Glossary

Appraisal – an inspection completed by a 3rd party to determine the value of the home.

APR – Annual Percentage Rate; your interest rate and other fees included in the loan expressed as a percentage.

Closing Costs – costs to procure your home including title fees, appraisal fee, origination fees, interest due and escrow deposits.

Debt-to-income – ratio of your monthly obligations to your monthly income; used to assist in determining loan approval.

Down Payment – a portion of the price of the home, reducing your loan amount.

Due Diligence Deadline – deadline to complete any and all inspections and address any concerns with your Real Estate Agent and the seller.

Earnest Money – a portion of your down payment secured to demonstrate an earnest of good faith until the loan is funded.

Escrow – holding account which disburses insurance and tax payments on your behalf.

Finance and Appraisal Deadline – deadline to complete the appraisal and obtain the conditional underwriting approval.

Home Inspection – completed by 3rd party professional to evaluate the structure of the home.

Homeowner’s Insurance – coverage offered by a 3rd party agency to protect your home; this is a part of your total monthly payment and is disbursed through your escrow.

Interest Rate – the charge for financing your loan expressed as a percentage.

 

Loan Estimate – initial disclosure of your home loan which includes a breakdown of closing costs and your total loan payment.

Loan-to-value – ratio of your loan financed in comparison to the value of your home, as determined by the purchase price or appraised value.

MLS – identifying number for homes listed on the market.

Mortgage Insurance – coverage for the lender to protect against loan default; this is a portion of your total monthly payment.

Processing – loan step in which documents or information is needed to obtain approval.

Property Taxes – annual payment due to the county for homeownership; this is a part of your total monthly payment and is disbursed through your escrow.

Real Estate Purchase Contract – purchase agreement between buyer and seller of real estate property; negotiated by agents.

Settlement – we have up until this date to meet with the title company to sign all the documents and provide any funds necessary to complete the transaction.

Title Company – determines that the property title is clear and provides title insurance; the title company also manages your settlement.

Underwriting – lean step in which your loan application and all supporting documentation is under review.