Homebuyer’s Glossary

AMENITY: A feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use; may be natural (like location, woods, water) or man-made (like a gate or garden).

APPRAISAL: A document that gives an estimate of a property’s fair market value; an appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property.

BUDGET: A detailed record of all income earned and spent during a specific period of time.

CLOSING: This is the time at which the property is formally sold and transferred from the seller to the buyer; it is at this time that the borrower takes on the loan obligation, pays all closing costs, and receives title from the seller.

CLOSING COSTS: Customary costs above and beyond the sale price of the property that must be paid to cover the transfer of ownership at closing; these costs generally vary by location.

DESIGN CENTER: Place to customize & choose all selections of your home; you will be accompanied by one of our Design Consultants during your appointment.

DOWN PAYMENT: The portion of a home’s purchase price that is paid in up front & is not part of the mortgage loan.

EQUITY: An owner’s financial interest in a property; calculated by subtracting the amount still owed on the mortgage loan(s) from the fair market value of the property.

ESCROW ACCOUNT: A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.

HOME INSPECTION: An examination of the structure and mechanical systems to determine a home’s safety; makes the potential homebuyer aware of any repairs that may be needed.

LOAN: Money borrowed that is usually repaid with interest.

MORTGAGE: A lien on the property that secures the Promise to repay a loan.

PRE-APPROVE: Lender commits to lend to a potential borrower; commitment remains as long as the borrower still meets the qualification requirements at the time of purchase.

REAL ESTATE AGENT: An individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.