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Georgia Real Estate
Chapter 11 & 12
| Term | Definition |
|---|---|
| Term Loan | A loan that requires only interest payments until the last day of its life |
| Maturity | The end of the life of the loan |
| Amortized loan | a loan requiring periodic payments that include both interest and partial repayment of principal. |
| Principal | the balance owing on a loan |
| budget mortgage | collects principal, interest, one-twelfth of the estimated cost of the annual property taxes and hazard insurance on the mortgaged property. |
| escrow | The money for tax and insurance payments is placed in an escrow account also known as an impound account or a reserves account. |
| balloon mortgage | is any loan that has a final payment larger than any of the previous payments on the loan. The term loan that we first talked about is an example of one type of balloon loan. |
| impound account | An account into which the lender places monthly tax and insurance payments |
| Conventional loans | Real estate loans that are not insured by the FHA or guaranteed by the VA. |
| PITI payment | A loan payment that combines principal, interest, taxes and insurance. |
| Loan-to-value | the percentage reflecting what a lender will lend divided by the sale price or market price, which ever is lower. |
| FHA-Federal Housing Administration | insures lenders against losses due to non-repayment on loans. They will do so for both new construction or a resale. |
| equity | The difference between the market value of a property and the debt owed against it. |
| point | the expenses a lender incurs in processing a mortgage loan. =1% of the loan |
| VA loan | The VA guarantees loans for the purchase of single familyhomes, townhouses and condominiums, to build or improve a home, and to buy a mobile home as a residence |
| earnest money | commonly accompanies and offer to purchase as evidence of good faith. The deposit can be cash, check or wire transfer. |
| Unilateral Extension | extension of the closing date is allowed under very specific circumstances: •title problems •closing attorney unable to perform their obligations •lender unable to perform their obligations |
| Latent Defect | A latent defect is a defect that is concealed, or one that a buyer would have to possess certain training or knowledge to recognize. |
| Patent Defect | A patent defect is one that is open to observation and would take no special training to recognize. |
| selling broker | The broker working with the buyer |
| listing broker | The broker working with the seller. |
| rider | any addition annexed to a document and made part of the document by reference. Riders are also known as addendums or attachments. |
| installment contract | also known as a land contract or a contract for deed. An installment contract contains most of the content from the purchase and sale agreement, plus wording similar to the warranty deed, plus many provisions of the mortgage |
| Equitable Title | The period with the buyer and seller signing a valid contract athe buyer holds equitable title A buyer has the exclusive right to purchase and can enforce specific performance of the contract to get title. seller holds bare or naked title. |
| lease option | allows a tenant to buy the property at a present price and terms during the option period. The lease is typically for one year, and the option to buy must be exercised during that time. The tenant is under no obligation to buy. |
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