Say What?!- 10 Common Real Estate Terms
Buying and selling property is a specialized market where industry professionals often speak a language not everyone outside the industry understands. You can pick up most of the terminology you need as you go, but establishing a solid foundation for your learning is important. If you can learn the top 10 real estate terms, you should be able to grow your knowledge to more complex real estate concepts.
- The Amortization Schedule is a table or spreadsheet that shows how much of each mortgage payment goes to interest and how much is left to reduce the principal balance of the loan. It will show you the allocation for every payment and the outstanding balance until the balance reaches zero.
- The Appraised Value of a property is the fair market value of the property as determined by a professional appraisal company with experience valuing real estate in your area.
- The Assessed Value of a property is the value assigned to a property to determine the level of real estate taxes the local government can collect from you.
- The Deed or Deed of Trust is a legal document that shows ownership of a piece of real estate.
- Earnest Money is a deposit you give to a seller to prove you are serious about purchasing their real estate.
- The Federal Housing Administration (FHA) is a division of the US Department of Housing and Urban Development that sets underwriting and construction standards. The FHA also insures certain private mortgage loans.
- A Lien is a legal claim to the property that requires repayment before you can sell the property. Typical liens on real estate include the mortgage, home equity loans or unpaid taxes.
- The Loan-to-Value (LTV) is a percentage that expresses the relationship between what you owe and the property value. For instance, owing $80,000 on real estate with a value of $100,000 equates to an LTV of 80 percent.
- A Mortgage is a special kind of loan for buying real estate, usually allowing you to spread payments out over 30 years.
- A Real Estate Agent is a professional who can help you buy, sell, value or stage your home