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Abstract |
A summary; an abridgment. Before the use of photostatic copying public records
were kept by abstracts of recorded documents. |
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Abstract of Title |
A compilation of the recorded documents relating to a parcel of land, from
which an attorney may give an option as to the condition of title. Still in use
in some states, but giving way to the use of title insurance. |
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Acre |
A measure, usually of land, equal to 160 sq. rods (43,560 sq. ft.) in any
shape. |
| Action to Quiet Title |
A court action to establish ownership to real property. Although technically
not an action to remove a cloud on a title, the two actions are usually
referred to as "Quiet Title" actions. |
| Adjustable Rate Mortgage(ARM) |
A mortgage where the interest rate is not fixed, but changes during the life of
the loan in line with movements in an index rate. You may also see ARM's
referred to as AML's or VRM's. |
| Agency |
An Agency relationship is one in which one person is empowered to act on behalf
of another, subject to the control and consent of the person being represented. |
| Agent |
The person who is acting on behalf of the principal or client. |
| Agreement of Sale |
In some states it is synonymous with a purchase
agreement. In other states, it is synonymous with a
land contract. |
| Alienation Clause |
A clause calling for a debt under a mortgage or deed of trust to be due in its
entirety upon transfer of ownership of the secured property.
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| Amortize |
To reduce a debt by regular payments of both principal and interest, as opposed
to interest only payment see also Amortization Calculator |
| Amorization Calculator |
Calculates what portion of your monthly payment goes towards principal and what
portion goes towards interest. see also Amortize Check out our amortization calculator |
| Annual Percentage Rate(APR) |
A measure of the cost of credit, expressed as a yearly rate. It includes
interest as well as other charges. Because all lenders follow the same rules to
ensure the accuracy of the annual percentage rate, it provides consumers with a
good basis for comparing the cost of loans, including mortgage plans. |
| Appraised Value |
An option of the value of a property at a given time, based on facts regarding
the location, improvements, etc., of the property and surroundings. |
| Arrears |
Payment made after its due is in arrears. Interest is said to be paid in
arrears since it is paid to the date of payment rather than in advance. |
| Assumability |
When a home is sold, the seller may be able to transfer the mortgage to the new
buyer. This means the mortgage is assumable. Lenders generally require credit
review of the new borrower and may charge a fee for the assumption. Some
mortgages contain a due-on-sale clause, which means that the mortgage may not
be transferable to the new buyer. Instead, the lender may make you pay the
entire balance that is due when you sell the home. Assumability can help you
attract buyers if you sell your home. |
| Assumption of Mortgage |
Agreement by a buyer to assume the liability under an existing note secured by
a mortgage or deed of trust. |
| Balloon Note |
A note calling for periodic payments which are insufficient to fully amortize
the face amount of the note prior to maturity, so that a principal sum known as
a "Balloon" is due at maturity. |
| Balloon Payment |
The final payment of a mortgage which is larger than the regular payment; it
usually extinguishes the debt. |
| Binder |
A report issued by a title insurance company setting forth the condition of
title and setting forth conditions, which, if satisfied, will cause a policy of
title insurance to be issued. |
| Blanket Mortgage |
A mortgage covering more than one property of the mortgage. |
| Bridge Financing |
A form of interim loan, generally made between a short term loan and a long
term loan, when the borrower needs to have more time before taking on long term
financing. |
| British Thermal Unit(B.T.U.) |
Unit of heat required to raise one pound of water one degree Fahrenheit. |
| Buydown |
With a buydown, the seller pays an amount to the lender so that the lender can
give you a lower rate and lower payments, usually for an early period of a
loan. The seller may increase the sales price to cover the cost of the buydown. see also Point |
| Cap |
A limit on how much the interest rate or monthly payment of an ARM can change,
either at each adjustment or during the life of the mortgage. Payment CAP's
don't limit the amount of interest the lender is earning so the may cause
negative amortization. see also Amortize |
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| Certificate of Eligibility |
A certificate obtained by a veteran from a Veteran's Administration office
which states that the veteran is eligible for a V.A. insured loan. |
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| Certificate of Reasonable Value(CRV) | An appraisal of property for the purpose
of insurance by the Veteran's Administration. |
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| Certified Copy |
A true copy, attested to be true by the officer holding the original. |
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| Cestui que trust |
One having an equitable interest in property, legal title being vested in
trustee. |
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| Chain of Title |
The chronological order of conveyancing of a parcel of land, from the original
owner to the present owner. |
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| Chattel |
Personal property. |
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| Closing Statement |
The statement which lists the financial settlement between buyer and seller,
and also the costs each must pay. A separate statement for buyer and seller is
sometimes prepared. |
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| Cloud on Title |
An invalid encumbrance on real property, which if valid, would affect the
rights of the owner. |
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| Co-Maker |
Equally responsible for repayment as the borrower. |
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| Commitment |
A written promise to make or insure a loan for a specified amount and on
specified items. |
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| Comparables |
Properties used as comparisons to determine the value of a specified property. |
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| Condominium |
A structure of two or more units, the interior space of which are individually
owned. |
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| Construction Loan |
Short term financing of real estate construction. Generally followed by the
long term financing called a "take out" loan, issued upon completion of
improvements. A withdrawl of money on a construction loan is called a "draw". |
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| Contingency |
The dependence upon a stated event which must occur before a contract is
binding. For example, you could put your offer to buy a new home that the offer is contingent upon your home selling with in 90 days. |
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| Contract of Sale |
Depending on area of country it may be a Land Contract or a Purchase Agreement. |
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| Closing Cost |
Expenses incurred in the closing of a real estate or mortgage transaction. |
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| Conventional Mortgage |
A loan neither insure by the FHA nor guaranteed by the VA. |
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| Conversion Clause |
A provision in some ARMs that allows you to change the ARM to a fixed-rate loan
at some point during the term. Usually the conversion is allowed at the end of
the first adjustment period. At the time of the conversion, the new fixed rate
is generally set at one of the rate then prevailing for fixed-rate mortgages.
The conversion feature may be available at extra cost. |
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| Cost Plus Contract |
A building contract setting the builder's profit at a set percentage of actual
cost of labor and materials. |
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| Contract Sales Price |
The full purchase price as stated in the contract. |
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| County |
A division within a state, usually encompassing one or more cities or towns. Saint George, Washington, Ivins, Middleton, etc, are all part of Washington County, Utah. |
| Debt | An amount owed to another. |
| Deed | The legal document conveying title to a property |
| Default | Failure to make the mortgage payment within a specified period of time. For first mortgages or first trust deeds, if a payment has still not been made within 30 days of the due date, the loan is considered to be in default. |
| Depreciation | A decline in the value of property; the opposite of appreciation. Depreciation is also an accounting term which shows the declining monetary value of an asset and is used as an expense to reduce taxable income. Since this is not a true expense where money is actually paid, lenders will add back depreciation expense for self-employed borrowers and count it as income |
| Down payment | The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage. |