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    Don’t let these Real Estate Terms Scare You

    Appraisal – A professional appraiser’s opinion of property value.

    Certificate of Title – document that ensures the property is legal.

    Closing Costs – fees and expenses associated with sale/purchase of a home.

    Contingencies – Conditions that must be met, for the offer on a home to proceed.

    Earnest Money Deposit – payment made to the seller with the offer to show serious intention.

    Escrow Period – The time between offer acceptance and closing.

    FICO Score – Credit score, the higher the score the better

    HOA – Home Owners Association: the organization that determines community rules and standards.

    Mortgage – The home loan.

    Prequalification – The process to determine if a borrower is qualified for a loan before writing an offer – amount is approximate.

    Payment Terms – principal, interest, taxes, PMI, etc.  All the buyer really needs to know is the monthly and cumulative costs.

    Loan to value –a ratio shown as a percentage.  It is the ‘appraised value’ of the home V.S. the loan against the property. EG: 80% LTV would mean you have an 80% loan on the property when compared to the appraised value.

    PMI – Private Mortgage Insurance: a type of insurance you might be required to pay if you have a conventional loan with less than 20% down. It protects the lender in case the buyer stops making their payments.

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