Real Estate, like any field, has it's own language and terms that are used so frequently that we often forget that most people don't know what they mean. So here are the top 5 most common terms that are used by real estate professionals (including your lender) that you must know when buying or selling.
Escrow- this can relate to two things: Primarily it is what the title company does in the transaction. They hold documents and funds in trust until the transaction closes.
Funds held in escrow typically include taxes, insurance, earnest money, etc.
Closing costs-are the expenses that the buyer and seller incur during the transaction. These include mortgage related fees for the buyer, such as origination fees and points, and taxes, transfer fees, title search and title clearing for the seller. Inspections can also be included according to the terms of the contract. Closing costs generally total several thousands of dollars and are often a surprise to buyers and sellers. These costs are provided to buyer and seller at least 3 days before closing.
Closing: often confused with the closing costs, THE closing is the final meeting where the buyer signs their loan documents and seller provides clear title to the property and both parties provide their payment for the transaction. The buyer will bring in their down payment and closing costs and the seller is "charged" their payments against the proceeds of the sale. In some case, the seller may need to provide funds as well.
Title- Title is the right of the owner to transfer and sell property free of claims of others. The word title is also used frequently to mean the title company, title insurance or title search of the title to the property.
Mortgage-a mortgage creates a lien against the property that is held by whoever is lending money for the purchase of the property. There are many different types of mortgages with many different kinds of terms. The interest rates and terms of each differ. Some are assumable and some are not, some have set interest rates and some have adjustable rates. For example, adjustable rate mortgages periodically "adjust" the interest rate on the loan and will change your monthly payment. It is very important to clearly understand the terms and rates of your mortgage, so be sure to discuss with your mortgage professional until you understand your terms thoroughly.
There are many other terms used in real estate transactions, so keep checking our blog for more updates!
Author:David Wedding Phone: 505-331-9760 Dated: April 2nd 2018 Views: 473 About David: ...
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