ARM - Adjustable Rate Mortgage - A loan that allows the interest rate to be changed periodically.
Agency - A legal relationship in which an owner-principal engages a broker-agent in the sale of property or
buyer-principal engages a broker-agent in the purchase of property.
APR - Annual Percentage Rate - The total financial charge (interest, loan fees, points) expressed as a percentage
of the loan amount.
Amortization - The gradual repayment of a mortgage by periodic installments.
Appraisal - An estimate of the value of a property.
Assessed Value - The valuation placed on property by a public tax assessor as the basis of property taxes.
Assumption of Mortgage - Agreement by the buyer to assume responsibility for a mortgage owned by the
seller; the seller remains liable to the lender unless the lender agrees to release him.
Balloon Mortgage - A mortgage that has a substantial amount of the principal due at the maturity of the note.
Broker - A person licensed by a state real estate commission to act independently in conducting a real estate
brokerage business. Although the requirements for a broker’s license vary from state to state, an individual
usually must have one or more years of experience in the industry and pass an examination.
Buydowns - When a home buyer, or a third party, puts up an amount of money sufficient to “buy” or obtain
a lower-than-market interest rate from a lending institution.
Cap - A maximum amount of interest that can be charged.
Closing - The final step in transferring ownership of a property from seller to buyer.
Closing Costs - Fees and expenses, not including the price of the home, payable by the seller and the buyer
at the time of closing (e.g., brokerage commissions, title insurance premiums, inspections and appraisal fees.)
Condominium - Ownership which involves a separation of property into individual ownership elements and
common ownership elements.
Contingency - A condition that must be satisfied before a contract is binding.
Conventional Loan - A fixed rate, fixed-term loan that is made without government insurance.
Co-op - A buyer purchases shares in a co-op corporation, made up of residents in the co-op property. The
buyer owns the shares rather than owning the real property. In exchange, the buyer has the right to occupy a
Earnest Money - A payment given to the seller by a potential buyer indicating the buyer’s intent to complete
the purchase of the property.
22 · THURSDAY, JAN 3, 2019 TRIB TOTAL MEDIA