Helpful real estate terms

When you’re moving into the real estate market, you’ll be moving into a market that has a language all its own.  Ellie and I believe that while your Realtor should be clear on all the jargon so as to be able to lead you through the process, you should be at least familiar with the language.

Here is a selection of real estate terms that you have probably heard but may not know the meanings of.

• Adjustment date  This is the date on which adjustable-rate mortgage interest rates change.
• Amortization  The process by which a loan is paid off:  the interest part of a loan, as time passes, decreases as the balance of the loan decreases.  As this happens, more of each payment can be applied to principal.
• Assessed value  What the public tax assessor believes a home is worth for purposes of taxation.  A different dollar amount, usually, from “appraised value,” which is the value an appraiser puts on a home based the appraiser’s analysis of multiple aspects of the property.
• Assignment  An assignment, in real estate vernacular, is when there is a transfer of ownership of a mortgage from one company to another or from one individual to another.
• Balloon mortgage  This is the kind of mortgage that calls for the entire remaining balance to be paid at a pre-determined future time.
• Cap  Most commonly, the ceiling beyond which adjustable-rate mortgage interest rates cannot rise above.
• Chain of title This is a tracking of the changes of title to a piece of property over some specified amount of time.
• Closing costs  There are two types:” non-recurring” and “pre-paid items.”  Non-recurring closing costs are simply the costs associated with the closing of the sale.  Pre-paid items are costs that recur, such as homeowners insurance and taxes on the property itself.
• Common area assessments  Planned unit developments, such as gated communities, as well as many condo properties are managed by a homeowners association.  Common area assessments in these cases refer to fees residents pay the association for it to maintain the community.
• Conventional mortgage  These are loans that aren’t made through the Veteran’s Administration or the Federal Housing Administration.

In coming weeks, we might post more terms for you to get familiar with.

It’s similar to the way it is with law and medicine: real estate is a complex field, and there are loads of specific terms and words that have unique meanings.  A good Realtor will always be able to explain term meanings to you – and a good buyer or seller will be at least somewhat familiar with many of them before ever starting a deal.

Knowledge is power.  The real estate industry can be confusing.

Nick & Ellie Glidewell