Sometimes, real estate transactions can be confusing and the language and terms can make the process difficult. Erase those questions by being “in the know” with common terms. We’re going through the alphabet, so check out these terms from M-R.
An analysis performed to determine the current value of a property based on recently sold comparable properties, comparable properties that are currently for sale, and the current overall market conditions.
A legal document that pledges property to a creditor for the repayment of the loan, and is the term used to describe the loan itself.
A contingency in the offer to purchase and/or the purchase and sale agreement which protects the buyers in case they are unable to get a mortgage commitment by a date specified in the contract. In this case, the buyers would be able to cancel the contract to purchase and receive back all deposits made.
MLS / Multiple Listing Service
A service provided to real estate agents that lists homes under a seller’s representation agreement and may be available for sale. A computerized database of all homes listed by real estate agents.
When monthly payments are not enough to cover interest costs, they are added to the principal balance, and you may end up owing more than when you started. This is most likely to occur with ARMs that have payment caps.
One who is authorized by the federal or local government to attest authentic signatures and administer oaths.
A written instrument acknowledging a debt and promising payment.
An offer has been accepted, a contract has been executed and the contingencies have been met.
A one-time fee paid to a lender equal to 1 percent of the loan amount to reduce the interest rate.
A buyer completes an application, pays a fee and supplies the necessary documentation to the lender who performs an extensive financial background check. The lender will issue a conditional commitment in writing for an exact loan amount. Preapproval does not guarantee a loan.
An informal estimate of how much a buyer can afford to borrow for a mortgage. It does not include an analysis of a buyer’s credit report or an in-depth look at his ability to purchase a home.
Principal, Interest, Taxes, and Insurance. The major homeownership costs included in many monthly mortgage payments.
Private Mortgage Insurance. Insurance that protects a lender against loss if a borrower defaults on a loan. PMI is required for conventional loans that have less than a 20 percent down payment.
Entering the deed (owner’s title) in public records to protect against subsequent claimants.
A mutual contractual agreement between the agency and the client committing services and fiduciary duties to the client.
A real estate broker holding membership in a real estate board affiliated with the National Association Of Realtors.
The process of the same mortgagor paying off one loan with the proceeds from another loan.
Read previous blogs for more terms, and stay tuned for even more!
If you'd like to get more information on South Florida real estate opportunities from Palm Beach to Jupiter Island, contact Tauber Real Estate Services.