A Would-Be Homeowner’s Real Estate Dictionary

Amortization – The process of gradually paying off your mortgage with regular payments. | When using the amortization method, you must factor in an annual interest rate.

Appraisal – The process of determining how much a property is worth, typically used by a lender to decide how big your loan is should be. | The bank will be sending a team to do the appraisal on Friday.

Comparables – A list of recently sold properties in the area that can be used to determine the market value of a similar property, also known as “comps”. | My realtor sent me over the comparables, we are getting the best deal in the neighborhood.

Contingency Clause – A condition or action that must be in order for a purchase offer to become binding. | Replacing the floors to something that is tile has been added to our contract as a contingency clause to close the deal.

Deed – A legal document that states the official owner of a property, also called a transfer. | Your father is the owner of the house; his name is the only one listed on the deed.

Equity – The percentage of a property’s value owned by the homeowner. (Its market value minus the amount still owed on it). | The equity of our house has tripled in the last twenty years.

Foreclosure – A legal process that allows a lender to recover money owed on a defaulted loan by taking ownership of the property and selling it. | In 2012 my house went into foreclosure because of the housing bubble explosion.

In Escrow – A period of time after a buyer makes an offer and the seller accepts during which the property is transferred to a third party until the transaction is complete. | The property is in escrow, we’re waiting on the seller to give us a date to sign the paperwork and transfer the property.

Lien – A legal claim to a property if the owner defaults on mortgage payments or has unpaid tax debt. | Your title is not free of defects, as the title search uncovered a contractor’s lien.

Maturity Date – The last day of a mortgage term, at which time the loan must be repaid in full or a new agreement must be reached. | We celebrated the maturity date by going to dinner and celebrating obtaining the full and complete ownership of our home.

Principal – The amount borrowed from a lending institution. In mortgage payments, this doesn’t include interest. | The principal of my mortgage was $155,000.

Title Insurance – A policy that protects a homeowner against challenges of ownership to a property or other problems related to the title of a home. | When getting title insurance the title report uncovered no clouds or defects on the chain of title, and that the seller was the legal owner of the home.

To receive title insurance and ensure that your escrow officer is the best in the business, you should reach out to Gables Title Group because we’ll get you from contract to closing.