Common Terms and Phrases for Home Buyers and Sellers To Know

    Buying or selling a home can be stressful, especially when faced with new terms or phrases that you don’t know! Use this handy glossary of common terms to help:

    ARM – Adjustable-Rate Mortgage: a mortgage loan with a fluctuating interest rate
    APR – Annual Percentage Rate: a yearly interest rate that includes upfront fees and costs paid to acquire the loan.
    Appraisal – An estimate of the market value of a property. Performed by a professional appraiser, the market value is based on the initial purchase price compared with recent sales of a similar property. Usually required by a lender.
    Closing costs – Expenses and fees above and beyond the actual cost of the property associated with the purchase and sale of a home. May include taxes, title insurance, appraisal fees and lender fees.
    Contingency – A condition (home inspection, financing or home appraisal) that must be met before a sale can be completed.
    DTI – Debt-to-Income: A ratio of a borrower’s total recurring monthly debt to their gross monthly income.
    Earnest money deposit – A partial payment or deposit that demonstrates a buyers commitment. This money is held in an escrow account and is used toward closing costs.
    Escrow – a neutral third party that handles the exchange of funds and documents
    Fixed-rate mortgage – A mortgage loan whose interest rate will not change for the duration of the loan
    FSBO – For Sale By Owner: A property sold by the owner, without a real estate agent.
    PITI – Principal, Interest, Taxes & Insurance. These major home ownership costs are often included in monthly mortgage payments.

    Terms to Describe Homes:

    BD or BR – Bedroom
    FFBR – First Floor Bedroom
    BA – Bathroom
    FB – Full Bathroom (toilet, sink & shower and/or bathtub)
    HB – Half Bathroom (only toilet and sink)
    FP – Fireplace
    LR – Living Room
    W/D – Washer/Dryer
    D/W – Dishwasher
    1C, 2C – 1 or 2 car garage
    BLT – Built-in
    FML – Formal
    HOA – Homeowner’s Association
    HVAC – Heating, Ventilation and Air Conditioning

     

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