Do You Understand the Home Search Lingo?
What does 4B/2B mean?
4B/2B refers to the number of bedrooms and bathrooms in a listing. The first (4B) being the number of bedrooms and the last (2B) being the number of bathrooms. This term can be modified to the number of bed/baths in any home. For example, if there is a home with 5 bedrooms and 4 bathrooms, you would call it a 5B/4B
What is an Annual Percentage Rate (APR)?
An APR (Annual Percentage Rate) is the yearly cost of a mortgage including interest and other expenses such as Private Mortgage Insurance (PMI) and points expressed as a percentage.
What is an Appraisal?
An appraisal is a written estimate of a property’s current market value.
What does By-Laws mean?
By-laws are the rules by which the cooperative corporation or condominium operates, including those regulating elections, officers, and authorizations.
What is the Certificate of Occupancy (C of O)?
The Certificate of Occupancy (C of O) is a certificate issued by a local governmental entity that a structure complies with the codes, ordinances and regulations of that governmental entity and that they may be occupied
What are Closing Costs?
Closing costs refer the entire package of miscellaneous expenses paid by the buyer and the seller when the real estate deal closes. These costs include the brokerage commission, mortgage-related fees, escrow or attorney’s settlement charges, transfer taxes, recording fees, title insurance and so on. Closing costs are generally paid through escrow.
What is a CMA (Competitive market analysis)?
A CMA (Competitive market analysis) is a report that shows prices of homes that are comparable to a subject home and that were recently sold, are currently on the market or were on the market, but not sold within the listing period.
What is a Comparable: (also referred to as “COMPS”)?
A comparable (COMPS) are properties that are substantially equivalent to a subject property; usually in an appraisal.
What is a Contingency?
A contingency is a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met.
What does Earnest Money mean?
Earnest money refers to when a deposit is made by a buyer toward the down payment to show good faith when the purchase agreement is signed.
What is an FHA Loan?
An FHA Loan is a fixed- or adjustable-rate loan insured by the Federal Housing Administration. FHA loans are designed to make housing more affordable, particularly for first-time home buyers.
What is a Fixed-Rate Mortgage?
A fixed-rate mortgage is a mortgage with an interest rate and a payment that don’t change over the term of the loan. Should the current market interest rate fall below your fixed rate, contact your mortgage expert right away to discuss the benefits of refinancing.
What is a Good Faith Estimate?
A good faith estimate is a written estimate of the closing costs the borrower will likely have to pay to obtain the loan. Will be phased out as of August 1st, 2015 in favor of the (allegedly) easier to understand “LOAN DISCLOSURE” document.
What is a Listing?
A listing is a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met.
What is a Lock Box?
A lock box is a locked key-holding device affixed to a for-sale home so real estate professionals can gain entry into the home after obtaining permission from the listing agent.
What does Lock or Lock-In mean?
Lock or lock-in is a lender’s guarantee of an interest rate for a set period of time. The lock-in protects you against rate increases during that time.
What does Pre-Approval mean?
Pre-approval is when we break the most important part of the entire purchase process down in detail.
What is Private Mortgage Insurance (PMI)?
Private Mortgage Insurance (PMI) is insurance to protect the lender in case the borrower defaults on the loan. With conventional loans, PMI is typically not required with a down payment of 20% or more of the home’s purchase price.
What is a Title Search?
A title search is an examination of municipal records to ensure that the seller is the legal owner of a property and that there are no liens or other claims against the property.
What is Repair Escrow?
Repair escrow is monies held in escrow to complete basic repairs that are required for full loan approval. Sometimes added by the appraiser and also as part of the inspection process.
What is a Short Sale?
A short sale is a process that is often used by homeowners who are trying to avoid getting caught up in a foreclosure.
Short sales are an option homeowners use when the bank, credit union or other types of lenders they have borrowed from provides them with the option of selling their home to a third party at a price that is much lower than what they actually still owe on the note of their home loan.
Amazon.com Best-selling author, Shashank Shekhar (NMLS 8176) is a mortgage lender with Arcus Lending, offering loans for home purchase and refinance. Shashank has been featured as a mortgage expert on Yahoo! News, ABC, CBS, NBC and FOX. He has been named "Top 40 under 40" most influential mortgage professionals in the country.
