Taking the Mystery out of Real Estate terminology (words!)

Many times, financial terms are thrown around in the world of Real Estate.  I have a two-part "primer" to prepare you.  If you have never heard these terms before, I guarantee you that it is going to happen sometime - not just to someone else, but to you!  Heads up!

Definition of Closing Costs

Appraised Value- an opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc.  of the property and surroundings.

Loan Application Fee- paid to lender at time of application; cost varies by lender

Credit Report- a report on the past ability of a loan applicant to pay installment payments

Point- 1% of loan amount

Origination Fee- fee buyer pays lender to originate new loan.

Loan Discount- points lender charges; may be paid by either  buyer or seller on conventional loans; number of points fluctuates with mortgage money market. 

Photos-  charged by lender for photographing property.

Tax Certificate- certificates issued by taxing authorities showing the current years' taxes and the last year that taxes were paid. 

Mortgagee's Title Policy-  required by lender to ensure that lender has a valid lien; does not protect the buyer.

Owner's Title Policy- insures that buyer has title to property.

Escrow Fee-  charged by the title company to service transaction and to escrow money and documents; amount varies with company; usually split between buyer and seller.

Restrictions- certified copy of deed restrictions required by lender.

Tax Proration-  seller pays buyer taxes from January 1st to closing. 

Make sure you visit my blog next week for part 2 of Definitions of Closing Costs.