Adjustable Rate Mortgage (ARM) (Investopedia): A mortgage with an interest rate that changes periodically based on a benchmark index.
Amortization (Investopedia): The process of repaying a loan over time through scheduled payments of principal and interest.
Appraisal (NAR): An expert estimate of a property’s market value, typically required by lenders before approving a mortgage.
Assessed Value (HUD): The dollar value assigned to a property for tax purposes by a public tax assessor.
Buyer’s Agent (NAR): A real estate professional who represents the interests of the buyer in a transaction.
Closing Costs (Investopedia): Fees and expenses, over and above the price of the property, paid at the closing of a real estate transaction.
Comparative Market Analysis (CMA) (NAR): An evaluation of similar, recently sold homes that is used to help determine a property’s value.
Contingency (NAR): A condition that must be met for a real estate contract to become binding.
Conventional Loan (Investopedia): A home loan that is not insured or guaranteed by the federal government.
Deed (Investopedia): A legal document that transfers property ownership from one party to another.
Down Payment (HUD): The upfront cash payment made by a buyer toward the purchase price of a home.
Earnest Money (Investopedia): A deposit made to demonstrate the buyer’s serious intent to purchase a property.
Escrow (NAR): A financial arrangement where a third party holds funds until all conditions of a real estate transaction are met.
Equity (Investopedia): The difference between the market value of a property and the amount owed on its mortgage.
Fair Housing Act (HUD): Federal law prohibiting discrimination in housing based on race, color, religion, sex, or national origin.
Fixed Rate Mortgage (Investopedia): A mortgage with an interest rate that stays the same for the life of the loan.
Foreclosure (HUD): The legal process by which a lender takes control of a property after the borrower fails to make mortgage payments.
Home Inspection (NAR): An examination of a property’s condition, usually conducted before closing.
Homeowners Association (HOA) (Investopedia): An organization that manages and enforces rules for a residential community.
Homeowner’s Insurance (Investopedia): A policy that protects homeowners from financial loss due to damage or liability.
HUD Home (HUD Homes USA): A residential property acquired by the U.S. Department of Housing and Urban Development (HUD) after a foreclosure on an FHA-insured mortgage.
Interest Rate (Investopedia): The cost of borrowing money, expressed as a percentage of the loan amount.
Listing Agreement (NAR): A contract between a property owner and a real estate broker authorizing the broker to sell the property.
Loan-to-Value Ratio (LTV) (Investopedia): A ratio comparing the amount of a loan to the value of the property purchased.
Mortgage Insurance (HUD): Insurance that protects the lender in case the borrower defaults on the mortgage.
Multiple Listing Service (MLS) (NAR): A database used by real estate agents to share information about properties for sale.
Offer (NAR): A formal proposal to buy a property at specific terms and conditions.
Origination Fee (Investopedia): A fee charged by a lender for processing a new loan application.
Pending (NAR): A status indicating that an offer has been accepted but the sale is not yet complete.
Pre-Approval (NAR): A lender’s written commitment to provide a mortgage up to a specified amount, subject to certain conditions.
Principal (Investopedia): The original amount of money borrowed for a mortgage, excluding interest.
Private Mortgage Insurance (PMI) (Investopedia): Insurance required by lenders when the down payment is less than 20% of the home’s value.
Property Tax (Investopedia): Taxes paid by property owners, usually based on the assessed value of the property.
Purchase Agreement (NAR): A legal contract outlining the terms and conditions of a real estate sale.
Refinance (Investopedia): The process of replacing an existing mortgage with a new loan, usually to obtain a better interest rate or terms.
Seller’s Agent (NAR): A real estate professional who represents the interests of the seller in a transaction.
Short Sale (HUD): A sale of real estate in which the proceeds are less than the amount owed on the mortgage.
Title (Investopedia): Legal ownership of a property.
Title Insurance (Investopedia): Insurance that protects against losses from disputes over property ownership.
Underwriting (Investopedia): The process by which a lender evaluates the risk of providing a loan to a borrower.
VA Loan (HUD: A mortgage loan guaranteed by the U.S. Department of Veterans Affairs for eligible veterans and service members.
Walk-Through (NAR): A final inspection of a property before closing to ensure it is in agreed-upon condition.
Zoning (Investopedia): Local government regulations that dictate how a property can be used or developed.
Escalation Clause (NAR): A provision in an offer that allows a buyer to increase their offer if competing bids are received.
FHA Loan (HUD): A mortgage insured by the Federal Housing Administration, designed to help lower-income borrowers purchase homes.
Dual Agency (NAR): When one agent or broker represents both the buyer and the seller in a transaction.
Commission (Investopedia): The fee paid to a real estate agent or broker for their services, usually a percentage of the sale price.
Covenants, Conditions & Restrictions (CC&Rs) (Investopedia): Rules and guidelines governing the use of property in a subdivision or community.
Escrow Account (Investopedia): An account where funds are held in trust while two or more parties complete a transaction.
Real Estate Settlement Procedures Act (RESPA) (HUD): A federal law that requires lenders to disclose certain information to borrowers during the real estate settlement process.