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Appraisal
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An estimate of the fair market value of land and improvements at a particular point in time. |
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Assessments
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Special and local taxes imposed on a property in the immediate vicinity of an improvement, such as street lighting districts or flood control. |
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CC & R’s
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Covenants, Conditions, and Restrictions. This document is an agreement to control the requirements, restrictions, and use of a property. |
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Closing Costs
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The closing costs of a mortgage loan depend on all the costs paid by borrowers and/or sellers. These usually include the origination fee, discount points, title insurance, escrow fees, loan document fees, appraisal and credit report fees, mortgage insurance and prepaid items like taxes and insurance impounds. |
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Contingency
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It is a condition that must be met before a contract becomes binding. (For example, a sales agreement can be contingent on the sale of the buyer's current home.) |
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Deed of Trust
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Similar to a mortgage, this is an instrument whereby the owner of real property uses that property as collateral for the payment of a note or other obligation. |
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Down Payment
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The cash paid by the borrower that represents the difference between the sale price and the loan amount. |
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Earnest Money
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The money the buyer gives the seller in a show of good faith against the purchase price of a home. This binds the agreement between buyer and seller. |
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Easement
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A right or interest given by a landowner to a third party regarding a property. For example, the right to pass through another's property to reach your own. |
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Equity
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The value of property beyond the amount owed on it. |
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Escrow
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A neutral third party that acts as an agent for both buyer and seller to ensure that the agreed upon terms of the transaction are carried out. |
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Good Faith Estimate
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All lenders are required to give mortgage applicants an estimate of closing costs within three days of an application submission. |
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HOA
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An organization which governs regulations and expenditures of a particular community. Each homeowner within the community is a member with voting privileges. |
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Home Warranty
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A service contract provided by the builder that covers workmanship of a new home and appliances in working condition in the home for a period of one year. In addition, some builders offer a 10-year extended warranty on major structural defects. |
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Impound Account
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A special savings account held by the lender, where the borrower deposits monthly amounts for taxes and insurance. |
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Legal Description
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The description of real property as used in legal documents. Usually, legal descriptions refer to recorded maps, surveys, or other public documents. |
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Loan Commitment
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A written promise to draw up a loan for a specified amount and term. |
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Loan-To-Value Ratio
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The relationship between the loan amount and the appraised value of the property, expressed as a percentage of the appraised value. |
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Lock-In
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A mechanism which freezes the interest rate that will be charged on a particular loan for a certain time period. |
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Mello-Roos (CFD)
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A legislative act that allows for the creation of a Community Facilities District assessment. This assessment ensures that critical facilities like schools, roads, water and sewer facilities, etc., are available to serve the first home owners. Assessments vary by district. |
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Origination Fee
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This fee is charged by the lender to offset the costs of evaluating, preparing and submitting a proposed mortgage loan. It's normally one percent of the loan amount. |
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PITI
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Principal, Interest, Taxes, and Insurance. |
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Planned Unit Development
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This is a zoning designation for property developed at the same or slightly higher overall density than conventional development, sometimes with improvements clustered between open, common areas. Uses may be residential, commercial or industrial. |
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Points
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A one-time charge assessed at closing by the lender for the cost of the loan. One point is equal to one percent of the loan amount. |
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Power of Attorey
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A written authorization allowing an individual to perform specified acts on behalf of another individual. This may be granted as a general or limited power. |
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Preliminary Title Report
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A report regarding the current condition of the property you are purchasing, used by mortgage companies before approving your loan and title companies before issuing a title policy. |
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Purchase Agreement
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A sales contract in which the purchaser agrees to buy certain real estate, and the seller agrees to sell under stated terms. |
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Recordation
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Filing for record in the office of the county recorder. |
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Title
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Evidence of a person's right to ownership in real property. |
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Title Insurance Policy
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A contract by which the insurance company protects the purchaser and lender against losses. |