Appraisal An opinion of value based upon factual analysis.

Appraisal Fee The Bank that lends you the money to buy your new home needs to calculate the value of the home. The Bank will not loan $90,000 for a home that is only valued at $75,000. An independent appraiser is paid to inspect the home and determine the value. Of course, the Bank will charge either you or the Seller for this service. Normally the Buyer is responsible for this expense, but everything is negotiable.

Appreciation An increase in value of real estate.

Closing The final settlement of a real estate transaction between Buyer & Seller.

Conventional Mortgage A mortgage securing a loan made by investors without governmental underwriting. FHA & VA are government underwrited.

Counter Offer A rejection of an offer by a seller along with an agreement to sell the property to the potential Buyer on terms differing from the original offer.

Earnest Money An offering of money by the Buyer, usually $300-$1,000, included with the purchase contract to show the Seller that the Buyer is negotiating in "good faith". This money is deposit with the Escrow Company and goes toward the purchase price of the home.

Equity The value which an owner has in real estate over and above the amount owed.

Escrow A third neutral party(escrow agent) that completes the transaction between Buyer & Seller.

FHA Loan A loan insured by the federal government and issued to a buyer via the Federal Housing Administration(FHA).

Hazard Insurance Premium Hazard insurance is to protect you and the Bank in case of fire or natural disaster. Often this policy is included in your Homeowners Policy which can protect against additional risks, like theft and personal liability. Usually, you will pay this amount monthly in your mortgage payment or one lump sum at Close Of Escrow.

Interest After we Close Escrow, your first mortgage payment is not due for another 30-59 days. After that it's once a month. You will be charged interest in advance for the time period from the Closing Date until your first mortgage payment is due.

Lender Inspection Fee When you purchase a new home from a builder, they will have an independent inspector check the home.

Mortgage Insurance Application Fee Mortgage insurance is insurance for the Bank in case you default on your loan. If you have 20ÿr more as a down payment, then the bank does not require it. The application fee is a paper processing fee.

Mortgage Insurance Premium Mortgage insurance is insurance for the Bank in case you default on your loan. If you have 20 percent or more as a down payment, then the bank does not require it. Usually, you will pay this amount monthly in your mortgage payment.

Origination Fee A fee charged by the lending institution. A lot of paper work is shuffled on your behalf to get the loan documents organized with the banking institution, escrow agent & title company; and they don't do it for free.

Principal This is the total amount of the loan not including interest or any fees .

Purchase Contract This is the instrument we use to write an offer on a home. After all the terms of sale are negotiated, it is called a Purchase Contract.

Reserves Deposited with Lenders (Impound Account) This account is established to pay re-occurring items such as real estate taxes and hazard insurance. Each time you pay your mortgage a little amount is set aside for the impound account, never too much or too little. At close of escrow you will pay an amount to start this vital account.

Taxes All real estate taxes pertaining to the property will be prorated as of the day of escrow.

Term The period of time during which a mortgage must be paid. Somet