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FOR ALL YOUR REAL ESTATE NEEDS
2106 Stout Road
Menomonie WI 54751
Phone: 715-235-0635
Fax: 715-235-4461
Toll Free:
888-491-7055
Rassbach@wwt.net
*Menomonie
Real Estate
*Dunn
County Real Estate; Land
*Waterfront
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Understand the Jargon!
reprinted courtesy of
Our Family Place
-
 Agent
- An individual who represents a seller, a buyer or both in the purchase or
sale of real estate.
- Amortization
- The schedule of loan payments that establishes the amount of payment to be
applied to the principal and the amount to be applied to interest, usually on
a monthly basis, for the full term of the loan.
- Annual Percentage Rate (APR)
- The TOTAL interest rate of a mortgage, including the stated loan interest
as well as any upfront interest paid in securing the loan. The APR will
invariably differ from the mortgage rate quoted due to the inclusion of these
items.
- Appraisal
- An estimate of value of a Real Estate property by a professional third
party. Virtually all non-owner financed mortgages will require an appraisal
and is generally paid for by the buyer.
- Adjustable Rate Mortgage (ARM)
- A mortgage in which the Interest rate is adjustable, meaning that the rate
can go up or down according to prevailing financial market conditions.
- Assessment
- The value of a property as determined by the local tax jurisdiction which
is used to determine the amount of your property taxes.
- Buyer's Agent
- A Real Estate Agent that has made an agreement to represent the buyer
exclusively, rather than the seller.
- Comparable Market Analysis (CMA)
- A comparison of the prices of similar houses in the same general
geographic area. A CMA is used to help determine the value of a property,
either for a seller or a buyer.
- Closing
- The process that effects the final transfer of the deed from the seller to
the buyer, as well as finalize all aspects of the mortgage of the property.
- Closing Costs
- Funds needed at the time of closing (separate from and in addition to the
down payment). Loan origination fees, discount points, Attorney fees,
recording fees and pre-paid are some items that may be included. They often
will total from 3% to 5% of the price of the home, payable in cash.
- Contingencies
- These are conditions - or "safety valves" written into Real Estate offers
and contracts to prevent a buyer from being forced to buy a house that is
unsatisfactory - either structurally or financially. Examples of contingencies
are "This contract is subject to the buyer obtaining a satisfactory whole
house inspection." or "Subject to the buyer being able to obtain a mortgage."
- Condominium
- Housing where the owner owns only the unit in which they live - from the
interior walls inward, generally - as well as a portion of the common area.
- Debt to Income Ratio
- The ratio of a borrower's total debt as a percentage of their total gross
income.
- Deed
- The document that, when recorded with your local government, determines
ownership of a property. Transferred from seller to buyer at closing.
- Earnest Money
- Money that is submitted with an offer to purchase which indicates a
buyer's seriousness and good faith. In virtually all cases, earnest money will
need to be submitted at the time of the offer and remains in escrow until the
time of closing, at which time it becomes part of the down payment.
- Equity
- The difference between the value of a property and the total of any
outstanding mortgages or loans against it.
- Escrow
- Funds held in reserve both prior to closing (for example the earnest money
and deposit) by a third party and after closing by the mortgage company to pay
future taxes and homeowners insurance. In some areas, "escrow" also refers to
the closing process.
- Fixed Rate Mortgage
- A mortgage loan where the interest rate is established at its origination
and continues unchanged through the life of the loan.
- FSBO (For Sale By Owner)
- Real Estate that is sold without the assistance of an Agent. FSBO can
refer to both the individual selling the property "They are a FSBO," or the
property itself "that house is a FSBO."
- Foreclosure
- The process through which a lender takes back property from a defaulting
owner and re-sells it.
- Homeowner's Association
- An owners group, whether in a condominium, townhouse or single family
subdivision that establishes general guidelines for the operation of the
community, as well as its standards.
- Inspection
- A whole house inspection of a home being considered for purchase which
looks for defects in the property.
- Interest
- That portion of a mortgage payment that is the "charge" for using the
lender's funds.
- Lien
- A legal claim against a piece of property that can prevent it from being
sold unless the lien is satisfied (paid off). Liens can be filed by unpaid
contractors or other debtors in a legal process so that they will be paid when
a property is sold.
- Listing
- A property for sale by a Real Estate Brokerage and Agent.
- Loan Origination Fee
- A charge imposed by the lender, payable at closing, for processing the
loan.
- Lock-in
- An agreement by the lender at the time of mortgage application or shortly
thereafter, to write the mortgage at a specific interest rate, whether rates
rise or fall up to the date of closing. Obviously a good move if rates are
rising, not so good if they are falling. Lock-ins have specific expiration
dates, such as 30, 60 or 90 days in the future.
- LTV (Loan to Value)
- The ratio of the amount of the mortgage as a percentage of the value of
the property.
- MLS (Multiple Listing Service)
- A listing (almost always computerized) of all the properties for sale by
Real Estate Brokerages in a given geographical area.
- PMI (Private Mortgage Insurance)
- Required on virtually all conventional loans with less than 20% down
payment. Although the payments for PMI are included in your mortgage payment,
it protects the lender should you default on the loan. On FHA loans, you will
pay a MIP (Mortgage Insurance Premium) which accomplishes the same purpose.
- Points
- 1 point is equal to 1% of the loan value, paid at closing. Points can be
loan origination fees or "discount points" which reduce the interest rate of
the loan (you are actually paying a finance charge up front). When a lender,
for example, quotes a rate of 8 1/2% with 1 + 1 points, 1 point is for the
origination fee and 1 point is for the discount fee.
- Prequalification
- The first stage of a mortgage application where the lender will run a
basic credit report and determine your debt to income ratio in order to see
how much mortgage you qualify for.
- Pre-paid
- Paid for (in cash) at closing for such items as homeowners insurance for
one year and real estate taxes for several months.
- Principal
- The amount borrowed for a mortgage loan. Your monthly mortgage payment
will be applied to both the interest and the principal (be assured, though,
that the lions share will go to the interest portion in the first years of the
loan).
- Property Tax
- An annual or semi-annual tax paid to one or more governmental
jurisdictions based on the amount of the property assessment. Generally paid
as part of the mortgage payment.
- Recording
- The act of entering deed and/or mortgage information into public record
with your local government jurisdiction.
- Sub-Agent
- A Real Estate Agent who is working with a buyer but who represents the
seller in the transaction.
- Title Insurance
- Protects your title - your ownership rights - from claims against it. Paid
at closing, title insurance may be the responsibility of the buyer, the
seller, or both, depending on what is traditional in your locality.
- Warranty
- Covers either most of the house in a new home, or selected items (for
example the heating and air conditioning system or the water heater) in a used
home. Warranties can vary widely and are optional in used homes (paid for by
either the buyer or the seller).
- Zoning
- Laws that govern specifically how a zoned area can be used. For example,
an area may be zoned for single family residential, condominiums, commercial
or retail, or a mix of two or more uses.
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