If you’re thinking about buying or selling a home in California, it’s always wise to seek assistance from a certified real estate agent. At American Dream Realty in Woodland Hills, we understand how challenging it can be to navigate the real estate market on your own. That’s why, in part two of this blog series, we will discuss some common real estate terms that you should be aware of.
- Mortgage Insurance – A very important part of the loan process, mortgage insurance is a contract used to insure the lender against loss caused by a mortgagor’s default on a government mortgage or conventional mortgage. Depending on the type of insurance, it may cover a percentage of, or all of the mortgage loan.
- Insurable Title – This is a property title that a title insurance company has agreed to insure against any defects and disputes.
- Real Estate Settlement Procedures Act (RESPA) – This is a consumer protection law that requires lenders to give borrowers advance notice of any closing costs.
- Point – A point is a one-time charge by the lender for originating the loan. It is often one percent of the amount of the mortgage.
- Joint Tenancy – This is a form of co-ownership that gives each tenant equal interest and equal rights on a property.
- Public Auction – A public auction is a meeting in an announced public location to sell property to repay a mortgage that is in default.
- Insurance Mortgage – This is a type of mortgage that is protected by the Federal Housing Administration (FHA) or by a private mortgage insurance (MI). If the borrower defaults on a loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.
- Lien – This is a legal claim against a property that must be paid off when the property has been sold.
- Qualifying Ratios – These are calculations that are used to help determine whether a borrower can qualify for a mortgage. They often consist of two separate calculations: a housing expense as a percent of income ratio, as well as total debt obligations as a percent of income ratio.
- Forfeiture – A loss of money, property, rights, or privileges due to a breach of legal obligation.
- Power of Attorney – A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to certain acts for specific periods of time.
- Promissory Note – This is a written promise to repay a specified amount of money of a certain period of time.
- Radon – A radioactive gas that can be found in some homes. In sufficient concentrations, this gas can be very harmful and can lead to health issues.
- Title – A title is a legal document evidencing a person’s right to or ownership of a property.
- Title Insurance – As you may have guessed, title insurance protects the lender or the buyer against any losses arises from disputes over ownership of the property.
We hope these terms and definitions help you along your home buying or home selling process. If you’re looking for a qualified real estate agent in California, contact American Dream Realty today!