Terms You Should Know

Buying or selling a home can be confusing enough without a language barrier. We have collected a few terms which you will likely encounter during the process.

Adjustable Rate Loans: Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates.
Agency: Any relationship in which one party (agent) acts for or represents another (principal) under the authority of the latter. Agency involving real property should be listed in writing.
APR (annual percentage rate): The yearly interest percentage of a loan, as expressed by the actual rate of interest paid.
Appraisal: An opinion of value based upon a factual analysis.
Closing Costs: Expenses incidental to a sale of real estate such as loan fees, title fees, appraisal fees, etc.
Conventional Loan: A mortgage or deed not obtained under a government insured program.
Deed: A conveyancing instrument given to pass fee title to property upon sale.
Earnest Money: Money given by the buyer with an offer to purchase which shows good faith.
Escrow Account: Account held by a lender for payment of taxes, insurance or other periodic debts against real property. The mortgagor pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays the tax bill from the accumulated funds.
Homeowner’s Insurance: Includes the coverage of hazard insurance plus added coverage such as personal liability and theft away from the home.
PITI (principal, interest, taxes and insurance): Used to indicate what is included in a monthly payment on real property.
Private Mortgage Insurance (PMI): Insurance against a loss by a lender in the event of default by a borrower. The insurance is similar to insurance by a governmental agency such as FHA, except that it is issued by a private insurance company. The premium is paid by the borrower and is included in the mortgage payment.
Title: The evidence one has of right to possession of land.