1) Appraisal

The evaluation of a property to determine its price based on previous sales of similar properties.

2) Closing Costs

Expenses incurred in the purchase and sale of property that are paid at the time of closing including: title insurance, attorney fees, appraisal fees, recording fees and taxes.

3) Code of Ethics

A standard of conduct required by license laws and by the National Association of Realtors.

4) Down Payment

The amount of money a buyer pays upfront to purchase the property. This is typically around 10% of the total cost.

5) Earnest Money Deposit

The deposit a buyer makes at the time of submitting an offer to demonstrate the true intent to purchase.

6) Equity

The different between what something is worth and any outstanding mortgage due.

7) Escrow

A third-party account for holding documents and money related to the loan.

8) Fair Market Value

The price for a property agree upon between a buyer and seller in a competitive market.

9) Fixed-Rate Mortgage

A Loan in which the interest rate does not change throughout the term of the loan.

10) Foreclosure

The lender, under a defaulted mortgage, takes title to the property for the purposes of selling it to recoup money owed under the mortgage.

11) Holding Period

The length of time a property is owned.

12) Liability

A debt or claim that is owned. This is used to determine Net Worth.

13) Lock-In Rate Agreement

A guarantee from the lender that the applicant will recieve a specified interest rate on the mortgage loan.

14) Market Value

An estimation of the price for a property in relation to the current real estate market.

15) Net Worth

The difference between your assests and your liabilities. This is used to determine if you qualify for a loan.

16) Origination

The first step in the mortgage loan process consisting of the completion of the application.

17) Pre-Approval

A lender’s estimate of how much you could be eligable to borrow based on credit history and income.

18) Real Estate Broker

An individual employed as an agent to bring buyers and sellers together and assist in negotating real estate contracts between them.

19) Refinancing

The proceeds of a new loan used to pay off an existing mortgage on the same property.

20) Title

The documentation that an owner is in lawful possession of the property.

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