REAL ESTATE TERMS

A C D E F H P R T Z

	Acceleration Clause	A provision in a trust deed, mortgage loan contract, or land contract giving the lender the right to declare the entire remaining balance due and payable immediately because of a violation of one of the convenants in the contract. Also known as Alienation Clause.

	Acre	A measure of area containing 43,560 square feet.

	Adjustable Rate Mortgage (ARM)	A type of loan where the interest rate is tied to a particular financial index. The interest rate AND the monthly payment can change at predetermined intervals.

	Annual Percentage Rate (APR)	The cost of credit as expressed as a yearly (annual) rate. The APR takes into account the interest rate, points and some loan origination fees paid by the borrower.

	Application Fee	A fee, usually non-refundable, charged by the lender to cover costs of processing your application.

	Appraisal	A written estimate of the current value of your home. The appraisal is prepared by a certified/licensed appraiser by comparing the subject property to similar homes that have sold in the area. Some of the factors that are considered in the appraisal include the location of the property, the style of home, the physical condition of the home and the homes features (i.e. number of bedrooms, baths, fireplaces, etc.) The appraisal is NOT an inspection and should not be relied upon as such.

	Appraiser	The licensed or certified agent who conducts appraisals.

	Assessment	The value placed upon a piece of property by a taxing authority such as a city, county or state government. This value is used to determine the amount of taxes or fees that must be paid by the property owner to the taxing authority.

	Assumption	A transaction whereby a buyer takes over responsiblity for an existing loan. In most cases a buyer will have to qualify for the loan as if it was a new loan.

	Certificate of Occupancy	For a newly constructed home or when extensive remodeling is done the local housing authority or codes department issues a certificate of occupancy. This document "certifies" that the construction was done according to the building codes and that the house is safe and habitable.

	Change Order	A written document used during the construction or remodeling of a home or building. The Property Owner and the Contractor modify the contract by agreeing to alter, add or delete an item.

	Construction Loan	A short term loan taken out by the Builder during the home construction process. This loan provides the Builder with the money necessary to pay the costs incurred during the construction process such as the cost of the lot, building materials, labor, interest, fees, etc.

	Deed	A legal document that transfers right of ownership.

	Deed of Release	A document signed by the lender stating that the mortgage has been paid in full. The deed of release is traditionally filed in the county records.

	DVA	Department of Veteran Affairs, previously referred to as the "VA" (Veterans Affairs)

	Earnest Money	A deposit paid by the buyer, normally at the time the contract is written, to demonstrate "good faith".

	Equity	The difference between the value of a home and the amount of any monies owed on it.

	FHA	Federal Housing Administration.

	Filing Fees	These are fees set by the state and local governments that are assessed against documents recorded in the county records. Some municipalities charge a flat fee. Others charge based on the number of pages in the document recorded.

	Fixed Rate Loan	A loan where the interest rate is fixed (doesn't change) over the life of the loan.

	Homeowner's Policy	An insurance policy that provides for liability coverage and hazard insurance coverage on a home. Review your policy carefully so you understand what coverage it provides. It is important to know what loss limits and exclusions are in your insurance policy. Normally this policy will NOT cover damage or losses due to flooding, earth movement (i.e. earthquakes, landslides, sinkholes, etc.)or damage to trees and shrubbery.

	Homeowner's Warranty	A type of insurance policy that covers repairs to specific parts or items in house for a limited period of time. The Seller or the Buyer can purchase these warranties. These policies will have a deductible much like auto insurance. As with any type of policy carefully review the length of coverage, the list of covered items, exclusions and limitations.

	HUD	U.S. Department of Housing and Urban Development

	PITI	This refers to "Principal-Interest-Taxes-Insurance". Together these costs comprise your monthly payment.

	PMI (Private Mortgage Insurance)	Insurance coverage for the lender that is paid for by the borrower. The PMI insures a certain portion of the loan in the event of default or foresclosure. Usually the smaller the downpayment the higher the PMI fees. This fee can be paid in several ways - as an upfront fee at the time the loan is made, as a part of your monthly payment or as a combination of these two methods.

	Real Estate Taxes	The taxes levied against real property by various levels of goverment.

	RESPA	The Real Estate Settlement Procedures Act. This law requires that the lender provide the borrower with a written good faith estimate as to what the closing costs will be. This must be done within three business days of the loan application.

	Term	The number of years over which your loan is scheduled to be paid off. Terms can vary but 15-year and 30-year terms are the most common.

	Zoning	Laws established by local governments that regulate how high a structure can be, where it can be located on the property and what activities can be conducted on the property and/or in the structure.

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