Finance Unit 7: Real Estate & Mortgages Flashcards
a loan from a bank or a financial institution that helps the borrower purchase a house
mortgage loan
The payment a borrower makes each month toward the purchase of a home. It consists of four components: principal, interest, taxes, and insurance.
mortgage payment
a financial product that permits individuals to borrow a large sum of money that they can then repay over time. It usually carries a fixed interest rate and requires regular monthly payments
installment loan
the fees a seller and buyer pay to complete a real estate transaction. They usually equal between 2 percent and 7 percent of the property’s sale price.
closing costs
the amount due on any debt before interest.
principal
the amount that your local government determines your property to be worth for tax purposes
assessed value
charged on immovable property such as land and structures that are permanently attached to the ground such as a house, building, or land.
tax rate
an opinion of what a property would sell for in a competitive market based on the features and benefits of that property (the value), the overall real estate market, supply and demand, and what other similar properties have sold for in the same condition.
Rate of assessment - the percentage of the market value that is taxed. It is sometimes expressed in mills per dollar of the assessed value of the property.
market value
provides financial protection in the event that the homeowner’s house or its contents are damaged. It also provides protection in case the insured or the family are held liable for injuries to other people or damage to their possessions while they are on the property.
Homeowner’s Insurance
provides coverage for bodily injury and property damage sustained by others for which you or covered residents of your household are legally responsible.
personal liability
covers any additional living expenses, meaning any necessary expense that exceeds what you normally spend.
loss-of-use coverage
the amount of money it would take to replace your damaged or destroyed home with the exact same or a similar home in today’s market.
replacement value
the amount you have to pay for home owner’s insurance coverage.
premium
based on your distance to a water source, how quickly the nearest fire department can respond in the event of a fire, and what equipment they have.
fire protection class
the costs of services such as electricity, gas, water, telephone, cell phone, cable TV, Internet service, and heating fuel
utility costs
