GLOSSARY CCELERATION CLAUSE Clause in trust deed or mortgage » A giving lender the right to call all sums owed as immediately due and payable upon the borrower’s default. CCEPTANCE The indication of the offeree’s willingness to be » A bound by the terms of the offer. DJUSTABLE RATE MORTGAGE (ARM) Interest rate and » A monthly payments are adjusted periodically during the life of the loan to correspond with changes in the money market.
LOSING COSTS Additional costs other than down payments » C needed to purchase a property. They include points, application fee, one year’s premium for hazard insurance, tax and insurance escrow deposit, city revenue stamps, recording fees and attorney’s fees. LOSING STATEMENT The settlement sheet which is a » C statement of debits and credits for the buyer and seller in summarizing the costs involved when selling property.
GENT One who acts as a negotiator when dealing with third » A parties on behalf of a principal.
ONTRACT An agreement negotiated and entered into by » C two or more parties who exchange mutual promises to perform certain acts in accordance with the wishes of both parties.
MORTIZATION The gradual retirement of a financial » A obligation by making periodic payments on the principal and interest.
» CONVENTIONAL MORTGAGE Any mortgage that is not government insured is considered to be a “conventional” mortgage.
NNUAL PERCENTAGE RATE The nominal interest rate of a » A loan, plus charges for points, loan origination fees, finder’s fees, and insurance. This rate must be stated on loans covered by Regulation Z of the Truth in Lending Law.
OOPERATIVE APARTMENT Each occupant receives an » C undivided interest in the ownership of the apartment and a common interest in all other facilities. This is usually effected by forming a corporation with each owner receiving stock in the corporation equal to his or her investment. The form of ownership is shares/stock in a corporation. The corporation owns the real estate.
PPRAISAL An estimate of a property’s value supported by » A relevant, factual evidence. SSESSMENT Either (1) an estimate by a government assessor » A of the value of property for the purpose of imposing taxes; (2) a fee imposed on property by a governmental authority, usually to pay for improvements such as streets and sewers; or (3) a fee charged by a community association (e.g. , in a subdivision) or an association of co-owners (e.g., in a condominium project) to maintain or repair common areas or property. ALLOON PAYMENT The final installment payment on a note » B greater than the preceding installment payments; any payments larger than average on a note. ILL OF SALE The legal document used to transfer title to » B personal property. ERTIFICATE OF TITLE A certification based on »» C immediately available public records and issued by a title company, or an opinion rendered by an attorney that the seller has good, marketable and/or insurable title to the property.
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C OMMITMENT An agreement to loan a specified amount to a purchaser. OMMON ELEMENTS That part of real property in » C condominium ownership of shared elements, including walls, structural supports, stairwells, swimming pools, etc. ONDOMINIUM A subdivision allowing individual ownership » C of the units themselves and joint ownership of the common elements. ONTINGENCY Any requirements in a contract which must » C be completed before the contract can be considered ready for performance. OOPERATING BROKER A real estate broker, other than the » C listing broker, who represents potential purchaser and participates in the sale.
O-SIGNER One who accepts equal obligation for the » C performance of a contract, note or other act by affixing his or her name to the documents involved. USTOMER (Prospect) The party with whom an agent deals » C on behalf of the principal. The agent is required to treat that person fairly and honestly. » DEED The written instrument which, when properly executed and delivered, conveys title. ISCOUNT POINTS The amount paid by the seller of a » D property which will be FHA insured. OWN PAYMENT A portion of the purchase price for a » D property which is paid by the buyer in cash, as opposed to the portion of the purchase price which is either (1) advanced by a lender, (2) assumed by the buyer under the seller’s existing mortgage, or (3) financed by the seller. UE ON SALE CLAUSE (Alienation Clause) The clause which » D allows the mortgagee the option of calling the mortgage’s unpaid balance immediately due if the mortgagor sells the mortgaged property. ARNEST MONEY A sum of money given to bind an » E agreement or an offer made to show good faith. ASEMENT The right, privilege, or interest of one party in the » E land of another. QUITY The interest one has in real property as an owner » E above all existing indebtedness. SCROW A depository for papers, funds and instructions with » E a third party who is then obligated to carry out all instructions, providing they are in complete agreement. ANNIE MAE The Federal National Mortgage Association » F (FNMA), whose primary function is to buy and sell FHA and VA mortgages in the secondary market for mortgage loans. » FHA LOAN Federal Housing Administration loans are insured by the federal government. Interest rates can be lower than for conventional loans, but the real advantage lies in the low down payment requirement, usually under 5%.
