Florida Home Buying Glossary
Florida Home Buying Glossary
When looking to buy or sell a home for cash in Orlando, Florida, there may be some real estate terms that you might not be familiar with. Please make use of our Homebuyer’s Glossary to clear up any confusion you encounter along your journey.
Adjustable-Rate Mortgage (ARM): This type of mortgage allows lenders to adjust its applied interest rate periodically based on alterations in a specified index.
Appraisal: A written analysis that provides an estimate of the property’s fair market value; lenders usually require an appraisal prior to loan approval to ensure that the mortgage loan is not greater than the value of the property.
Appraiser: This qualified individual uses their education, training, and experience, to estimate the value of the property.
“As-Is”: This means that a buyer is knowledgeable and agrees to purchase a home in its current condition, regardless of present faults.
Balloon Mortgage: A mortgage which can offer low rates over a specified starting period (typically 5 to 10 years); afterwards, a lump sum balance is due or it can be refinanced by the borrower.
Building Code: Local set of standards and regulations that govern home construction, design, and materials that can be used in building.
Certificate of Title: A document provided by a qualified party (title company or attorney) stating that the property legally belongs to the current owner.
Delinquency: The borrower is unable to make the mortgage payments in the timely manner outlined under their loan agreement.
Equity: The owner’s financial interest invested in a property; determined by subtracting the amount still owed on their mortgage from the fair market value of the property.
Escrow: An item of money, value, or documents deposited with a third party with conditions that it be delivered upon the fulfillment of a condition. For instance, the deposit of funds or documents with an escrow agent to be disbursed upon the closing of a sale of property.
Fair Market Value: A theoretical price that an inclined buyer and seller could agree upon in the absence of any outside pressures and with full knowledge of the situation.
Homeowner’s Insurance: An insurance policy that combines hazard insurance coverage and personal liability insurance for a residence and its contents.
Lock-in: Written agreement where the lender guarantees a pre-determined interest rate if a mortgage loan is closed within a specified period of time. This agreement typically specifies the number of points to be paid after closing.
Mortgage: A legal document that pledges a piece of property to a lender as security for payment of a debt.
Offer: A potential buyer has indicated their willingness to purchase the home at a specified price; this offer is typically presented in writing.
Pre-Foreclosure Offer: Provision that allows a defaulting borrower to sell their mortgaged property for less than the amount owed to the investor and avoid foreclosure.
REALTOR: Real estate agent or broker who holds an active membership in the NATIONAL ASSOCIATION OF REALTORS or the local real estate board that is affiliated with them.
Sweat Equity: Contributing to the improvement or construction of a property with labor or other manual services in lieu of cash.
Title Insurance: Insurance that protects the lender or buyer against claims that may arise from disputes concerning ownership of the property.
Underwriting: Process of assessing a loan application to determine the risk involved in make said loan. This entire process includes an evaluation of the borrower’s credit history and the value of the property itself.