Bridge Loan
A short-term loan used to “bridge” the gap between the purchase of a new property and the sale of an existing property.
Closing Costs
Expenses over and above the property price that buyers and sellers incur when transferring ownership of a property, such as title insurance, appraisal fees, and loan origination fees.
Fees and Commissions
Fees paid for services related to real estate transactions, including agent commissions (typically a percentage of the sale price), administrative fees, and other closing costs.
Earnest Funds
A deposit made by a buyer to demonstrate commitment to a real estate transaction, typically held in escrow until closing.
Escrow
A financial arrangement where a third party holds funds or documents until certain conditions are met, such as closing a real estate deal.
Appraisal
A professional assessment of a property’s value, usually required by a lender before approving a mortgage.
Title Insurance
Insurance that protects the buyer or lender from potential legal issues regarding the ownership of the property, such as claims or disputes over the title.
Contingency
Conditions that must be met for a real estate contract to be binding, such as financing approval or a satisfactory home inspection.
Foreclosure
The legal process by which a lender can take possession of a property if the borrower fails to make required payments on a mortgage.
Pre-Approval
A process by which a lender evaluates a potential borrower’s creditworthiness before they begin looking for a property, providing an estimate of how much they can borrow.
Closing Disclosure
A document provided to the buyer and seller outlining the final terms and costs of the loan, including closing costs, at least three days before closing.
MLS (Multiple Listing Service)
A database used by real estate agents to share information about properties for sale, providing a central listing service for buyers and sellers.
Zoning
Local regulations that determine how a property can be used, such as residential, commercial, or industrial zoning.
Down Payment
The initial cash payment made by a buyer, typically a percentage of the property’s sale price, required by most lenders.
Equity
The difference between a property’s market value and the outstanding mortgage balance, representing the ownership stake in the property.
Fixed-Rate Mortgage
A type of mortgage loan where the interest rate remains the same for the entire term of the loan.
Adjustable-Rate Mortgage (ARM)
A mortgage where the interest rate may change periodically, depending on changes in a corresponding financial index.
Short Sale
A real estate transaction in which the property is sold for less than the amount owed on the mortgage, typically to avoid foreclosure.
Deed
A legal document that transfers property ownership from one party to another.
Inspection
A professional evaluation of a property’s condition, often a contingency in real estate contracts to ensure the property is in acceptable condition before purchase.