Sterling Real Estate

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Adjustable rate mortgage: Loans with interest rates that can fluctuate during the term, based on an index to which the interest rate is tied. Amortization table: A chart that breaks out the total annual payment per year, over the entire term. Amortized loan: A loan that is paid off in equal installments during its term. Annual percentage rate: The amount a loan costs, paid yearly and expressed as a rate of costs over the loan itself. Appraisal: An estimate of real estate value. The most important factor in determining its value is comparable neighborhood sales. Arbitration agreement: An agreement between the seller and buyer to insure that an independent arbitrator will decide, out of court, any disputes over the property. Assessments: A city-determined tax on homeowners, used to pay for improvements to the city in which the homeowner lives. Association dues: Payments made by homeowners to pay for the maintenance and management of shared property. Assumable loan: A type of mortgage that allows the buyer to take over the responsibility of the mortgage on the encumbered real estate. Capital gains tax: A tax on the profit obtained from the sale of capital asset. Closing costs: Expenses incurred for the purpose of closing a real estate or mortgage transaction. Examples include attorneys fee, recording charges, survey fee, title policies, lender fees, discount points, appraisal fee, etc. Commitment letter: A letter which your lender may send you stating the terms of the loan and its approval. Conventional loan: Non-government home loan. Contingency: A clause within a purchase agreement that has to be met before the contract can be exercised. Down payment: The initial payment of a home. There are certain minimums of down payments depending on the type of loan. Most down payments are 5 to 30 percent of the loan. Earnest money: Money that accompanies an offer made on a property. The money is then applied to the down payment at closing. If the offer is not accepted, the money is returned. Equity: The difference between indebtedness and market value of a property. Escrow: Funds, many times a bond, held by a third party which will not be released to the grantee until conditions of a contract or an agreement are fulfilled. FHA loan: A Federal Housing Administration loan program that provides a guarantee against default. The borrower may benefit from a smaller down payment. Fair Credit Reporting Act: Information in your credit report that federal law gives citizens the right to challenge. Fixed rate mortgage: Loans with interest rates that do not fluctuate. Homeowner's insurance: Insurance home buyers must have in order to protect the investment of the property. Loan origination fee: A fee for loan application. Loan processing: The lenders opinion of your financial and credit past, combined with your income to calculate your ability to qualify for a loan. Loan to value ratio: This is the ratio of the amount borrowed to the appraised value of the home. Lock-in agreement: This agreement allows you to lock in an interest rate at or anytime up to the closing.

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