House Buying Vocabulary

appraisal

an expert estimate of the value of something

valuation

the monetary worth of something, especially as estimated by an appraiser; definitive

appreciation

the rise in value of an asset, such as currency or real estate

foreclosure

the action of taking possession of a mortgaged property when the mortgagor fails to keep up their mortgage payments

short sale

being short in an asset means investing in such a way that the investor will profit if the value of the asset falls

equity

the value of the shares issued by a company

home equity loan

type of loan that enables you to use the equity you've built in your home as collateral to borrow money

fixed rate mortgage

a mortgage loan where the interest rate on the note remains the same through the term of the loan, as opposed to loans where the interest rate may adjust

adjustable rate mortgage

a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets

credit score

a numerical rating representing the perceived ability of a person or organization to fulfill their financial commitments, based on an analysis of their credit history and current financial circumstances

market value

how much an asset or a company is worth on the financial market, according to market participants

interest rate

the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding

balloon payment

a repayment of the outstanding principal sum made at the end of a loan period, interest only having been paid hitherto

deed

a legal document that is signed and delivered, especially one regarding the ownership of property or legal rights

mortgage

a legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt

quitclaim deed

a formal renunciation of a legal claim against some other person, or of a right to land

amortization

the action or process of gradually writing off the initial cost of an asset

closing costs

the expenses over and above the property's price that buyers and sellers usually incur to complete a real estate transaction

points

any upfront fee that is calculated as a percentage of your loan amount

earnest money

put down before closing on a house to show you're serious about purchasing

covenants

an agreement between two or more parties regarding certain use of a piece of real property

hazard insurance

coverage that protects a property owner against damage caused by fires, severe storms, hail/sleet, or other natural event

flood insurance

covers losses directly caused by flooding

lien

a right to keep possession of property belonging to another person until a debt owed by that person is discharged

PMI

purchasing managers' indexes are economic indicators derived from monthly surveys of private sector companies

survey

examine and record the area and features of (an area of land) so as to construct a map, plan, or description

title

the legal right to use and modify the property how you see fit, or transfer interest or any portion that you own to others via a deed

zoning

divide into or assign to zones