REAL ESTATE

Harriette can assist you with all legal matters related to the purchase or sale of a home, vacation property, commercial property, or land as well as any disputes that may arise in relation to real estate.

Applying for a mortgage means taking a large financial step. You will hear many unfamiliar terms throughout the mortgage process. Becoming familiar with these terms through use of this “dictionary” will help you understand the process of mortgaging your property.

Amortization
means loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

Annual Percentage Rate (APR)
is the cost of credit expressed as an annual rate. It must be calculated by using a formula set by federal law and disclosed to the Borrower to aid in comparing different credit plans. All finance charges imposed by a Lender are included in this calculation and an APR is always higher than the simple interest rate when such finance charges like points, origination fees or mortgage insurance are charged by a Lender.

Appraisal
an estimate of the value of property; made by a qualified professional called an “appraiser”.

Balloon
A mortgage in which the principal and interest that are paid regularly will not result in the complete payment. The final payment of a balloon note.

Closing Costs
usually include and origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The costs of closing are usually about 2% to 4% of the mortgage amount.

Commitment
an agreement, often in writing, between a Lender and a Borrower to loan money at a future date subject to completion of paperwork or compliance with stated conditions.

Construction Loan
a short-term interim loan for financing the cost of construction. The Lender advances funds to the builder at periodic intervals as the work progresses.

Conventional Loan
a mortgage not insured by FHA or guaranteed by the VA or Farmers Home Administration (FmHA).

Credit Report
a report documenting the credit history and current status of a Borrower’s credit standing.

Debt-to-Income-Ratio
the ratio, expressed as a percentage, which results when a Borrower’s monthly payment obligation on long term debts is divided by his/her gross monthly income.

Down Payment
money paid to make up the difference between the purchase price and the mortgage amount. Down payments are usually 25% of the sale price on conventional loans.

Equity
the difference between the fair market value and current indebtedness; also referred to as the Owner’s interest.

Escrow
refers to a neutral third party who carries out the instruction of both you and the Seller to handle all the paperwork of settlement or “closing”. Escrow may also refer to an account held by the Investor into which you would pay money for tax or insurance payments.

Good Faith Estimate
a listing of each service for which the customer will be charged in connection with the real estate loan, and the estimated cost of each.

Gross Monthly Income
the total amount the Borrower earns per month, before any expenses are deducted.

Insurance
a contract under which, for a consideration, one party agrees to indemnify another for a possible loss under specific conditions.

Interest Rate
the percentage rate charged for use of money.

Late Charge
an additional charge that a borrower is required to pay as a penalty for failing to pay an installment when it is due.

Loan-To Value Ratio
the relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage.

Market Value
the highest price that you would pay and lowest price the Seller would accept on a property. Market value may be different form the price a property could actually be sold for at a given time.

Mortgage
to hypothecate as security, real property for the payment of a debt.

Mortgage Note
the obligation to pay the debt.

Prepayment
a privilege in a mortgage permitting the Borrower to make payments in advance of their due date.

Title
a document that gives evidence of an individual’s ownership of property.

Title Insurance
a policy usually issued by a title insurance company, which insures you against errors in the title search. The cost of the policy is usually a fraction of the value of the property and is often borne by the Purchaser and/or Seller.

Title Search
an examination of municipal or county records to determine the legal ownership of property usually performed by a title company.

Areas of Representation

Purchase Or Sale

Vacation Or Commercial

Land

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