Coldwell Banker Gundaker Home Buyers Guidebook - 2017 - Page 23

GLOSSARY OF REAL ESTATE TERMS Understanding the Language Due-On-Sale Clause A clause that requires a full payment of a mortgage or deed of trust when the secured property changes ownership. Finance Charge The total cost a borrower must pay, directly or indirectly, to obtain credit according to Regulation Z. Earnest Money The portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith. Fixed Rate Mortgage A conventional loan with a single interest rate for the life of the loan. Escrow A procedure in which a third party acts as a stakeholder for both the buyer and the seller, carrying out both parties’ instructions and assuming responsibility for handling all of the paperwork and distribution funds. Equity The difference between what is owed and what the property could be sold for. FHA Loan A loan insured by the Federal Housing Administration (of the Department of Housing and Urban Development). Federal Home Loan Mortgage Corporation (FHLMC) Called “Freddie Mac”; a part of the secondary market, particularly used to purchase loans from savings and loan lenders within the Federal Home Loan Bank Board. Federal National Mortgage Association (FNMA) Popularly known as “Fannie Mae”; a privately owned corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by the FHA or guaranteed by the VA, as well as conventional home mortgages. Fee Simple An estate in which the owner has unrestricted power to dispose of the property as he wishes, including leaving by will or inheritance. It is the greatest interest a person can have in real estate. Fully Indexed Rate The maximum interest rate on an ARM that can be reached at the first adjustment. Gift Letter A letter from a relative stating that an amount will be gifted to the buyer, and that said amount is not to be repaid. Government National Mortgage Association (GNMA) Called “Ginnie Mae”; a government part of the secondary market that deals primarily in recycling VA and FHA mortgages, particularly those that are highly leveraged. Graduated Payment Mortgage A residential mortgage with monthly payments that start at a low level and increase at a predetermined rate. GRI Graduate, Realtors Institute. A professional designation granted to a member of the National Association of Realtors who has successfully completed courses covering Law, Finance and Principles of Real Estate. HOAs Homeowners’ associations are formal legal entities created in many single- family subdivisions and condominium/ FvRfFWfVVG2FF6&V2BVf&6RFP6fVG26FF2b&W7G&7F2`FR6VGआR7V7F&W'@VƖfVB7V7F.( 2&W'B&W'G( 2fW&6FFFR&W'@W7Vǒ6VFW2WfVFb&FFP7G'V7GW&RBV6677FV2आRv'&G&FV7Fv7BfW&RbV6677FV2vFFR&W'GW7Vǐ6VFW2V&rVV7G&6VFp77FV2B7FVBƖ6W2खFWV7W&RbFW&W7B&FR6vW0W6VBFFWFW&֖R6vW2$( 0FW&W7B&FRfW"FRFW&bFRखFFW&W7B&FPFRG&GV7F'FW&W7B&FR6v2FBFW&R&R&FPFW7FVG2FW"FRदBFV7WVVFfFVBvW'6b&W'G'Gv"&RW'62WFRFVFbvW"FR7W'ff'2FPFRFV6VFVN( 2FW&W7BFR&W'GधV&0'FvvR2FBW6VVBFRVG266WF&Rf"6RFP6V6F'&WCFW6RV&2W7@&R6vVBB6BFffW&VFǒFfW7F'2BFW&Vf&RfR6W&FPVFW'w&FrwVFVƖW2ƖVVvB"6&W'G06V7W&Gf"FV'B"6&vR6֗FV@w&GFV&֗6RFRf"7V6fVBVB7V6fVBFW&2FfVR&FFR&VF6&WGvVVFRVB`FR'FvvRBFR&6VBfVR`FR&W'GW&W76VB2W&6VFvPbFR&6VBfVRW7FFPFRW7FFRf&2&V6VfVB'FP67VW"vFF&VRF2bǖpf"'FvvRB6VFW2WfW'FpFWVVBFr&WBFRFWƖVBf"W7FFVBFW&W7B&FRFǒVB66r67G2WF2*#r%B֗76W&2&vG2&W6W'fVB6GvV&W"wVFW"gVǒ7W'G2FR&6W2bFRf"W6r7BBFRWV'GVG7BW&FVB'7V'6F'b%B26GvV&W"BFR6GvV&W"v&R&Vv7FW&VB6W'f6R&2vVB'6GvV&W"&VW7FFR2&VW7FFRvVG2ffƖFVBvF6GvV&W"wVFW"&RFWVFVB6G&7F"6W2766FW2B&RBVVW2b6GvV&W"wVFW"#