Real Estate Terms and Definitions

Condominium A form of ownership in which individuals purchase and own a unit of housing in a multi-unit complex; the owner also shares financial responsibility for common areas. Fair market value The hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation. Interest rate The amount of interest charged on a monthly loan payment; usually expressed as a percentage. Appraisal A qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate. Flood insurance Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan. Fair Housing Act Equity An owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loon(s)from the fair market value of the property. Escrow account A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc. Discount point Normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan. Amenity A feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use; may be natural (like location, Woods, water) or man-made (like a swimming pool or garden).

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	Did You Know?
	Stopping foreclosure with Deed-in-lieu of foreclosure can be done This won't save your house, but it is not as damaging to your credit rating as a foreclosure. You can qualify if: you are in default and don't qualify for any of the other options,your attempts at selling the house before foreclosure were unsuccessful, and you don't have another FHA mortgage in default.