Easement: A right to use all or part of the land owned by another for a specific purpose. For example, an easement may entitle the holder to install and maintained sewer or utility lines. Encumbrance : Anything that affects or limits the ownership of real property, such as mortgages, liens, easements or restrictions of any kind. Escrow : A procedure in which a third-party acts as a stakeholder for both the buyer and the seller, carrying out both parties instructions and assuming responsibility for handling all of the paperwork and distribution of funds. An escrow fee, typically paid by the buyer, is charged by the title company to service the transaction and to escrow money and documents.
Equity : The difference between what is owed on the amount for which the property could be sold.
Fee simple : An estate in which the owner has unrestricted power do dispose of the property as he or she wishes, including leaving by will or inheritance.
Fixed rate mortgage : A conventional loan with the same interest rate for the life of the loan.
Fixtures : Personal property that is attached to real property and is legally treated as a real property while it is attached. Such as light fixtures, window treatments and medicine cabinet.
Gift letter : A letter from a relative stating that an amount will be gifted to the buyer and that said amount is not to be repaid.
Graduated payment mortgage : A residential mortgage with monthly payments that starts at a low level and increase at a predetermined rate. Home warranty plan : Protection against failure of mechanical systems within the property and usually includes plumbing, electrical, heating and cooling systems and installed appliances.
Initial rate interest : The introductory interest rate on a loan, which signals that there may be right adjustments later on in the loan.
List to sale ratio : The ratio between the price at which a property is listed and the amount for which it is actually sold.
Loan commitment : A written promise to make a loan for a specified amount on specific terms.
Loan to value ratio : The relationship between the amount of the mortgage and the appraised value of the property, typically expressed as a percentage of the appraised value.
Mortgage insurance premium : The mortgage insurance required on FHA loans for the life of said loan. The MIP is either paid in cash at the time of closing or finance over the course as a line.
Multiple listing service : The pooling in a central bureau of all properties for sale. The listings are held individually by members of a group of real estate brokers, with the agreement that any member of the group may sell the properties in the commission will be divided between the broker that sold the property in the broker who filed the listing. Pre-Approval : When a borrower has completed a loan application and provided debt, income and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is made, as well as estimates for the loan that will be paid for property taxes, insurance is others.
Repayment penalty or clause : A fee charged to a borrower who pays a loan in full before the stated due date.
Title: The rights of ownership recognized and protected by law. It is a combination of all elements that constitute the highest legal right to own, possess, use, control, enjoy, transfer and dispose of.
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