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What is earnest money?

Earnest money is a deposit you make when you make an offer on a house.

What is equity?

Equity is the financial interest or cash value of your home, minus the current loan balance(s). If selling the home, this would also be minus any costs incurred in selling the home.

If you're buying a home and don't have very much money for the down payment, you may want to find out if the seller would be interested in "sweat equity". This would allow you to perform the labor on any needed repairs and maintenence to the home, (such as outside repairs, painting or electrical work) in exchange for credit towards closing costs.

What is escrow?

Escrow is a trust account created by a neutral third party to hold money for the seller or buyer. When you put down a deposit on a house, for example, you should put that money into an escrow account. When the sale is complete, the money can be released from this account to the seller. You should also set up an escrow account for your taxes and insurance. Your monthly mortgage payment includes payment for 1/12 of your taxes and insurance. This money is kept in an escrow account. When the bill comes due, your mortgage company uses the escrow money to pay it.

What is flood insurance?

Flood insurance is insurance that compensates for the physical property damage resulting from rising water.

What is hazard insurance?

Hazard insurance is insurance coverage that compensates for physical damage to a property from natural disasters such as fire or other hazards.

What is homeowners association (HOA)?

Homeowners association is a nonprofit association that manages the common areas of a condominium or "planned unit development" (PUD). Unit owners pay a fee to the association in order to maintain areas such as a pool or playground that are owned jointly.

What is homeowners insurance?

Homeowners insurance is an insurance policy that combines personal liability insurance and hazard insurance coverage for a residence and its contents.

What is joint tenancy?

A joint tenancy is an equal, undivided ownership in a property by two or more individuals.

What is joint tenancy?

A joint tenancy is an equal, undivided ownership in a property by two or more individuals.

What is PITI and what does it stand for?

PITI is the total monthly payment you make on a house-Principal, Interest, Taxes, and Insurance.

What is principal?

Principal is the amount of money borrowed and still owed on a loan not including the interest.

What is the difference between a real estate broker and a real estate agent?

The terminology used to identify real estate professionals differs a little from state to state. Brokers are usually required to have more education and experience than real estate agents. The person you normally deal with is a real estate agent. The salesperson is licensed by the state, but must work for a broker. All listings are placed in the broker's name, not the real estate agents.

What is the difference between being prequalified and preapproved for a loan?

The difference between being prequalified and preapproved is simple:

If you're prequalified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information given was accurate and true.

If you're preapproved, it means that you have undergone the extensive financial background check - which includes looking at your credit history, previous tax returns and verifying your employment - and the lender is willing to give you a loan. You're APPROVED! So, they give you a letter that states such and it is valid for a approximately 60 days thereafter.

Notwithstanding the above, you will have an accurate figure which shows the maximum amount that you are approved for. Most sellers prefer buyers that have been preapproved because they know that there will not be any problems with the purchase of their home.

What is title insurance?

Title insurance is insurance that protects the lender and buyer against any losses incurred from disputes over the title of a property.

What is underwriting?

Underwriting is the process of evaluating a loan to determine whether the loan is a good risk.

What is zoning?

Zoning is the laws that establish how a property can be used and what codes must be followed when erecting new buildings.

What type of a home is a condominium?

A condominium is a form of homeownership in which the owner owns the airspace within the walls but doesn’t own the actual walls, ceilings, or floors of the home.

Who is a subagent?

A subagent is an agent who works with you to purchase a house but is paid by the seller.

Why do people refinance?

People finance to obtain a new loan in order to pay off the existing mortgage or to gain access to the existing equity in the home.

Why should I use a real estate agent?

A real estate agent is more than just a "sales person." They act on your behalf as your agent, providing you with advice and guidance and doing a job - helping you buy or sell a home. Due to the fast changing market, the data on available listings is not 100% accurate. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent.

There are two types of agents, "Buyer's Agents" and "Seller's Agents". It used to be common for all parties involved to work for the seller, hence the term "Seller's Agent". Nowadays, you will most often find a different type of agent, the "Buyer's Agent". If you are in the market to buy, it would be advisable to use a Buyer's Agent. They can make recommendations on what terms and prices to offer as well as negotiating a deal with your best interest in mind. If you happen to be working with a Seller's Agent, never disclose to them the top dollar you are willing to pay for any property. Keep it narrowed down only to things that you would tell the seller directly.