Real Estate Financial Terms

Asheville Real Estate Home

  • ARM (Adjustable Rate Mortgage): A mortgage where the interest rate is adjusted periodically according to a pre-selected index. This is also known as a variable rate mortgage.
  • Amortized Loan: A loan that is paid off in equal installments.
  • Buydown: Money put down to reduce the monthly payments of a mortgage either for the entire duration of a loan or an initial period of the loan.
  • Cap: The limit on the amount the interest rate or monthly payment can change with an ARM.
  • Clear Title: A title that is void of legal issues and outstanding liens.
  • Closing: The term closing means different things in different states. In some states the closing doesn’t take place until all documents have been record at the local records office. In other states the word “closing” describes the meeting where the documents are signed and the money changes hands.
  • Closing Costs: Expenses in the closing of a real estate mortgage transaction. The purchaser's expenses generally include the cost of a title search, premiums for title policies, survey, attorney fees, lender service fees, and recording fees. Escrow may be required as well as PMI. This is a portion of the monthly mortgage payment that is held in trust by the lender to pay for real estate taxes and insurance.
  • Contingency: A condition that must be met before a contract is legally binding. In the case of real estate transactions contingencies can include home inspections, repairs to the property, or the removal of certain items from the premises before the contract is legally binding.
  • Deed: A legal document assigning the title to a property.
  • Default: Failure to make a mortgage payment within the time period specified by the mortgage.
  • Earnest Money: Deposit given to the seller by the buyer when a purchase agreement is signed. The deposit is applied to the sale of the home. Earnest money can be lost if the buyer does not purchase the house or if they default on the purchase agreement.
  • Easement: A right of way giving individuals other than the owner access to or over a piece of land or property.
  • Equity: An owner’s financial interest in a property. Technically, equity is the difference between the fair market value of a property and the amount still owed on its mortgage and other liens.
  • Escrow: An item of value deposited with a third party to be delivered after a condition or transaction has taken place between two or more interested parties. In real estate transactions this involves the deposit, referred to as the earnest money, being put into escrow until the transaction is closed.
  • Estate: The total of all real property and personal property owned by a person at the time of their death.
  • Fair Market Value: The highest price a willing buyer would pay and the lowest price a willing seller would accept for an item of value.
  • Lien: A legal claim against a property that must be paid off then the property is sold. A mortgage is the most typical type of lien involved in real estate.
  • Loan Commitment: A written promise by the lender to make a loan under certain terms and conditions such as rate and fees.
  • Mortgage Discount "Points": Points are a one-time charge by the lender. In effect, it increases the yield. One point refers to 1.0%.
  • Owner Financing: A situation in which the property seller provides all or part of the financing to the property buyer.
  • PMI (Private Mortgage Insurance): PMI may be required on a mortgage with a low down payment where the LTV(Loan to Value) is less than 80%.
  • Refinance Transaction: The process of paying off one loan with the money received from a new load using the same piece of property to secure the new loan.
  • Title: A legal document stating a person’s ownership rights to a piece of property.

More Real Estate Terms

For a more complete list of real estate and financial terms visit:

Asheville Real Estate Directory Listings

Agencies and Agents Appraisers Architects
Commercial Communities Condos
Developers Home Inspectors Land
Land Surveyors Mortgage Brokers Property Management
Retirement Communities    

Asheville Real Estate Home

Home  |  About  |  Features  |  Mountain Living  |  A & E  |  Recreation  |  Food  |  Directory  |  Resources |  Login  
Real Estate Terms
Charles Haag - Prudential Lifestyles
Charles Haag - Prudential Lifestyles
Broker: Residential / Land / Relocation
A Fine Home Specialist
Prudential Top Producer in 2008! 
Baxter & Associates Real Estate
(828) 545-1256
Baxter & Associates Real Estate
Why Live Anywhere Else?
Think Asheville
Think Bobbie Baxter