East Oregonian : E.O., April 21, 2017, Page 9M, Image 25

April 2017 // Real Estate & Home Builders Guide // 9M
Home Buyer's
Glossary
Adjustable-rate Mortgage (ARM) - A mortgage for
which the interest rate and the payments change during the
life of the loan.
Agreement of Sale - The contract in which the seller
agrees to sell and buyer agrees to buy, with conditions and
terms spelled out and signed by both parities.
Federal National Mortgage Association (FNMA or
Fannie Mae) - A privately owned and managed corporation
that purchases mortgage loans originated by other lenders.
Fannie Mae issues stocks and securities to obtain funds for
its purchases.
Fixed-Rate Mortgage - A loan that has one set interest
rate. Installment Debts - A buyer's long-term debts; they usually
extend for periods longer than nine months.
Amortization - A plan for gradually repaying, in periodic
payments, money borrowed.
Intermediate-term Loan - A home loan of less than 30
years.
Balloon Mortgage - A mortgage that has a large amount of
the principle due at the time of maturity.
Bridge Loan - A loan that fi nances a mortgage at the end of
Life-of-loan Cap - A consumer protection on some adjust-
able loans. It limits the total upward adjustment that may occur
during the life of the loan. Also known as an overall cap.
one loan and the start of a new one.
Closing Costs - Expenses and fees that are added to the
price of the property, paid by the buyer and the seller at the
closing. The Agreement of Sale states who pays which costs.
Commercial Bank - A fi nancial institution authorized to
provide a variety of fi nancial services, including consumer and
business loans (generally short-term), checking services, cred-
it cards and savings accounts.
Loan-to-value Ratio - The relationship between the
amount of a home loan and the total value of the property.
Lenders may limit their maximum loan to 80-95 percent of
value.
Lock-in Rate - A rate commitment made by lenders when
making a mortgage loan to commit to or "lock in" that rate
pending loan approval. Lock-in commitment periods vary.
Condominium - The buyer owns title to a residential unit,
Market Value - The highest price the buyer is willing to pay
for a property and the lowest price the seller will accept.
shares common areas with other unit owners and pays main-
tenance fees to the condominium association for property
upkeep.
Mortgage - A lien or claim on property given by a buyer to a
lender as security for money borrowed.
Conventional Loan - A loan not guaranteed by the VA or
insured by the FHA.
Co-op - In exchange for the right to occupy a co-op unity, the
buyer owns shares in the co-op corporation (made up of co-op
residents), rather than owning real property.
Debt-to-income Ratio - A percentage arrived at by divid-
ing the borrower's fi xed monthly obligations by the borrower's
monthly income.
Mortgage Broker - An individual or company that obtains
mortgages for others by fi nding lending institutions, insurance
companies, or private lenders to lend money.
Payment Cap - Limits the amount that a monthly payment
on an ARM loan can increase at the time of adjustment.
Points - One percent of the amount of the mortgage loan.
Prepayment - Payment of a mortgage loan, or portion of the
loan, before the due date.
Due-on-sale Clause - A mortgage stipulation demanding
payment of the entire loan balance upon sale or other transfer
of the real estate securing the loan.
Equity - The ownership interest remaining in property after
Prime Rate - The interest rate that banks charge to their
preferred customers. Changes in prime rate are used as index-
es in some adjustable rate mortgages, especially home equity
lines of credit.
payment of all liens or other charges on the property.
Principal - The basic loan amount, separate from interest,
Escrow - Funds left in trust with a third party, to be paid to a
insurance, and taxes.
designated recipient at a designated time.
Private Mortgage Insurance (PMI) - The insurance
Federal Home Loan Mortgage Corporation (FHLMC
or Freddie Mac) - A quasi-governmental secondary market
agency that purchases whole mortgage loans. Freddie Mac
sells interest in pools of mortgage loans to obtain funds for
mortgage loan purchases.
coverage offered by a private company that protects a lender
against loss on a default mortgage loan. Its use is usually lim-
ited to loans with high loan-to-value ratios. The borrower pays
the premiums.
Title - Proof of ownership.
Federal Housing Administration (FHA) - A govern-
ment agency within the Department of Housing and Urban De-
velopment that administers many programs involving housing
loans made from private funds, including mortgage insurance
for lenders and rent or interest assistance for low-income ten-
ants and mortgagors.
Title Search - A check of title records to assure that the
A message from the
Umatilla County
Board of REALTORS®
Spring is here and now is the time to get out-
doors and pay attention to the exterior of your
home and your outdoor living space.
Here are some helpful hints on things to do;
• Have gutters cleaned of winter debris.
• Check roofi ng for any missing shingles.
• Open crawlspace vents for cross
ventilation.
• This is a good time to spray for wasps while it is still
chilly in the mornings.
• For the gardeners, this is a good time to weed the
garden, turn the compost and get the garden soil
ready for springtime planting.
• Organize your shed for easy tool access.
• Aerate your lawn, trim hedges, and prune trees so
that they're not touching the exterior of the home by
at least 6 to 8 inches.
•De-winterize your hose bibs and spray off those pati-
os, seating area and barbecues for outdoor fun.
• Remember to fi ll your barbecue tanks.
buyer is purchasing property with no liens, encumbrances, or
other claims which might adversely affect the title's value or
marketability.
Veterans Administration (VA) - A government agency
that helps veterans of the armed forces obtain housing.
Eastern Oregon
R eal E s tate
& H om ebu ilders G u ide
These are just a few suggestions that you may want
to pay attention to and now is a good time
because spring has sprung! Enjoy!
Umatilla County Board of Realtors
Marsha Morgan
2016-2017 President