![]() The CMA accounts for style, size, location and other factors that make the homes comparable.Ĭontingency – A contingency is a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. ![]() A CMA may be prepared for a buyer or a seller to determine market value. A CMA compares the prices of homes sold, homes currently on the market and homes pending to a subject property. These costs can include real estate commission, mortgage fees, attorney fees, transfer taxes, recording fees, and title insurance.ĬMA –CMA is short for comparative market analysis or competitive market analysis. Here are a few real estate terms decoded.Īssessed Value – Assessed Value is the valuation placed on property by a public tax assessor for purposes of taxation.Ĭlosing Costs –Closing costs are all of the miscellaneous expenses paid by the buyer and the seller when a real estate transaction closes. Visit the FCB Homes website to learn more about our neighborhoods and move-in ready homes.Buying or selling a home can be complicated enough but add in the lingo and you may feel like you are listening to a foreign language. Hopefully this primer will help give you the confidence you need as you navigate this market with a trusted real estate agent who can explain all the other terms you’ll hear. This is just a partial list of all the real estate terms you’ll encounter during your home buying process. Lenders typically require PMI for buyers who have less than a 20% down payment. Private Mortgage Insurance: an insurance policy that protects the lender in case the borrower defaults on the loan. Principal: the amount actually borrowed from the lender. Pre-Qualify (prequalified): prepublication is an informal process of determining the estimated loan amount a homebuyer may qualify for. This commitment is valid if there are no changes in the borrower’s qualifications. ![]() Borrowers will know the maximum amount they can borrow from a lender. Pre-Approval (preapproved): often confused with prequalification, pre-approval is a more formal process of applying for a loan. Meaning, aside from changes in property taxes and insurance, mortgage payments will roughly stay the same. Fixed-rate mortgages are set at the prevailing interest rate for the life of the loan. Lenders may require homeowners to use an escrow account for the payment of taxes and insurance.įixed-Rate Mortgage: this is a more traditional mortgage than an ARM. During the buying process, escrow can refer to the holding of cash and documents until a sale is finalized and closed. The remaining balance of the purchase price is covered with the mortgage amount.Įscrow: a neutral third-party account that serves two purposes. and are about 2-5% of the purchase price.Ĭlosing: also known as settlement, this is the legal sell and transfer of the property from the seller to the buyer.ĭown Payment: the initial cash payment that is a percentage of the home’s purchase price (usually between 3.5% – 20%). Typically included are: lender’s fees, transfer taxes, prorated property taxes, origination feed, etc. Lenders use a property’s appraised value to determine the limit they will lend.Ĭlosing Costs: various fees and taxes incurred at closing that isn’t typically covered by a loan. APR includes the interest rate provided by your mortgage lender plus other fees and costs associated with the loan this is why APR is usually higher than the interest rate.Īppraisal: an estimated property value made by a professional based upon the condition of the home, its initial purchase price and comparable recent sales. An ARM is not the best option i you prefer a more consistent mortgage payment.Īnnual Percentage Rate (APR): the true cost of your mortgage. Most ARMs begin with a low interest rate for a set period of time before becoming adjustable based on a fully indexed interest rate. Here’s a quick overview of some of the important real estate terms you’ll hear why buying your new home.Īdjustable Rate Mortgage (ARM): a mortgage loan where your interest rate changes over time. Purchasing a home is an exciting milestone but it’s easy to become overwhelmed when it feels like people are speaking a completely different language.
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