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