Real Estate Terminology
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Closing. In real estate sales, the final procedure in which
documents are executed and/or recorded, and the sale or loan is completed.
Closing Costs. Indirect costs incurred as a result
of a real estate sales transaction such as title, appraisal and loan fees and, in some states, real estate transfer taxes.
Cloud on Title. An invalid encumbrance on real property
which, if valid, would affect the ownership rights of the owner.
Conventional Loan. A loan not secured by a
government insured agency such as FHA. or VA.
Consolidation Loan. The process of refinancing a home loan
for the purpose of including other personal debt such as credit card debt and student loans to
consolidate bills and reduce monthly payments.
Defective Title. Title to real property which lacks
some of the elements necessary to transfer good title.
Documentary Tax Stamps. Stamps, similar to postage stamps
affixed to a deed showing the amount of tax paid.
Down Payment. Cash portion of the payment paid
from the Buyer's funds as opposed to the portion which is financed.
Eminent Domain. A governmental body with right to
acquire property for public use by condemnation and the payment of just compensation.
Encroachment. Generally, construction onto the property
of another, as of a wall, fence, building. etc.
Encumbrance. A claim, lien,
charge, or liability attached to and binding real property.
Exclusive Agency Listing.. A listing or
agreement protecting the listing broker's commission against the sale of the property by another
agent but not against the sale by the principal.
Federal Discount Rate. The interest rate charged to member banks borrowing from the federal
reserve board.
Fee Simple. An estate under which the owner
is entitled to unrestricted powers to dispose of the property and which can be left by will or inheritance.
Mortgagee. A lender who holds a mortgage on a
specific property as security for the money loaned to the borrower.
Mortgage Insurance Premiums. Fees paid by
FHA borrowers to obtain a loan.
Mortgagor. A borrower who gives a mortgage on property
in order to obtain a loan from a lender.
Negative Amortization. A financing arrangement
where monthly mortgage payments are less that that required to pay both interest and principal. The
unpaid balance is added to the loan balance.
Real Estate Terminology
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