BUYERS` TERMS


LOAN AMOUNT

This is the amount of mortgage based on the final purchase price of the home, minus the down payment.

DOWN PAYMENT

Money that the buyer provides to the lender as their portion of the purchase price. This is considered the buyer’s equity, or cash investment, in their home.

POINTS

Fees charged by the lender to offset the interest rate – if below the prevailing market rate. One point equals one percentage point. For example, one point on a $100,000 loan would be $1,000.

APPRAISAL FEE

This is the amount paid for the lender’s appraisal of a property.

CREDIT REPORT FEE

A fee charged by the lender to obtain a credit report on the buyer.

TITLE INSURANCE FEE

A one-time premium the buyer pays for protection against loss or damage in the event of an incorrect search of public records or misinterpretation of title. The title insurance policy also shows if the property is subject to taxes, liens, deed restrictions, encumbrances, or easements. 

ESCROW FEE

The amount the buyer pays tothe escrow company or closing agent for preparing paperwork, accounting for all funds, and coordinating information between all parties involved in the sale ofthe property.

CLOSING COSTS

A general term for all of the estimated charges and fees associated with the transfer of property ownership.

PREPAID INTEREST

The amount of interest due on the loan during the time period between escrow closing and the first mortgage payment. This is due at the time of closing.

PITI

An acronym for Principal, Interest, Taxes, and Insurance. This is the estimated monthly house payment.

PRINCIPAL & INTEREST

Principal is the amount to be applied toward the balance of the loan, and interest is the amount charged to finance the loan.

TOTAL CASH REQUIRED

The total amount of cash the buyer needs, including down payment and closing costs.

PREMIUM MORTGAGEINSURANCE (PMI)

Insurance for the lender to cover potential losses if the borrower defaults on the loan.

 

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