Buying Home First Time,

FRAUD
Any form of deceit, trickery, breach of confidence or misrepresentation by which one party attempts to gain some unfair or dishonest advantage over another.

COMMITMENT
A promise to lend and a statement by the lender of the terms and conditions under which a loan is made.

MORTGAGE BANKER
An individual or company that originates and/or services mortgage loans.

BREACH OF CONTRACT
Violation of any of the terms or conditions of a contract without legal excuse; default, non-performance, such as failure to make payment when due.

PARTITION
The dividing of common interests in real property owned jointly by two or more persons.

TAX LIEN
Claim against a property for unpaid taxes.

COMMISSION
The compensation paid to a real estate broker(usually by the seller) for services rendered in connection with the sale or exchange of real property.

MORTGAGE BROKER
A person or firm which acts as an intermediary between borrower and lender; one who, for compensation or gain, negotiates, sells or arranges loans and sometimes continues to service the loans.

MORTGAGE NOTE
Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage or deed of trust or other security instrument.

IMPOUND ACCOUNT
A trust account established to set aside funds for future needs.

CAP RATE (CAPITALIZATION RATE)
The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital.

FAIR MARKET VALUE
The highest monetary price which a property would bring, if offered for sale for a reasonable period of time in a competitive market, to a seller who is willing but not compelled to sell, from a buyer, willing but not compelled to buy, both parties being fully informed of all the purposes to which the property is best adapted and is capable of being used.

LEASE
A lease is both a contract between lessor (landlord)and lessee (tenant) and a conveyance or demise of the premises by the lessor to the lessee. A lease is a contract in that item bodies the agreement between the parties.

LEGAL NOTICE
That notice which is either implied or required by law. Constructive notice under the recording laws is also referred to as legal notice.

PRIVATE MORTGAGE INSURANCE (PMI)
Insurance to protect the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home's purchase price. (Note, however, that FHA and VA loans have different insurance guidelines.)

OPTION
An agreement to keep open, over a set period, an offer to sell or purchase property.

VALUE
The power of a good or service to command other goods in exchange for the present worth of future rights to income or amenities; the present worth to typical users and investors of future benefits arising out of ownership of a property.

AGENT
One who is authorized to represent and to act on behalf of another person (called the principal). A real estate broker is the agent of his client, be it the seller or buyer, to whom he owes a fiduciary obligation. A salesman is the agent of his broker and does not have a direct personal contractual relationship with either the seller or buyer.

PACKAGE MORTGAGE
A method of financing in which the loan that finances the purchase of a home also finances the purchase of personal items such as a washer and dryer, refrigerator, stove and other specified appliances.

BUILDING PERMIT
A written permission granted by the County Building Department and required prior to beginning the construction of a new building or other improvement (including fences, fence walls, retaining walls and swimming pools).

NOTICE OF COMPLETION
Document filed to give public notice that a construction job has been completed and that mechanics' liens must be filed within ,say, 45 days to be valid.

PRINCIPAL
The amount of debt, not counting interest, left on a loan.

DEBT SERVICE
The amount of money needed to meet the periodic payments of principal and interest when a debt is amortized.

DISCRIMINATION
The act of making a distinction against or in favor of a person on the basis of the group or class to which the person belongs; the failure to treat people equally.

DEED
Legal document by which title to real property is transferred from one owner to another. The deed contains a description of the property, and is signed, witnessed, and delivered to the buyer at closing.

FINANCIAL STATEMENT
A formal statement of the financial status and net worth of a person or company, setting forth and classifying assets and liabilities as of a specified date.

REFORMATION
A legal action to correct or modify a contract or deed which has not accurately reflected the intentions of the parties due to some mechanical error, such as a typo graphical error in the legal description.

COOPERATING BROKER
A broker who joins with another broker in the sale of real property.

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