Understanding Real Estate Vocabulary

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Understanding Real Estate Vocabulary What is Encumbrance: Understanding Real Estate Vocabulary Encumbrance is a claim on a property. This could take form of a mortgage, an easement (right to the use of/access to land owned by another), or a lien (a claim to the property for payment of a debt). 
Understanding Real Estate Vocabulary What is a Short-Sale: Understanding Real Estate Vocabulary This is a transaction where the lender(s) agree to accept less money for the sale of the home than is still owed by the homeowner on the mortgage. Though a short-sale may be better than a foreclosure for both parties, the homeowner will still experience damage to their credit score and walk away without making […]
Understanding Real Estate Vocabulary What is a Contract-for-Deed: Understanding Real Estate Vocabulary This is a special type of real estate contract where the seller of the home acts as the loan lender too, providing funds for the buyer to purchase the property at the agreed price and repay it in installments. This can be a more common financing option for property transactions between family members and friends. 
Understanding Real Estate Vocabulary What is Underwriting: Understanding Real Estate Vocabulary This is the process that involves evaluating the property, the borrowers credit, and their ability to pay the mortgage. Simply put, it is the process used to determine loan eligibility and approval.   Underwriting guidelines vary loan program to loan program. The borrow and property will need to meet certain guidelines that go along with […]
Understanding Real Estate Vocabulary What is Arbitration: Understanding Real Estate Vocabulary Simply put, arbitration is the process that has to do with the arbitrator. The arbitrator is a neutral and fair third party person with whom the buyer and seller agree in advance to abide by. When a dispute occurs that the two parties cannot resolve on their own, the arbitrator makes the decision. Arbitration is […]
Understanding Real Estate Vocabulary What are Closing Costs: Understanding Real Estate Vocabulary Closing in itself is the completion of a financial transaction, in this case, buying a home. Closing costs are different because it refers more specifically to upfront fees that are charged in connection with the closing the mortgage loan. These are fees paid by the buyer, but in few cases the seller may also have […]
Understanding Real Estate Vocabulary What is Escrow: Understanding Real Estate Vocabulary “Escrow” is something of great significance, like an item of value, money, or important documents. The item of significance is given to a third party for safe keeping until certain conditions have been met and the item can be delivered to the receiving party. For example,  The context in which the term escrow is used […]
Understanding Real Estate Vocabulary What is Refinancing: Understanding Real Estate Vocabulary While refinancing is a term that can be applied to many types of loans, in real estate it generally refers to the mortgage loan. There are many options for refinancing, but the new plan must be approved by the lender.  Refinancing is a process the homeowner (borrower) may choose to go through to change the interest rate […]
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Understanding Real Estate Vocabulary What is Equity: Understanding Real Estate Vocabulary Equity is the share of your home that you “own” (have paid off) versus what you still owe on your mortgage (and any other liens you might have). For example, if your home is worth $330,000 and you have a remaining mortgage balance of $280,000, your home equity would be $50,000. Your equity will increase […]
Understanding Real Estate Vocabulary What is Earnest Money: Understanding Real Estate Vocabulary This is like making a down payment. An earnest money deposit shows that you are committed to buying that house. It is deposited within a few days of your offer being accepted. The earnest money is typically credited back to the buyer at closing. If the transaction doesn’t close, the earnest money may refunded to […]
Understanding Real Estate Vocabulary What is a Mortgage: Understanding Real Estate Vocabulary While you may be thinking, I know what a mortgage is, this is a silly term to be included, it’s probably one of the most used words in real estate so it’s good to revisit and burn into your brain. A mortgage is a loan agreement between a lender and the home buyer (you), that lets you borrow money […]

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