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Below are some commonly used terms in real estate. For a complete list see the Real Estate Glossary at the RealEstateabc Web site.
APR The "Annual Percentage Rate." This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage. Use this as a guideline: deduct the closing costs from your loan amount, then using your actual loan payment, calculate what the interest rate would be on this amount instead of your actual loan amount. You will come up with a number close to the APR. Because you are using the same payment on a smaller amount, the APR is always higher than the actual note rate on your loan.
Balloon Mortgage A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.
B.P.O. "Broker price opinion." Similar to the more commonly known C.M.A. (comparative market analysis), a broker price opinion is an estimate of the probable selling price of a home under current market conditions, generated by a broker or appraiser with intimate local knowledge at the start of the short sale or foreclosure.
Condominium A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.
Conforming Loan Limits For 2008, the maximum conforming loan amount allowed under guidelines set by the Office of Federal Housing Enterprise Oversight (www.ofheo.gov) is $417,000. Loans for more than that amount (nonconforming) are considered "jumbo" and are more difficult and expensive to obtain.
R.E.O. R.E.O. means "Real estate owned." Property owned by a lender because of forfeiture or foreclosure.
Secondary Marketing Securities sold by one investor to another. In the real estate marketplace, it's what happens when the lender from which you obtained financing sells your loan to another investor.
Short Sale The legal definition of a short sale is the selling a home for less than the owner still owes on the mortgage or mortgages. As part of the process, the homeowner or the homeowner's agent negotiates an agreement under which the mortgage holder agrees to accept the proceeds of the short sale and forgive the unpaid balance of the loan.
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