Annual Percentage Rate (APR): The cost of a loan or other financing as an annual rate. The APR includes the interest rate, points, broker fees and certain other credit charges a borrower is required to pay.

An amount paid yearly or at other regular intervals, often at at guaranteed minimum amount.  Also, a type of insurance policy in which the policy holder makes payments for a fixed perioud or until a stated age and then receives annuity payments from the insurance company.

The fee that a mortgage lender or broker charges to apply for a mortgage to cover processing costs.

A professional analysis used to estimate the value of the property.  This includes examples of sales of similar properties.

An increase in the market value of a home due to changing market conditions and/or home improvements.

A financial statement that shows assets, liabilities, and net worth as of a specific date.

A mortgage with monthly payments often based on a 30-year amortization schedule, with the unpaid balance due in a lump sum payment at the end of a specific period of time (usually 5 or 7 years). The mortgage may contain an option to “reset” the interest rate to the current market rate and to extend the due date if certainconditions are met.

A final lump sum payment that is due, often at the maturity date of a balloon mortgage.

A short-term loan secured by the borrower’s current home (which is usually for sale) that allows the proceeds to be used for building or closing on a new house before the current home is sold. Also known as a “swing loan.”

The capitalization rate is a measure of the return on an investment property, calculated by dividing the net operating income by the property’s purchase price.

The upfront fees charged in connection with a mortgage loan transaction. Money paid by a buyer (and/or seller or other third party, if applicable) to effect the closing of a mortgage loan, generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.

A right to the use of, or access to, land owned by another.

The difference between the value of a property and the amount of any outstanding mortgages or loans.

An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.

The price at which property would be transferred between a willing buyer and willing seller, each of whom has a reasonable knowledge of all pertinent facts and is not under any compulsion to buy or sell.

An investment strategy where a property is purchased, renovated, and then quickly resold for a profit.

A ratio used to estimate the value of an investment property based on its rental income.

Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other covered hazards or natural disasters

A professional in-
spection of a home to determine the
condition of the property. The inspec-
tion should include an evaluation of the
plumbing, heating and cooling systems,
roof, wiring, foundation and pest infesta-
tion