Mortgages Flashcards
Title
The legal claim of property ownership.
Earnest Money Deposit
Also known as a good-faith deposit. This is the money paid to the seller by an interested buyer to show that the buyer is serious abut buying the house.
Recurring Costs
Costs that occur on a regular basis (ex. mortgage payments, insurance payments, property taxes).
Down Payment
Upfront money applied to the purchase of a home. Required for most loans taken out to buy a house and ideally at least 20% of the house price.
Private Mortgage Insurance
Bank-required insurance that covers you if you are not able to repay the loan.
Assessed Value
The amount used to determine property taxes.
Escrow
Money that a bank collects from borrowers for insurance and property taxes. The bank will then pay those bills for the homeowner when they are due.
Foreclosure
The act of a bank taking possession of a house and selling it when the homeowner cannot pay the mortgage.
Closing
A meeting attended by the buyer, seller, their attorneys, and a representative of the lending institution. The official sale takes place at this meeting.
Homeowner’s Insurance
Insurance that covers damage to the home due to fire, and other natural disasters. It also covers the contents of the home in case of theft or vandalism.
Prepaid Interest
The amount of mortgage interest due to cover the time from the closing date to when the first mortgage payment is due.
Market Value
The amount for which a house could be sold.
Mortgage Payment
A loan taken out by people to purchase a home.
Property Taxes
Homeowners pay a tax based on the value of the property. These taxes help pay for government services, such as schools, libraries and police.
