Buying Home Vs Renting,

ANNUAL PERCENTAGE RATE (APR)
The cost of credit expressed as a yearly rate. The annual percentage rate is often not the same as the interest rate. It is a percentage that results from an equation considering the amount financed, the finance charges, and the term of the loan.

MORTGAGE
A legal document used to secure the performance of an obligation. In effect, the mortgage states that the lender can look to the property in the event the borrower defaults in payment of the note.

SURVIVORSHIP
The right of survivorship is that special feature of a joint tenancy whereby all title, right and interest of a decedent joint tenant in certain property passes to the surviving joint tenants by operation of law, free from claims of heirs and creditors of the decedent.

ABANDONMENT
The voluntary surrender or relinquishment of possession of real property with the intention of terminating one's possession or interest, but without vesting this interest in any other person.

TAX SHELTER
A phrase often used to describe some of the tax advantages of real estate investment, such as deductions for depreciation, interest, taxes, etc., which may offset the investor's other ordinary income to reduce the investor's overall tax payment.

AMORTIZATION
Repayment of a loan with periodic payments of both principal and interest calculated to payoff the loan at the end of a fixed period of time.

MARKETABLE TITLE
Good or clear title reasonably free from risk of litigation over possible defects; also referred to as merchantable title. Marketable title need not, however, be perfect title.

POINTS
A generic term for a percentage of the principal loan amount which the lender charges for making the loan; each point is equal to one percent of the loan amount.

VENDOR
The seller of realty. The seller under an agreement of sale.

LIBOR (LONDON INTERBANK OFFERED RATE)
The interest rate charged among banks in the foreign market for short-term loans to one another. A common index for ARM loans.

INCOME APPROACH
An approach to the valuation or appraisal of real property as determined by the amount of net income the property will produce over its remaining economic life.

APPLICATION FEE
Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.

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.

DURESS
Unlawful constraint or action exercised upon a person whereby he is forced to perform some act against his will. A contract entered into under duress is void.

BLUE SKY LAWS
State securities laws designed to protect the public from fraudulent practices in the promotion and sale of securities, e.g., through limited partnerships, syndications, bonds.

TOWNSHIP
A piece of property, used in the government survey system of land description, which is 6 miles square, and contains36 sections, each 1 mile square; and consists of 23,040 acres.

REAL PROPERTY
Land and any improvements permanently affixed to it, such as buildings.

LOAN APPLICATION FEE
Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.

CEILING
The maximum allowable interest rate of an adjustable rate mortgage.

METES AND BOUNDS
A common method of land description that identifies a property by specifying the shape and boundary dimensions of the parcel, using terminal points and angles.

WEAR AND TEAR
The gradual physical deterioration of property, resulting from use, passage of time and weather. Only property subject to wear and tear is depreciable.

ACCELERATION CLAUSE
A common provision of a mortgage or note providing the holder with the right to demand that the entire outstanding balance is immediately due and usually payable in the event of default.

ACCRUED INTEREST
Interest earned but not yet paid.

FHLMC
See Federal Home Loan Mortgage Corporation.

EASEMENT IN GROSS
The limited right of one person to use another's land (servient estate), which right is not created for the benefit of any land owned by the owner of the easement; that is, there is no dominant estate, as the easement attaches personally to the owner, not to the land.

LAND CONTRACT
Another name for an installment purchase contract, by which the buyer obtains equitable title (the right to use the property) while the seller retains legal title (recorded title)as security for payment of the balance of the purchase price.

PRORATE
To divide or distribute proportionately.

RECORDING
The act of entering documents concerning title to a property into the public records.

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