Adjustable Rate Mortgage (ARM).A loan whose interest rate is adjusted according to movements in the financial market.Amortization.A payment plan by which a borrower reduces a debt gradually through monthly payments of principal and interest.Annual Percentage Rate (APR).The annual cost of credit over the life of a loan, including interest, service charges, points, loan fees, mortgage insurance, and other items.Appraisal.An evaluation to determine what a piece of property would sell for in the marketplace.Appreciation.The increase in the value of a property.Assessment.A tax levied on a property or a value placed on the worth of a property by a taxing authority.Assumption.A transaction allowing the buyer of a home to assume responsibility for an existing loan on the home instead of getting a new loan.Balloon.A loan which has a series of monthly payments (often for 5 years or less) with the remaining balance due in a large lump sum payment at the end.Binder.A receipt for a deposit paid to secure the right to purchase a home at terms agreed upon by the buyer and seller.Buy down.A subsidy (usually paid by a builder or developer) to reduce the monthly payments on a mortgage loan.Cap.A limit to the amount an interest rate or a monthly payment can increase for an adjustable rate loan either during an adjustment period or over the life of the loan.Certificate of Occupancy.A document from an official agency stating that the property meets the requirements of local codes, ordinances, and regulations.Closing.A meeting to sign documents which transfer property from a seller to a buyer. (Also called settlement.)Closing Costs.Charges paid at settlement for obtaining a mortgage loan and transferring real estate title.Conditions, Covenants, and Restrictions (CC and R). The standards that define how a property may be used and the protections the developer has made for the benefit of all owners in a subdivision.Condominium. A home in a multi-unit complex; each purchaser owns an individual unit, and all the purchasers jointly own the common areas, such as the surrounding land, hallways, etc.Conventional Loan.A mortgage loan not insured by a government agency (such as FHA or VA).Convertibility.The ability to change a loan from an adjustable rate schedule to a fixed rate schedule.Cooperative.A form of ownership in a multi-unit complex, the purchasers own shares of the entire complex rather than owning individual units.Credit Rating.A report ordered by a lender from a credit bureau to determine if the borrower is a good credit risk.Default.A breach of a mortgage contract (such as not making monthly payments).Density.The number of homes built on a particular acre of land. Allowable densities are usually determined by local jurisdictions.Down payment.The difference between the sales price and the mortgage amount on a home. The down payment is usually paid at closing.Due-on-Sale.A clause in a mortgage contract requiring the borrower to pay the entire outstanding balance upon sale or transfer of the property. A mortgage with a due-on-sale clause is not assumable.Earnest Money. A sum paid to the seller ( usually held by the Selling Office in their non-interest bearing escrow account ) to show that a potential purchaser is serious about buying.Easement.Right-of-way granted to a person or company authorizing access to the owner's land; for example, a utility company may be granted an easement to install pipes or wires. An owner may voluntarily grant an easement, or in some cases, be compelled to grant one by a local jurisdiction.page 1 of 32355 BELMONT CENTER DR. SUITE 104, BELMONT, MI. 49306
Adjustable Rate Mortgage (ARM). A loan whose interest rate is adjusted according to movements in the financial market.
Amortization. A payment plan by which a borrower reduces a debt gradually through monthly payments of principal and
interest.
Annual Percentage Rate (APR). The annual cost of credit over the life of a loan, including interest, service charges, points,
loan fees, mortgage insurance, and other items.
Appraisal. An evaluation to determine what a piece of property would sell for in the marketplace.
Appreciation. The increase in the value of a property.
Assessment. A tax levied on a property or a value placed on the worth of a property by a taxing authority.
Assumption. A transaction allowing the buyer of a home to assume responsibility for an existing loan on the home instead of
getting a new loan.
Balloon. A loan which has a series of monthly payments (often for 5 years or less) with the remaining balance due in a large
lump sum payment at the end.
Binder. A receipt for a deposit paid to secure the right to purchase a home at terms agreed upon by the buyer and seller.
Buy down. A subsidy (usually paid by a builder or developer) to reduce the monthly payments on a mortgage loan.
Cap. A limit to the amount an interest rate or a monthly payment can increase for an adjustable rate loan either during an
adjustment period or over the life of the loan.
Certificate of Occupancy. A document from an official agency stating that the property meets the requirements of local
codes, ordinances, and regulations.
Closing. A meeting to sign documents which transfer property from a seller to a buyer. (Also called settlement.)
Closing Costs. Charges paid at settlement for obtaining a mortgage loan and transferring real estate title.
Conditions, Covenants, and Restrictions (CC and R). The standards that define how a property may be used and the
protections the developer has made for the benefit of all owners in a subdivision.
Condominium. A home in a multi-unit complex; each purchaser owns an individual unit, and all the purchasers jointly own
the common areas, such as the surrounding land, hallways, etc.
Conventional Loan. A mortgage loan not insured by a government agency (such as FHA or VA).
Convertibility. The ability to change a loan from an adjustable rate schedule to a fixed rate schedule.
Cooperative. A form of ownership in a multi-unit complex, the purchasers own shares of the entire complex rather than
owning individual units.
Credit Rating. A report ordered by a lender from a credit bureau to determine if the borrower is a good credit risk.
Default. A breach of a mortgage contract (such as not making monthly payments).
Density. The number of homes built on a particular acre of land. Allowable densities are usually determined by local
jurisdictions.
Down payment. The difference between the sales price and the mortgage amount on a home. The down payment is usually
paid at closing.
Due-on-Sale. A clause in a mortgage contract requiring the borrower to pay the entire outstanding balance upon sale or
transfer of the property. A mortgage with a due-on-sale clause is not assumable.
Earnest Money. A sum paid to the seller ( usually held by the Selling Office in their non-interest bearing escrow account )
to show that a potential purchaser is serious about buying.
Easement. Right-of-way granted to a person or company authorizing access to the owner's land; for example, a utility
company may be granted an easement to install pipes or wires. An owner may voluntarily grant an easement, or in some cases,
be compelled to grant one by a local jurisdiction.
page 1 of 3
2355 BELMONT CENTER DR.
SUITE 104,
BELMONT, MI. 49306
