first-time home- buyer online seminar · 6/23/2020 · the first step to housing success 6/23/2020...

The first step to housing success 6/23/2020

First-Time Home-

Buyer Online Seminar

Presented by Housing & Community Initiatives,

Inc. and its Volunteer Instructors

640 E Diamond Ave Ste C

Gaithersburg, MD

20877 www.hcii.org

(301) 590-2765

http://www.hcii.org/

First Time Home-Buyer Seminar The first step to housing success

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First-Time Home-Buyer Seminar(Electronic Version)

Presented by

Housing & Community Initiatives, Inc.

and its Volunteer Instructors

640 E Diamond Ave Ste C

Gaithersburg, MD 20877

www.hcii.org

(301) 590-2765

© 2020, all rights reserved 6/17/2020 12:51 PM

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The first step to housing success

Welcome & Introductions

The Key ConceptsGetting Ready

Financing

The Home

The Settlement/Closing

Questions, Resources,

Evaluations & Certificates

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Session Overview

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REGISTRATION

INSTRUCTIONS

At the end of the class you will be given a

six (6) digit code.

Please contact Housing & Community

Initiatives (HCI) to receive your certificate.

[email protected]

301-590-2765

You will need to provide the nine (9)

digit code when you contact HCI.

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About HCI


(HCI) is an organization dedicated to

helping families achieve their home

ownership goals by providing education.

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About HCI

HCI instructors do not take the place of

the realtor, loan officer, inspector, or

settlement agent with whom you already

have working relationships.

HCI instructors cannot answer detailed

questions about specific loan

programs or your individual

circumstances.

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Getting Ready

Financing

The Home


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Key Concepts

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Budget & Credit Management

Things to Know Before you Shop…

Getting Ready

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Getting Ready

Reason to Buy …

Build Wealth through Home Appreciation

Forced Savings Through Mortgage Payments

Income Tax Advantage

Stability & Security

Personal Satisfaction

Pride of Ownership

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Getting Ready

Budgeting & Credit Management …

Understand how you are managing

debt/credit (money owed)

How much do you owe?

What is your record of payment?

Free Credit Reports

www.annualcreditreport.com

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Getting Ready

Budgeting & Credit Management …

Some Rules of Thumb

What’s an acceptable Credit Score?

Manageable Expense to Income Ratios.

Housing

Other Debt

Realistic Savings Goals.

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Getting Ready

Know your Responsibilities …

Educate yourself, ask questions, understand

before you sign!

Stay involved and on top of the process.

Be honest – do not misrepresent your

intentions or financial status.

Communicate, be responsive.

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Getting Ready

Know the available resources…

Affordable housing programs

Moderately-priced Dwelling Units (MPDU)

MPDU Orientation Seminar

Market Priced Properties

Mortgage programs for qualified buyers.

Closing Cost Assistance loans

and grants.

11See Resource Guide in back of hand-out.

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Getting Ready

Things to Know Before You Shop…

Your Home Buying Team

Loan Officer (or Lender).

Real Estate Agent (or Realtor).

Settlement Agent (or Title Company).

Inspector(s).

Insurance Agent.

Others behind the scenes.

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1. Education

2. Loan Pre-Approval

3. Research Available

Resources

4. Home Search

5. Contract Negotiation

6. Due Diligence

7. Get Loan Commitment

8. Settlement

Before You Shop…

Know the Process

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Getting Ready

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Pause for Questions


Please use the chat icon for

questions.

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Sources of Financing

Choosing a Lender

Types of Loans

Understanding Loan Terms

What Lenders Consider

Mortgage Application Process

Financing

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Sources of Financing

Banks

Credit Unions

Mortgage Companies

Housing Opportunities Commission (HOC)

Maryland Mortgage Program (MMP)

Financing

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Choosing a Lender – some tips

Start with:Referrals from realtors, friends, family or

Established banking relationship or credit union or

Participating Lenders (HOC, CDA/MMP, REACH)

Then look for:Knowledge of special programs for

first-time buyers and

Willingness to listen, advise, help.

Financing

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Types of Loans

Conventional Fixed

Adjustable

Government-Insured

(FHA, VA, USDA)

Financing

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See Signs of Predatory Lending in back of hand-out.

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Loan Terms to Understand

Interest Rate – Fixed or Adjustable?

Origination Fee? Discount Point(s)?

What is Amortization?

Loan Term – 15, 30, years?

Prepayment Penalties?

What is Loan-to-Value?

Financing

19See Glossary in back of hand-out.

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Loan Terms to Understand (continued)

What is PITI?

What are Escrow Accounts?

What is Mortgage Insurance?

Financing


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Loan Terms to Understand (continued)

What is Pre-Approval?

What is Underwriting?

What is Loan Commitment?

What’s Loan Estimate?

Financing


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What Lenders Consider

Credit Report – affects terms of loan

Track record in paying obligations

Alternative Credit

Rent

Utility bills

Cell phone bills

Other regular monthly payments

Financing

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What Lenders Consider (continued)

Debt – affects buying powerInstallment loans

Credit cards

Line of credit

Student loans

Alimony/Child Support

Financing

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Income – affects buying power

Salary/Hourly

Overtime/Bonus Pay

Two Years’ History of Commissions/Self-

employment

Two Years’ History Second Job

Alimony/Child support

Financing

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Financing


Assets – savings for down payment

Savings and Checking

Investments

Gifts or Grants

Cash value of life insurance, 401K

Cash reserve

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The Property:

Appraisal – independent valuation

For Condominiums & HOAs:

Hazard/Master Insurance

Owner Occupancy Ratio

Delinquencies

Financing

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Mortgage Application Steps

1. Interview – phone or in person

2. Review Credit Report

3. Pre-approval, automated underwriting

4. Documents from Applicant:

Income: Pay Stubs, W-2s, Tax Returns

Assets: Bank Statements, Gift Letter

Alternative Credit Documentation

Financing

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Mortgage Application Steps (continued)

5. Appraisal

6. Submit package to underwriting

7. Loan Commitment or Denial

8. Coordinate with Settlement Agent

Financing

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Pause for Questions



questions.

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Choosing a Realtor

Find the Best Value for You

The Contract of Sale

Due Diligence

The Home

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Choosing a Realtor – some tips

Start with:

Referrals from lender, friends, family or

Ones you have met at Open Houses

Then look for:

Knowledge of special programs for

first-time buyers, areas of interest, and;

Willingness to listen, advise, help.

The Home

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Choosing a Realtor (continued)

Note: There are two types of agents:Buyer Agent - Buyer Agency Agreement

Agent works for YOU

Seller/Listing Agent

The Home

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Finding the Best Value for YouSet your criteria

Distinguish Needs vs. Wants

Prioritize the trade-offs:

Price

Location preferences

Size, features & style

The Home

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Finding the Best Value (continued)

Consider these factors:

Transportation

Schools

Community Amenities

Accommodations for disabilities (if needed)

Set your own pace

The Home

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Finding Homes to Tour

From your Agent

For Sale Signs

Open Houses

Newspapers

Internet

Word of Mouth

The Home

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Making the Choice

Keep records of homes seen to avoid

confusing one with another

Rate each against your own criteria

See “enough” homes

Develop your own sense of value

Re-visit the homes of interest

The Home

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The Contract of Sale

Making an Offer – the Terms

Sales Price

Settlement Date

Earnest Money Deposit

Seller Concessions

Contingencies:

Financing & Appraisal

Inspections

Document Review

The Home

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The Contract of Sale (continued)

Making an Offer – the Presentation

Written Offer on Standard Contract Forms

All Seller Disclosures Acknowledged

Accompanied by Financial Disclosure

and Pre-Approval Letter

Copy of Earnest Money Check or

Promissory Note

Delivered to Seller or Sellers’ Agent

The Home

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Basic Contract Concepts

Verbal offers not binding – get it in writing.

Written contracts are legally binding – know

what you’re signing.

All Contingencies have time limits – pay close

attention.

Get copies of everything you sign.

Ratified - “signed, sealed, delivered.”

The Home

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Negotiation Tactics

Let your agent (and your written offer)

speak for you.

Remain objective – don’t let it get “personal.”

Remember your priorities.

Be prepared to respond in a timely

manner.

The Home

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What Sellers Consider

Net Proceeds Is price right?

What about seller concessions?

Settlement Date

Risk Is financing solid?

Timeframe on contingencies reasonable?

The Home

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The Counter Offer

Serves to reject and nullify original offer

Made in Writing

Binding if signed by both parties

Can be withdrawn at any time before

“ratification”

The Home

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Due Diligence

Review all Disclosures:

Seller’s Property Condition Disclosure

Lead Paint Disclosure (pre 1979)

Master Plan

Regulations, Easements & Assessments

Estimated Taxes

Utilities

The Home

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Due Diligence (continued)

Get a Home Inspection!

General – electrical, plumbing, mechanical,

etc.

Structural (if indicated)

Termite

Hazardous Materials

Lead

Radon

Mold

The Home

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Due Diligence (continued)

HOA/Condo Doc Review- Statutory

Fees, Special Assessments

Unit-Owner’s Utility Statement

Rules & Regulations

Bylaws

Master Insurance Coverage

Repair/Replacement Reserve Funding

Investor Ratio & Delinquencies

The Home

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About Common Ownership

CommunitiesTypes

Home Owner Associations (HOAs)

Condominium Associations

Are regulated by State & County Statutes through County Commision of Common Ownership(CCOC).

The Home

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About Common Ownership

Communities (continued)

Have Governing Documents

Master Deed – Covenants & Restrictions

Bylaws – Rules for Governance

Rules & Regulations for residents & owners

Levy Fees for Common Expenses

Can place a lien on your property, enforce rules, assess fines

The Home

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Pause for Questions



questions.

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Preparing For Settlement

Role of the Settlement Agent

What is Title Insurance?

Forms of Ownership

The Closing Documents


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Preparing For Settlement

Earnest Money is Deposited!

Select Settlement Agent – ask realtor or lender for recommendation

Certified Funds/Cashier Check

Wire Transfer of Funds


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Preparing For Settlement (continued)

Maintain Credit/Financial Status

Give notice to your landlord

Contact utility companies, USPS

Arrange your move

Final Walk-thru


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The Settlement Agent’s Role

Order Title Search & Survey

Obtain Title Insurance Binder

Provide Information to Lender to complete

approval

Prepare Deed of Conveyance

Prepare Closing Disclosure

– Cash to Close


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The Settlement Agent’s Role (continued)

Conduct SettlementExplain all charges on the Closing Disclosure

Explain Note (promise to pay) and Deed of Trust

Collect Funds from Purchaser, Lender

Pay off Sellers’ liens, record release

Disburse funds (per contract)

Record new owner at courthouse


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What is Title Insurance?

Protects an owner's or a lender's financial

interest against loss due to title defects.

Required by the Lender

Premium charges are regulated

May be eligible for “re-issue”

rate

One-time Payment (made by the buyer)


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Forms of Ownership

Tenants in Common

Joint Tenants, Right of Survivorship

Tenants by the Entirety

Unmarried Man

Unmarried Woman


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The Closing Disclosure must be received by the

borrower no later than 3 business days prior to

settlement.

The consumer is considered to have

received the CD (3)days after it is mailed.

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The Closing Disclosure

Settlement Charges

Lender fees

Attorney fees, Title Insurance

Transfer Taxes & Recording Fees


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The Closing Disclosure (continued)

Prepaid Expenses, Adjustments

Real Estate Taxes

Hazard Insurance

Interest

Condo Fees & Assessments

Escrow Account Funding

Front Foot Benefit


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The Closing Disclosure (continued)

Credits

Net Loan Amount

Earnest Money/Deposit

Seller Subsidy for Closing Costs (if any)

Grants & Assistance Programs (if any)

Other Adjustments/Gifts (if any)


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Other Important Closing Documents

The Note (Promise to Pay)

describes terms of the loan

The Deed of Trust

Authorizes trustee (lender) to foreclose on

default

Deed of Conveyance

Signed by Seller Only

Transfers Ownership


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Pause for Questions



questions.

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After you Buy

Reference Materials

Questions

After You Buy

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Keep Good RecordsReceive Recorded Deed &

Title Insurance in the Mail.

Save all Settlement Documents in Safe Place.

Save all home improvement/maintenance records.

Income Tax Considerations

Consider Itemizing

Consider modifying withholding

After You Buy

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Budget Considerations

Pay Mortgage and Condo/HOA

Fees

Maintain Savings

Budget & Save for:

Future Repairs & Maintenance

Other non-monthly expenses

(e.g. auto insurance)

Desired Home Improvements

After You Buy

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Participate!Chances are, you will be part of a common

ownership community such as Condominium or a

Home Owners Association (HOA):

Know how your community is governed

Pay your Fees

Serve if you can

Vote!

After You Buy

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Resist !As a new owner, you will automatically get

MANY offers in the mail:

Many look official and related to your loan. Be careful, it

may be a scam!

Many offer you things you probably don’t need such as

mortgage protection. Other forms (such as life insurance)

may be better options for you.

And others may simply be tempting offers

from home goods stores. Take care not to

over-spend.

After You Buy

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Get Help!If you have trouble making payments, get help early:

Contact your Mortgage Company

Use Community Resources such as bona fide credit

counseling agencies.

Don’t Delay!

After You Buy


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Your handout includes the following

reference materials: Budget Worksheet

HOC, MPDU, CDA, REACH Program contact information

Signs of Predatory Lending

Glossary of Terms

Reference Material


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Pause for Questions



questions.

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Session Review The Quiz !



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FTHB Quiz One important thing to check when getting ready

to buy a home is your credit history by going to

Annual Credit Report.com (True or False)?

Earnest money is cash the seller of a property

pays the real estate agent for helping them sell

their home? (True or False)

Settlement and closing are the same thing and

are when the seller and buyer sign the papers

finalizing the transfer of ownership of the

property? (True or False)

The title search is when the settlement agent

drives by the property to verify it is still there?

(True or False)


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FTHB Quiz Joint tenants is the type of real estate ownership

where if one of the joint owners dies, their share

of ownership goes to the remaining joint

owners. (True or False)

An escrow account is a savings account

maintained to pay future bills, such as property

taxes and hazard insurance. Often a mortgage

company will require such an account for the

homeowner (True or False)

A deed of trust is a legal document that shows

that County and State governments trust that

you will pay your taxes. (True or False)

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Thank you for attending!

Receive your Six (6) digit

code

Contact HCI for your FTHB

Certificate

programcoordinator@

hcii.org

301-590-2765

Present your nine (9) digit

code

Your FTHB certificate will

be emailThe first step to housing success

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Budget Worksheet

Where does your money go? Consider all of these categories!

Housing

Rent or PITI $

HOA/Condo Dues $

Utilities (electric, gas, water/sewer) $

Trash Removal (if not in HOA/Condo Dues) $

Insurance (if not in PITI)* $

Home Maintenance/repairs * $

Telephone (1st

line) $

Transportation

Gas/Public Transit/Taxi, Parking $

Car/Truck Payment $

Insurance* $

Car registration * $

Car repairs and Maintenance * $

Insurance - Health, Life, Disability * $

Child Care

Day Care/Sitters $

Child Support/Alimony $

Diapers, etc. $

Food

Groceries $

Toiletries $

Lunch at Work/School $

Medical *

Doctor Visits/Co-Pay $

Dentist Visits $

Prescriptions $

Glasses $

Clothing

Clothes * $

Laundry/Dry Cleaning $

Note: For expenses that do not occur

monthly, estimate your annual expense

and divide by 12.

Budget Worksheet (continued)

Education *

Tuition$

Books/Supplies


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$

Lessons (sports, music, dance) $

Gifts *

Birthdays $

Major Holidays $

Personal

Barber/Beauty Shop* $

Cigarettes, Beer, Wine Liquor $

Entertainment

Cable TV $

Internet Access $

Movies, Sporting Events, Concerts, CDs, etc. $

Restaurants $

Fitness/Social Clubs $

Vacations/Trips* $

Gambling/Lottery Tickets $

Hobbies & Crafts $

Pet Care/Supplies $

Additional Cell Phones $

Debts

Student Loans $

Credit Card Minimum Monthly $

Past Medical Bill/Judgments $

Personal Loans $

Note: For expenses that do not occur

monthly, estimate your annual expense

and divide by 12.

TOTAL $ How does this compare with your average

monthly take-home pay?

How will changes in your housing expense category

affect your other expenses?


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Moderately Priced Housing Program (MPDU)

Montgomery County's Moderately Priced Dwelling Unit (MPDU) Program offers affordably priced

townhomes and condominiums – both new and resale – to first-time homebuyers who have a

moderate household income.

ALTERNATIVES:

In addition to the County MPDU Program, there are

also programs run by the cities of Rockville &

Gaithersburg. Use the following contact information

for these programs:

City of Rockville: (240) 314-8218

www.rockvillemd.gov/residents/MPDU

City of Gaithersburg (301) 258-6310

www.gaithersburgmd.gov

These are separate programs and may have entirely different rules and eligibility criteria.

For more information, contact:

Montgomery County Department of

Housing & Community Affairs (DHCA)

1401 Rockville Pike, 4th Floor

Rockville, MD 20852

Contact 311 with questions

http://www.rockvillemd.gov/residents/MPDU

http://www.gaithersburgmd.gov/

http://www.montgomerycountymd.gov/mpdu


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HOC Mortgage Purchase Program

The Housing Opportunities Commission (HOC) First Trust Mortgage Purchase Program (MPP)

provides below-market rate mortgages to first-time homebuyers of moderate income.

You can work with a realtor, or work directly with the owner or builder, to find a home in Montgomery

County that falls within the amount you can afford (the results of getting pre-approved or pre-qualified

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Housing Opportunities Commission (HOC)

10400 Detrick Avenue

Kensington, MD 20895

Phone: (240) 627-9400

http://www.hocmc.org/

First Time Home-Buyer Seminar



CDA Maryland Mortgage Program

The CDA Maryland Mortgage Program provides low-interest mortgage loans to eligible homebuyers

with low- to moderate-income households through private lending institutions throughout the State.

The Program is targeted primarily to first-time homebuyers, and can assist second time homebuyers

to buy in targeted areas.


Single Family Housing Community Development Administration

Dept of Housing and Community Development

100 Community Place

Crownsville, MD 21032-2023

Phone: 410-514-7530

Toll Free: 800-638-7781

http://www.morehouse4less.com/




Rockville R.E.A.C.H. Program

R.E.A.C.H. is a joint venture between the City of Rockville and Housing & Community Initiatives, Inc.,

a nonprofit charitable organization. R.E.A.C.H. is structured to assist applicants with loans for down

payment and/or closing costs assistance that will enable them to become homeowners in Rockville.

Applicants must meet the program criteria, qualify for a home mortgage and be able to repay the

R.E.A.C.H. Loan. This creates a revolving fund that is perpetually replenished.



640 E. Diamond Ave, Suite C

Gaithersburg, MD 20877

301-590-2765

http://www.hcii.org/




Recognizing “Predatory Lending” Practices

Predatory Lending encompasses lender practices and mortgage products that can endanger the

financial health and well-being of consumers. It can even result in someone loosing his home.

In particular, be alert and wary of these types of lender activities and tactics:

Lenders who call you at home on the telephone, or come to your door uninvited;

Lenders who keep calling you at home and won’t take no for an answer;

Lenders who are the sole suggestion of a home improvement contractor;

Lenders who solicit business via direct mail, fliers, the internet and television commercials;

Lenders who promise that bad credit is no problem;

Lenders who want to refinance your credit card debt into a first or second trust on your home;

Lenders who try to refinance your home mortgage often, but with no advantage to you;

Lenders who use pressure tactics and fast talking to get you to take their loan;

Lenders who say they can rescue you from financial trouble and can even prevent foreclosure;

Lenders who do not take the time to clearly explain the nature of a loan you are taking out;

Lenders who scare you into settling on a loan with threats that you must go through with it;

Lenders who discourage you from having a trusted third party review the mortgage documents with you or from accompanying you to the settlement.

And, be alert and wary of these types of mortgage products and features:

Loans with no review of your new house payment in relation to your income. These loans only look at the value of your home and not your ability to make the new payments.

Loans with a single-premium credit life or disability insurance policy. These add unnecessary principal to your loan amount. Only take out this type of insurance if it is separate from your mortgage and the payments are made on a monthly basis.

Loans with prepayment penalties. These can hinder you in refinancing to get lower rates and better terms in the future.

Loans with balloon payments (call features). These payments are a lump sum payment required of the homeowner at a specific date. They can often be large and unplanned for. Homeowners can be caught with a huge payment due when they cannot afford it or are unable to refinance their loan to accommodate this payment.

Loans with adjustable rates with frequent changes and with no caps or restrictions on the adjustments.




Loans with negative amortization. These loans charge a certain interest rate each month, but require you to only pay a portion of this charge when you make your payment. The result is that the extra unpaid interest is added to the amount of your loan. With this you can owe the lender more than you initially borrowed from them.

Loans with mandatory arbitration clauses that require you to agree to resolve any and all disputes arising out of the loan through arbitration before you get the loan. This unfairly restricts your legal rights, if you are a victim of abusive lending practices.

Also, be alert and wary if you fall into one or more of these categories:

You are elderly and live alone;

You are unfamiliar with the mortgage process and find it confusing;

You do not understand the financial terminology used;

You have limited reading skills;

You are a low-income family;

You are a woman;

You are a minority;

You live in a minority community;

You are a new immigrant;

You have suffered a financial crisis recently, such as loss of a job, illness, death or divorce;

You are at home during the day;

You live on a limited fixed income;

You own your home outright with no mortgage;

Your English language skills are limited and someone offers to take care of everything for you, but does not clearly explain the details to you.




Glossary of Terms Abstract (Of Title)

Report of Title Search by Abstractor for examination by Title Attorney

Acceleration Clause A clause in the Mortgage Note stating that loan balance is due in full following default

Agreement/Contract of Sale Contract between buyer and seller for sale of real estate. Must be in writing to be enforceable

Amortization Process by which a loan is paid in full over a specified number of periodic payments

Appraisal Determination of value of property by licensed Appraiser

Appreciation The value of the property increases

Assumption of Mortgage Buyer assumes existing indebtedness on property

Broker (See Real Estate Broker or Mortgage Broker)

Building Line or Setback

County requirement for distance from boundary to structure

Closing Costs Cost of transferring property- legal fees, county/state transfer fees, lender fees

Closing/Settlement Day Day that ownership transfers – seller signs Deed of Conveyance, buyer pays purchase price

Cloud (On Title) Unpaid tax liens, judgment liens

Commission Fee for sale of real property under listing agreement or exclusive buyer broker retainer agreement

Condemnation County declaration of unsafe property

Condominium A property that is part of a common ownership community in which the purchaser owns a unit and an undivided interest in the common areas such as lobby, recreation facilities, etc.

Contract of Sale

A signed agreement between purchaser and owner to transfer ownership at a specified future date for specified amount of money.

Contractor Licensed Construction Company, electrical, plumbing, roofing.

Conventional Mortgage Mortgage loans not insured by FHA or guaranteed by Veterans Affairs

Cooperative Housing Property owned by corporation and shares owned by residents who are tenants of the corporation

Deed of Conveyance A document signed by the seller that transfers title (ownership) to a property and is recorded at the Court House

Deed of Trust A document signed by the purchaser that gives the Mortgagee (lender) the right to foreclose in the event of Default.

Default Mortgagor (purchaser) Mortgage fails to re-pay the loan as agreed

Depreciation Value of property decreases

Documentary Stamps State tax on transfer of real property

Down Payment That portion of the sales price paid in cash by the purchaser at settlement

Earnest Money Deposit held in escrow until settlement - given by purchase in consideration of seller’s agreement not to sell the property to anyone else in the interim – and applied toward down payment at settlement.

Easement Rights Right-of-way for government, utilities or other access

Encroachment Part of building, fence or other structure that intrudes on property




Encumbrance Property interest or lien on property

Equity Owner’s interest in property usually calculated as market value minus mortgage balance

Escrow Depository account for earnest money held in trust until settlement. Also money held by lender to pay taxes and insurance

Foreclosure Process by which mortgagee can take property on which the owner has defaulted on the payment

General Warranty Deed A deed which conveys the grantor's interests in and title and warrants good title free of defects

Grantee Buyer of property

Grantor Seller of property

Hazard Insurance Insurance for fire and other casualties

HUD U.S. Department of Housing and Development, enforces federal housing laws

HUD-1 A uniform Settlement Statement or account of all funds in a transaction

Interest Charge paid by borrower to lender of money usually expressed as a percent of value per annum

Lien Claim filed against deed on property for money owed

Loan Funds given in exchange for a promise to pay (see Mortgage Note and Mortgage)

Loan Officer The individual within a Financial Institution or Mortgage Broker that interfaces with borrower to originate a loan.

Marketable Title Title is free of liens and encumbrances

Mortgage A lien against property for which money is borrowed

Mortgage/Loan Commitment

Approval of loan after all information has been verified

Mortgage Note Agreement to repay a loan under specified terms

Mortgagee Lender of money secured by property

Mortgagor Borrower of money secured by property

Plat Map or drawing showing boundaries, easements, location of structures

Points A specified percentage of loan amount paid to lender as a fee at settlement

Mortgage Broker An individual or company that earns a fee for originating a loan with a financial institution on behalf of a borrower

Mortgage Insurance Premium Fee paid by borrower to HUD to pay for cost of FHA mortgage insurance

Prepayment Payment of mortgage principal before due date

Principal Mortgage loan balance owed

Purchase Agreement See Contract of Sale

Real Estate Broker Person licensed to engage in helping buyer or seller buy or sell

Refinancing Obtain new mortgage loan and pay off old one

Restrictive Covenants Private restrictions limiting use of property

Sales Agreement See Contract of Sale

Special Assessments Periodic or one time charge to owners to pay for improvements in common ownership communities

Special Lien A lien against a specific piece of property, not all property




State Stamps Transfer taxes paid to state or county to transfer property

Survey Drawing of boundaries of lot, situate of improvements, if any, and easements

Tax (Real Estate) Fee levied by government against property owners, normally annually

Title Ownership of property

Title Insurance Insures property owner for claims against the title

Title Search or Examination Search land records for liens or encumbrances against title

Trustee A party who is given legal responsibility to hold property in the best interest of or "for the benefit of" another.

Zoning Ordinances The acts of an authorized local government establishing building codes, and setting forth regulations for property land usage.