Real Estate Vocab Flashcards

Real Estate Vocab Flashcards Acceleration ClauseAn acceleration clause is a clause contained in your mortgage which allows your lender to speed up the rate of your loan's payment terms. The clause can also allow your lender to require immediate payment of your mortgage in full. Normally, this clause can only be activated if you were to default on your loan or if you were to otherwise violate your loan's terms and conditions.Certificate Of Reasonable Value (CRV)When you are applying for a VA loan, the Veteran Administration will send an appraiser to estimate the value of the home. Based on this professional's appraisal, the VA will issue a certificate of reasonable value or a CRV. This document will state the maximum dollar amount that you can borrow to purchase the home.AmortizationAmortization is the reduction of your debt through the monthly payments you make on your loan. Your payments are structured so that a part of each payment goes towards principal and the other part goes towards interest. At the beginning of your loan, more of your payment goes towards interest than towards principal. Towards the end of your loan, more of your payment amount is placed towards the principal balance of your loan. Once you make your final payment, your loan is fully amortized.Co-BorrowerA second person on the title of a loan. If your credit rating isn't good enough to qualify you for a loan, a co-borrower can help you get the loan you need by co-signing for you.The co-borrower, sometimes referred to as a co-signer, would sign the promissory note with you and if you were to default on the loan, the loan would then become their responsibility.Combined Loan To Value (CLTV)If you have more than one mortgage out on your property, the amount of the two mortgage principals combined and divided by the appraised value of your home (or sales price if the sales price is less than the appraisal amount) is your combined loan to value, or CLTV.Biweekly Payment MortgageA bi-weekly mortgage payment is the process of making your mortgage payments every two weeks rather than on a monthly basis in order to pay off your mortgage early and save money on interest. While there are companies who will charge you a fee to set you up on a bi-weekly mortgage program, you can effectively achieve the same results by making your payments bi-weekly yourself.

Closed-End LeaseWhen you lease a vehicle with a closed-end lease, it means that all of the costs and residual value are determined up front and when the lease is over, you have no further obligations in regards to the lease. Any depreciation of the vehicle at the end of the lease becomes the responsibility of the lease company. This type of lease is also known as "walk away" lease.Appraised ValueThe appraised value of a property is an appraiser's estimation of a property's fair market value. This appraised value is determined by the appraisal process, which factors in things like the condition of the property you are having appraised and comparable sales in the area of the home.In order to be approved for a mortgage, the appraised value of the home you are purchasing must come in at or above the amount of the mortgage you are applying for.Closing CostsWhen you buy or sell a home, certain expenses are incurred that are referred to as closing costs. These costs fall into one of two categories. Nonrecurring closing costs are those expenses that are incurred by the buyer in relation to purchasing the property and obtaining the loan.These are one-time costs that won't need to be paid again.Pre-paid closing costs are items, like property taxes and insurance, that will be paid on a recurring basis. When you buy a home, you should receive a Good Faith Estimate of these closing costs within three days of submitting your loan application to your lender.Cloud On TitleIf you are purchasing a home and a title search is performed and there are any outstanding claims found on the property, there is said to be a "cloud on title" and for the cloud to be removed, a court action needs to be taken.Sometimes a quitclaim deed or release will be effective in having the cloud removed.Annual Mortgagor StatementWhen you are paying off a mortgage loan, you will receive an annual mortgagor statement at the end of each year.This report outlines how much money you have paid towards principal, interest and taxes during that year. This report will also show you the balance that is owed on your mortgage at that time.AssessmentAn assessment is a value that is placed on your property for the purpose of determining the amount of your property taxes. The county assessor is usually the governing agency that will determine your assessment. The term can also be used to refer to a charge that could be placed against your property for local improvements like sewer repair or street improvements.

Assumption FeeAn assumption fee is the fee that is paid to the lender when a home buyer assumes the seller's mortgage when purchasing a property. If you are purchasing a home and assuming the seller's current mortgage, you will normally be required to pay this fee to the lender at the time of closing. The fee covers the processing costs incurred by the lender when they transfer the loan to the buyer.AppraisalAn appraisal is a tool that is used to estimate the value of a property and is most often used in regards to real estate transactions. When applying for a mortgage, your lender will most likely require you to obtain an appraisal before they will approve your loan. When obtaining an appraisal for a property you are interested in purchasing, you should work with a certified, licensed professional who is familiar with the area you are purchasing a home in.Assumable MortgageAn assumable mortgage is a mortgage that can be transferred from the current owner of a home to the buyer.For example, if you have an assumable mortgage and interest rates are currently significantly higher than when you had purchased your home, you can entice buyers with the fact that your low interest rate is assumable. When a buyer wants to assume a mortgage, they will need to meet the mortgage lender's requirements in order to qualify.Bridge LoanIf you wanted to purchase and close on a new property, but had not yet sold your previous residence and did not have cash reserves for a down payment, you would need to take out a bridge loan. The bridge loan would be the source of the funds needed for the down payment on your new property. These loans were more common when lenders were not willing to lend at a high loan-to-value ratio, but now that lenders are more lenient in regards to LTVs, these loans are no longer widely used.Call OptionIf your mortgage has a call option, it means that your lender may demand full payment of the mortgage after the end of a specified period. There does not have to be a specific reason for the lender to call the loan due in full, and you will either need to pay the loan off or refinance the mortgage.CommitmentWhen you receive a commitment from a lender, it means that they are agreeing to make a loan to you, subject to compliance with certain stated conditions. Usually this commitment will outline a specific timeframe and a specific interest rate. The term commitment is also used to refer to the promise an investor makes when agreeing to purchase a mortgage from a lender.

AssignmentAssignment of a mortgage can mean one of two things.Assignment can be the transfer of a mortgage from a buyer to a seller, or it can be the transfer of a mortgage from one lender to another. If your mortgage is assumable, an assignment would allow the buyer of your home to take over your current payments and interest rate. A second definition of the term is if your current lender sells your mortgage to another lender, they would assign, or transfer, the mortgage to that lender.Change FrequencyWhen you have an adjustable rate mortgage, or ARM, the term "change frequency" refers to the period of time that elapses between when your loan's interest rate can be changed. Your change frequency is measured in months.Amortization TermYour amortization term is the amount of time it is going to take you to completely pay off the balance of your loan.This term is broken down into months. If you have a fifteen-year mortgage, your amortization term will be180 months and if you have a 30-year mortgage, your amortization term will be 360 months.Assessed ValueWhen your tax assessor places a value on your property for the purpose of determining your property taxes, the value is referred to as your assessed value. It is not uncommon for a property's assessed value to come in below the actual fair market value of the property. Because of this, a property's assessed value cannot be treated as an accurate appraisal.Adjusted BasisThe adjusted basis is a part of the equation that is used to determine your gains or losses when your property is sold.This formula takes the original cost of your property, adds in the value of any capital expenditures of improvements to the property and subtracts the amount of any depreciation.After you calculate your adjusted basis, you subtract it from the sales price of your property to determine your gains or losses.Amortization ScheduleYour amortization schedule is a table that creates a timeline of your mortgage loan payment plan. This table shows you how your monthly payments are broken down and how much of each payment is going towards interest and how much is being applied towards the principal of your loan. By looking at your amortization table, you will see approximately how much you will owe at a given time up until the point where your loan is paid off.Comparable Sales Or PropertiesWhen you have your home appraised, the appraiser will look for properties like yours that have been recently sold.These homes will be approximately the same size as your