25 terms

Lesson 9: Home is Where the Mortgage or Lease Is

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Terms in this set (...)

adjustable rate mortgage
"ARM"; a mortgage (home loan) with an interest rate that periodically changes; also called variable rate mortgage.
amortization
the process of paying off the balance of a loan over time.
appreciation
an increase in the value of an asset over time.
collateral
property that is pledged as security for a loan.
deed of trust
mortgage; a pledge of real property to secure a loan.
depreciation
a decline in the value of an asset over time.
down payment
a portion of the cost of a home, paid up front, usually from savings.
earnest deposit
a money deposit of about 3% of the purchase price made upon signing of the sales contract.
easement
the right of another to use or cross over someone else's land.
encumbrance
a claim against a property by someone who is not the owner; liens and easements.
escrow
an arrangement by which a neutral third party (escrow company) holds papers and funds during the sale period.
equity
the value of a piece of property, minus any debts secured by the property.
Fair Housing Act
a federal law that protects people from discrimination when renting, buying, or getting a home loan.
foreclose
the process by which a lender takes ownership of a mortgaged property when a borrower defaults on their loan.
fixed rate mortgage
a home loan with an interest rate that remains the same for the entire term of the loan.
lien
a right in a property given by a debtor to a creditor to secure a debt.
mortgage
a home loan granting the lender a security interest in the property.
points
a fee equal to 1 percent of the loan amount.
principal
the amount borrowed.
promissory note
a document in which one party promises to pay a sum of money to the other.
real estate
land, as well as any physical property or improvements affixed to it.
security deposit
a fee a landlord requires a tenant to pay at the beginning of the tenancy to provide a fund for collecting unpaid rent, costs of repair, and cleaning.
title
legal ownership of the property.
unlawful detainer
a legal proceeding brought to evict a tenant.
variable rate mortgage
a home loan with an interest rate that changes; also called adjustable rate mortgage