Understanding Real Estate Talk
When working with a real estate agent there is vocabulary that they use that can be a bit confusing to the rest of us. Knowing some of these words and their meaning can make it much easier to work with a real estate agent. There are many words and phrases that real estate agents use that we just do not understand.
One of those phrases is Annual Percentage Rate also known as APR. This is the cost of a loan or other financing as an annual rate. The APR includes many different things. It includes points, broker fees, interest rate, and certain other credit charges a borrower is required to pay.
A balance sheet is a financial statement that shows assets, liabilities, and net worth as of a specific date. This is a very important document as it holds so much information.
Most have heard of a cap, but many do not know what it means. For an adjustable-rate mortgage also known as ARM, a limitation on the amount of interest rate or mortgage payments may increase or decrease.
Most everyone knows what debt it. This is money owed from one person or institution to another person or institution. This is something more and more people are dealing with first hand.
Another phrase that is not known very well is earnest money deposit. This is the deposit to show that you are committed to buying the home. This deposit usually will not be refunded to you after the seller accepts your offer, unless one of the sales contract contingencies is not fulfilled.
The Fair Credit Reporting Act (FCRA) is a consumer protection law that imposes obligations on credit bureaus that maintain consumer credit histories, lenders and other businesses that buy reports from credit bureaus and, parties who furnish consumer information to credit bureaus.
A general contractor is a person who oversees a home improvement or construction project and handles various aspects such as scheduling workers and ordering supplies. A general contractor is instrumental in building or remodeling a home.
Hazard insurance should be considered a must have. It is insurance coverage that compensates for physical damage to a property from vandalism, wind, fire, or other covered hazards or natural disasters. Everyone needs this, because you never know what is going to happen.
Everyone knows what a rental property is. However, most do not know that a rental property is considered income property. Income property is any real estate developed or purchased to produce income.
Yet another term that most people do not know is Judgment Lien. This is a lean on the property of a debtor resulting from the decree of a court. This can be for any property that is owned.
Keogh funds are an uncommon term that many do not know. It is a tax-deferred retirement-savings plan for small business owners or self-employed individuals who have earned income from their trade or business. Any contributions to the Keogh plan are tax-deductible.
One term that many are familiar with is late charges. These are penalties imposed by a lender when a borrower fails to make a scheduled payment on time. This is something that most try to avoid, however for many it is not always possible.
Manufactured housing is something that most have heard of. These are home that are built entirely in a factory in accordance with a federal building code administered by the U.S. Department of Housing and Urban Development (HUD). These homes may be singular or multi-section and are transported from the factory to a site and installed.
Real estate agents use many terms that most people are just not familiar with. Knowing some of the terms can help when dealing with these agents. So when you need to deal with a real estate agent, if they use a term you do not know, just ask them to explain it, usually they are more than willing.