Buying New Home,

ESCROW
A transaction in which a third party acts as the agent for seller and buyer, or for borrower and lender, in handling legal documents and disbursement of funds.

FREDDIE MAC
A common nickname for the Federal Home Loan Mortgage Corporation.

ENCROACHMENT
An unauthorized invasion or intrusion of a fixture or other real property wholly or partly upon another's property, thus reducing the size and value of the invaded property.

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.

PARTIAL RELEASE
A clause found in a mortgage which directs the mortgagee to release certain parcels from the lien of the blanket mortgage upon the payment of a certain sum of money.

BUILDING RESIDUAL TECHNIQUE
A method of determining the value of an improvement normally used in appraising income property.

PERFORMANCE BOND
A bond, usually posted by one who is to perform work for another, which assures that a project or undertaking will be completed as per agreement or contract.

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.

IMPLIED WARRANTY OF HABITABILITY
A legal doctrine imposing on the landlord a duty to make the leased premises acceptable to live in and ready for occupancy and to continue to maintain them in a state of repair throughout the entire term of the lease.

NET WORTH
The value remaining after deducting liabilities from assets.

GUARDIAN
One who is given the lawful custody and care of another(called a ward).

INSPECTION
A visit to and review of the premises. A prudent purchaser of property always inspects the premises before closing.

ENCUMBRANCE
Any claim, lien, charge or liability attached to and binding upon real property which may lessen the value of the property but will not necessarily prevent transfer of title.

TENANT
In general, one who holds or possesses property, such as a life tenant or a tenant for years; commonly used to refer to a lessee under a lease.

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

OBSOLESCENCE
A type of depreciation of property.

ARM
See Adjustable Rate Mortgage Loans.

REVERSION
A future estate in real property created by operation of law when a grantor conveys a lesser estate than he has. The residue left in the grantor is called a reversion which commences in possession in the future upon the end of a particular estate granted or devised, whether it be freehold or less-than-freehold.

FEDERAL TRADE COMMISSION (FTC)
A federal agency created to investigate and eliminate unfair and deceptive trade practices in business.

FORECLOSURE (OR REPOSSESSION)
Legal process by which a mortgaged property may be sold to pay off a mortgage loan that is in default.

EQUITY
The difference between the current market value of a property and the total debt obligations against the property. On a new mortgage loan, the down payment represents the equity in the property.

RETALIATORY EVICTION
An act whereby a landlord evicts the tenant in response to some complaint made by the tenant.

CREDIT REPORT
A report detailing the credit history of a prospective borrower that's used to help determine borrower creditworthiness.

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