• CONTINGENCY: A clause in the purchase contract that if not satisfied allows for one or both parties to release from the contract without penalty.
• LOAN ORIGINATION: A lender’s fee for the origination and processing of a loan.
• MORTGAGE INSURANCE: (MIP, PMI or FUNDING FEE) – Insurance policy required by the lender to protect the mortgage company in the event of default (non-payment) on the loan.
• MORTGAGE COMMITMENT: A document or certificate which indicates you have begun the process of applying for a mortgage and which shows you are able to qualify for a loan in the amount that you are offering for the purchase of a property.
• PITI: Principal, interest, taxes and insurance. The components of a monthly mortgage payment.
• POINTS: Charges by the lender to adjust the effective rate of interest on a loan. Each discount point equals one percent of the loan amount and becomes part of the closing costs for the loan.
• POSSESSION: Occupancy of a home by the buyer. Possession usually occurs after the closing on the home.
• PREPAIDS: Money collected at closing to start the escrow account to pay interest, taxes and insurance.
• PRE-QUALIFYING: Prior to the full loan application, a lender will discuss your financial situation and take preliminary information and documentation and do a credit check to determine the price range and loan type which you will qualify for when putting in an offer on a home.
• RATIFIED: Term used to denote when a document has been agreed to by all parties involved and contains all required signatures and initials.
• REALTOR®: A Real Estate licensed in the state, who is required by their membership in the National, Virginia and Tidewater Associations of Realtors to abide by a higher standard of ethics than state laws require. A Real Estate agent or salesperson is not necessarily a Realtor.
• REAL ESTATE INFORMATION NETWORK (REIN): This is the MLS (Multiple Listing System) which is a computerized system of all homes listed for sale and/or sold through real estate agents or other brokers advertising homes for sale. In our market, less than 5% of all homes sold are not listed in this system.
• TITLE INSURANCE: Insures against possible defects in the title which were undiscovered in a title search.
• TOTAL MARKET OVERVIEW: A specialized pricing analysis report that I provide which shows market trends from a home buyers perspective in the area.
• UNDERWRITING: Process of evaluating a loan application to determine the risks involved for the lender. This is the final step in your loan application.
• UNLISTED PROPERTIES (FSBO): Homes which are not listed through the REIN listing system and are usually offered for sale by the owner(s). This can also include foreclosure properties that are not being listed to the public.
• VA/FHA/CONVENTIONAL EXHIBIT: A part of the Purchase Agreement which requires that a property appraise at or above the sales price. This offers you, the buyer, protection against paying more for a property than it is worth.
• WALK THROUGH INSPECTION: An inspection by the buyer completed prior to closing, normally a day or 2 before closing. This inspection allows the buyer to check all appliances, outlets, heating, air conditioning, plumbing, etc. to insure these items are in working order and verify any repairs that were agreed to in the contract prior to closing on the property.