NEW
HORIZONS FINANCIAL, INC.
NEW
HORIZONS FINANCIAL, INC.
Property Terms
When your lender says ... Appraisal
What they mean is ... The process
of figuring out how much a home is really
worth, given current market conditions.
An appraisal, which is done by a
qualified expert, is an important
part of getting a mortgage; it helps
determine the amount of money a broker
will loan you to buy a house.
When your lender says ... Assessment
What they mean is ... The amount of
property taxes you must pay to the city
or town in which you own your home.
When your lender says ... Assessed Valuation
What they mean is ... The determination,
for tax purposes, of how much a
home and the property it occupies
is worth.
When your lender says ... Closing
What they mean is ... When you actually
become the owner of the property
you're buying. Closing occurs when
you and the seller agree to the terms of
a sales contract, and the full sales
price for the home is paid to the seller.
When your lender says ... Closing Costs
What they mean is ... The fees and
charges a buyer and seller must pay at
the time of closing on a home sale.
These can include, among other things,
broker commissions, lender discount
points, insurance premiums, and
attorney's fees.
When your lender says ... Easement
What they mean is ... The legal rights
the general public has with regard to
using portions of private property.
For instance, if a county road cuts
through privately owned land, a legal
access easement lets the public use
that road without fear of trespassing
on the private property.
When your lender says ... Equity
What they mean is ... How much of
your home you actually own. When you
first buy a home, your ownership
equals your down payment; your mortgage
lender owns the rest. To figure out
your equity, subtract the amount you
owe on your loan from your home's
current market value.
When your lender says ... Fair Market Value
What they mean is ... A term that
refers how much a home or property is
worth, given the current conditions
of the local real estate market. The fair
market value of a home is usually
used in conjunction with the amount of tax
its owner must be charged.
When your lender says ... Flood Insurance
What they mean is ... An insurance
policy that covers damage your home
may receive due to flooding. If the
home you're buying is in an area prone to
flooding, then you may be required
by your home loan provider to get flood
insurance. To establish whether or
not your home is in such an area, a land
survey must be done—at the expense
of the person selling the home—at
least fifteen days before the date
you close on the home purchase.
When your lender says ... Hazard Insurance
What they mean is ... An insurance
policy many lenders require a home
buyer to have to cover damages due
to occurrences like fires or storms.
When your lender says ... Parcel
What they mean is ... A piece of land
or property under one ownership.
Parcels are created when a single
large property is sub-divided into many
smaller pieces of property.
When your lender says ... Reassessment
What they mean is ... The process
of updating the understood value of a
property for tax purposes.
When your lender says ... Site Assessment
What they mean is ... A mandatory
environmental inspection that checks for
the existence of hazardous waste
on the premises of a home that's being
sold.
When your lender says ... Survey
What they mean is ... The process
of measuring a piece of land to establish
its legal boundaries. This is performed
by a trained professional called a
surveyor, and occurs before a home
sale is finalized.
When your lender says ... Zoning
What they mean is ... The way cities
and towns define how areas within their
borders are to be used as real property.
Zoning determines which areas of a
city or town can contain stores and
other businesses, which should be used
as residential areas, and which can
mix both types of property.
Legal Matters
When your lender says ... Chattel
What they mean is ... Property you
own aside from real estate. Chattel
includes furniture, cars, jewelry,
stocks, and any other asset that contributes
to your total financial standing.
When your lender says ... Contract of Sale
What they mean is ... The written
agreement between you, as the buyer, and
the person selling the home. The
contract outlines the terms of your
purchase, including the price of
the home, and must be agreed upon before
closing can occur on the sale.
When your lender says ... Escrow Account
What they mean is ... A bank account
where you deposit money that will be
used to pay charges that come with
your purchase of a house. An escrow
account is sort of a neutral area
between you and your mortgage lender that
stores money you've deposited until
you need it to pay for certain aspects of
your loan, like closing costs, taxes
or insurance fees.
When your lender says ... Executed Sales Contract
What they mean is ... A contract where
all the terms have been successfully
completed by the buyer and the seller.
When your lender says ... Full Disclosure
What they mean is ... A legal requirement
that says a person selling a home
must inform a potential buyer of
everything they know about the home's
physical and economic condition.
When your lender says ... Gift Letter
What they mean is ... The form stating
that a relative is giving you money to
help you buy a home, and that they
will not ask you to it pay back. The
letter also provides proof, by referring
to bank statements and other
records, that the relative does,
in fact, have enough money to cover the
amount of the gift, and that the
money has been transferred to your
possession.
When your lender says ... Note
What they mean is ... The formal,
written acknowledgment that you've
borrowed money from a lender, and
agree to pay it back under the
conditions of the loan.
When your lender says ... Owner of Record
What they mean is ... The actual owner
of a property, according to public
records.
When your lender says ... Pre-payment Clause
What they mean is ... A condition
written into a mortgage that gives a
borrower the privilege of paying
off a loan in full before the final scheduled
payment date. The borrower usually
must agree to pay a pre-determined fee
to do so.
When your lender says ... Pre-payment Penalty
What they mean is ... A fee that you
are charged by the lender when you
pay off the principal of your loan
before the scheduled final payment date.
The penalty is intended to recover
some of the money they would've gotten
from you in the form of interest
payments, had you taken the full term of the
loan to pay it off.
When your lender says ... Public Records
What they mean is ... The documents
that are evidence of real estate
transactions, which are usually stored
at the county courthouse and are
accessible, by law, to the general
public.
When your lender says ... Punch List
What they mean is ... A written inventory
of things that need to be done to a
home in order to meet the requirements
of a sales contract.
When your lender says ... Purchase Capital
What they mean is ... The total amount
of money a person uses to buy a
home, regardless of the source.
When your lender says ... Title
What they mean is ... The legal, written
evidence that identifies the owner of
a home or piece of property, and
outlines that person's rights as owner. At
the time of a home sale, the title
passes from the seller to the buyer and the
lender who is providing the buyer's
home loan. The buyer gets the title when
their home loan is paid back in full.
When your lender says ... Title Insurance
What they mean is ... The insurance
policy you must purchase to protect
yourself and the lender against any
possible problems of the home you're
buying. These problems may include
unresolved legal claims, or an
interruption of the deed transferal
process between previous owners of the
property.
When your lender says ... Title Search
What they mean is ... A legal examination
of public records to identify the
actual owner of a home.