ACCELERTION CLAUSE
A condition pertaining to a mortgage which allows the lender to make the entire outstanding balance due and payable immediately. Such a condition could be a default of payment, breach of contract, etc.

ADJUSTABLE RATE MORTGAGE
A mortgage where the interest rate is subject to change periodically.

AGENCY
The legal relationship between a Seller and a Broker/ Agent wherein the Broker/ Agent has been engaged to sell a property OR the relationship between a Buyer and a Broker/ Agent where the Broker/ Agent  has been engaged by the Buyer to act in their sole interest in purchasing a property.

AMORITIZATION
The portion of the mortgage payment which directly reduces the balance of the loan.

ASSESSED VALUE
A county tax assessor’s value placed on the property which is one of the factors in arriving at your annual real estate tax bill (the other factor uis the millage rate).

BALLOON MORTGAGE
A mortgage that has a substantial amount of principle due at a predetermined date.

BLANKET MORTGAGE
A loan that is secured by more than one property.

CLOSING COSTS
Various expenses paid by the Buyer and/ or Seller which directly pertain to the purchase or sale of real estate (i.e. commissions, title insurance, appraisals, inspections, etc).

CONVENTIONAL MORTGAGE
A mortgage that has a fixed rate over the life of the loan.

EARNEST MONEY
A deposit made by the Buyer on a particular property and held by an Escrow Agent.

FHA MORTGAGE
A mortgage insured by the Federal Housing Administration.

FIXED RATE MORTGAGE
Same as a “Conventional Mortgage” described above.

JUMBO MORTGAGE
A mortgage that exceeds the amount of a loan as established by Fannie Mae or Freddie Mac.

LIEN
A legal claim against the property.

LISTING CONTRACT
A legal agreement between a Seller and Broker authorizing the Broker to market the property at a predetermined price for a specific period of time.

MARKET VALUE
The highest price that a ready, willing and able Buyer will pay for a property and the lowest price that a Seller will accept – with neither party being under duress to buy or to sell.

MORTGAGE PAYMENT
A periodic payment made by the borrower to the lender that normally includes interest for the period and a predetermined amount of amortization of the loan.

ORIGINATION FEE
Normally a percentage of the loan. This is a fee charged for services by the mortgage company for handling the application and processing the loan.

PITI
The basic components of a mortgage payment (principle, interest, taxes and insurance).

POINTS
A percentage of the loan amount paid by the Buyer to the lender.

PREPAYMENT PENALTY
A fee paid by the borrower to the lender for the prepayment of the loan before the end of the mortgage period.

PRIVATE MORTGAHE INSURANCE (PMI)
For conventional lons with less than 20% down – this charge purchases insurance from a private company that will protect the lender in the event of default.

REAL ESTATE SETTLEMENT ACT (RESPA)
A Federal; Law that requires lenders to provide borrowers with a written estimate of closing costs.

TITLE INSURANCE
Protection for lenders and Buyers against financial loss resulting  from legal defects in the title of the property.

TITLE SEARCH
research of the title records to ascertain any defects, emcumbrances and ownership history of the property.

VA MORTGAGE
A mortgage for eligible veterans that is guaranteed by the Veterans Administration.