Financial Term Pre-approved is a Home Mortgage term used by
banks to determine what size of a loan an individual might be able
to afford. The individuals income, debt, and credit worthiness are
used in order to determine the mortgage amount.
Financial Term Income to debt ratio
Financial Term Income to debt ratio is a term used to state the ratio
of an individual's income to their amount of debt. This ratio is an
important tool used by Home Mortgage companies to determine how
much of a monthly mortgage an individual can afford.
Financial Term Interest is the amount of money added to the life
of a loan. Interest is charged for the use of the money over a
period of time. The total amount of interest charged will be
determined by the interest rate and the length of the loan.
Financial Term Conventional Loan is a Home Mortgage loan that is
not insured by a government agency. There are loans that are
insured by the government agencies such as Federal Housing
Association (FHA) and Veteran's Administration (VA).
Financial Term Capped Rate is a limit that is put on the interest rate
on Home Mortgage payments over the life of the mortgage. In an
Adjustable Rate Mortgage the rate can change but cannot exceed
the capped rate.
Financial Term Escrow is usually money held in trust by a third
party to be turned over to the grantee only upon fulfillment of a
condition. This could be proceeds from a loan closing that would be
held in escrow until a particular condition is met.
Home Equity Line of Credit
Financial Term Home equity line of credit is similar to a Home
Equity Loan except you do not pay interest on the money unless
you use it. The home owner is able to withdraw money as needed
and repay in order to maintain a certain amount of credit line.
Financial Term Offer
To make available, to express a willingness (whether in writing or orally), in the case of real estate, to inform another party
of your willingness to sell or buy a specific property on terms set out in your offer. An offer, once made, may be accepted
at any time before it is rescinded. Once accepted, the offer and acceptance generally form a binding contract.
Financial Term Lot Line
The legal perimeter of a parcel of property, often shown on a survey of the property
Financial Term First Lien
The registered legal claim which stands first in line to enjoy the proceeds of a sale of the property. Liens generally are
ordered according to time or registration but various statutes allow some liens (realty taxes) to jump to the head of the line.
Financial Term Jumbo Loan
A loan for more money than the Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation will fund under its mandate
Financial Term Flood Insurance
A policy of insurance that specifically covers damage due to flood waters, required in designated flood areas.
Financial Term Flip
The rapid turnover of a piece of property by one person who buys it for a certain price then sells it soon thereafter for
Financial Term Grace period
The time a borrower is allowed after a payment is due to make that payment without incurring penalties.
Financial Term Free and Clear
A description of title to property which is unencumbered and subject to no competing claims.
Financial Term Hazard Insurance
A type of insurance designed to cover damage caused by a peril specified in the policy of insurance (i.e. fire, flood, etc.).
Financial Term Home Owners Insurance
Liability coverage for property owners covering both loss and damage to property or dwelling and personal liability. The
premium on this type policy will depend on the value of the property and how much deductible is requested
Financial Term Market Value
An estimation of the price that could be obtained for a particular asset if it were sold in an arm's length transaction on the
Financial Term Metes and Bounds
An older way of describing land in registered instruments. Starting at a recognizable point (the meeting of two roads, the
corner of a lot), the description then describes the boundaries of the land by indicating distances and directions for each
boundary (i.e. "South 100 feet" or "South 73 degrees, five minutes west for a distance of 100 feet"), returning at the end
of the description to the beginning point.
Financial Term Fair market Value
The value of an item as established by a consideration of how much an independent buyer would pay to an independent seller in a completely free
transaction for the item.
Financial Term Landlocked
A term describing a property that does not border on any public road.
Financial Term Lease With Option
A rental contract which allows the tenant to purchase the property during the period of the lease. Payments under the lease may be credited (in whole or
in part) against the purchase price.
Financial Term Easement
The right of the owner of one parcel of land to use all or part of the land of another for a specific purpose. Requires one property to be in dominant
position so as to enjoy the benefit of the easement and one property in position to offer easement
Financial Term Escrow Account
A form of trust account in which advance payments are held on behalf of the payer until the contract allows their use by the payee or a third party.
Financial Term Legal Description
A description of a piece of real estate that is drafted according to legal requirements and which clearly and adequately establishes the identity of the
property so described. Found in most instruments for registration on title to land.
Financial Term Permit
A government body's written permission to do something which is regulated by that body.
Financial Term Financial Statement
A document which sets out the assets, income, expenses and debts of a person or company to allow a third person to assess that person or
corporation's financial health (i.e. when considering lending money to that person or corporation).
Financial Term Firm Offer
An offer to purchase delivered to the potential Vendor by a potential Purchaser who will not negotiate any changes to the offer.
Financial Term Plat
A detailed map which sets out lots, streets, common areas and other features of a tract of land.
Financial Term Principal-Interest
A blended, periodic payment that is enough to pay off accumulated interest and a portion of the principal.
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Category Construction Glossary