Real Estate Definition - Part 1
Real Estate Definition Essential Terms Everyone Should Know in order to understand the real estate process. Real estate has its own share of language and some of it is hard to understand. Learn your home buyer vocabulary before you start looking for your dream home.
Annual Percentage Rate (APR)
The annual rate charged for borrowing or earned through an investment and represents the actual yearly cost of funds over the term of a loan.
Private Mortgage Insurance (PMI)
Borrowers have to pay this when they take out a mortgage from a commercial lender and pay a down payment of 20 percent or less.
Adjustable-Rate Mortgage (ARM)
This type of mortgage allows the lender to change the interest rate at certain points during the term of the loan.
This type of mortgage is not guaranteed or insured by any government agency.
This type of loan has an where the interest rate doesn’t fluctuate during a “fixed-rate” period of the loan. This allows the borrower to accurately predict the amount of future payments.
Federal Housing Administration Loan (FHA Loan)
This type of mortgage is issued by an FHA-approved lender and insured by the Federal Housing Administration.
The amount charged on top of the principal by a lender to a borrower for the use of assets.