Real estate can be a complicated process and years may pass between times people buy and sell. Are there terms agents and mortgage brokers use that you are unfamiliar with? It’s possible. Here are a few real estate terms and their explanations. Data from Fannie Mae and Realtor.org
Acceleration clause: This relates to a home mortgage loan and gives the lender the right to demand full payment of the loan if a payment is missed. Ask your Loan officer and read your paperwork carefully to be sure you understand the terms of your loan.
Additional Principal: This refers to an additional payment made by the borrower specifically to the principal amount of the loan in an attempt to pay off the balance early. For example, you could round up that $1750/month mortgage payment up to $1800 or more and apply the extra money to pay down the amount owed more quickly.
Appraiser: A person hired by mortgage lenders to protect their investment in lending money. An Appraiser estimates the value of real estate.
Assessor: An Assessor estimates the value of property for purposes of taxation.
Closing: This is a meeting where buyer finalizes the purchase of the property, signs mortgage documents, pays closing costs, provides proof of homeowners insurance and gets possession of the property. Move in time!
Easement: An easement is a right of way given to someone other than the owner to access to the property. For example, a portion of a property may have an easement for a neighboring property owner to cross the land to have water access.
Contingency: A contingency is a condition that must be met before a contract can become binding or enforceable. An example of a common contingency in home buying is making the offer to purchase contingent on a satisfactory home inspection. If a satisfactory home inspection is not obtained, the contingency is not met and the contract is not binding.
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