.
Closing Costs
Charges paid when a real estate transaction is completed
Security Deposit
Given before you move in to cover any possible damages you may cause.
PMI
Private mortgage insurance, protects the lender from financial loss due to default.
dual agent
a real estate agent working for both the buyer and seller
second mortgage
allows a homeowner to borrow on the paid-up value of the property.
Subletting
allows you to have another person take over rent payments and live in the rental unit.