Econ Vocab CH. 16

mobility

number one advantage to renting, ability to move more quickly and easily than if one owns a home

tenant

anybody who rents the place they live in to live there (kind like having roomates)

landlord

the person who owns the property you have rented

lease

a legal document that defines the conditions of the rental agreement between the tenant and the landlord

security deposit

an amount of money paid to the owner of a property by the tenant to guard any financial loss or damage the tenant might cause (usually equal one or two months' rent

equity

the value of the home less the amount still owed on the money borrowed to purchase it (your worth - what you owe)

Escrow account

an account where money is held in trust until it can be delivered to a designated party

Private mortgage insurance (PMI)

a special policy that protects the lender in case the buyer cannot make payments or cannot make them on time

Mortgage

a long-term loan extended to someone who buys property

Points

extra charges that must be paid by the buyer to the lender in order to get a lower interset rate

Amortization

the repayment schedule

Fixed-rate mortgage

(also known as conventional mortage) a mortage with a fixed interest rate and a fixed schedule of payments

Adjustable rate mortgage (ARM)

(also known as a variable-payment mortage) a mortage with an interest rate that increases or decreases during the life of the loan

Home equity loan

a loan based on the difference between the current market value of a home and the amount the borrower owes on the mortage

Refinance

obtaining a new mortage to replace an existing one

Closing

a meeting of the seller, the buyer, and the lender of funds , or representatives of each party, to complete the transaction

Title insurance

a type of insurance that protects teh buyer if problems with the title are found later

Deed

the official document transferring ownership from seller to buyer

appraisal

an estimate used to determine current value of a property. Your lender WILL do an appraisal to see if you are paying what the property is worth

Complex

is a building or a group of buildings with housing units

Foreclose

a process that begins when a borrower fails to make their mortgage payments. (lender takes back house)

Sublet

lease a property to a subtenant (becoming a "mini landlord")

P&I

principle and interest (also called PITI -> Principle, Interest, Taxes, Insurance)