How many times have you been talking real estate and had no clue what your lender or Realtor is saying? You may know what some of the lingo means, but we are going over all of the main phrases and terminology today.

PITI: Stands for Principal, Interest, Taxes, Insurance and makes up the monthly payment for your loan.

MI: Stands for Mortgage Insurance. This is insurance securing your loan if the borrower puts less than 20% down when getting the loan. Usually mortgage insurance is removed from the monthly payment once a certain amount of the loan is paid off.

Escrow: This is a neutral account that a third party oversees during a real estate transaction. Earnest money is deposited into this account and the seller is paid their funds out of this account once the sale has recorded and closed.

Earnest Money: These are funds that are deposited once an offer is accepted. Usually due within three business days after acceptance, these funds can be refundable or non-refundable depending on the terms of the deal.

Inspection Period: Unless the inspection contingency is waived, which I never recommend, this is your 10 day period to have inspectors come look at the property. I always recommend a licensed home inspector and a sewer inspector to be done, but a foundation inspection, roof inspection, and radon test can also be done if those are areas of concern.

CMA: A Competitive Market Analysis is a report that shows comparable properties to the house you are trying to sell or wanting to buy. This is a good way to make sure you are getting a good deal for your investment.

Contingent Offer: This is an offer that is dependent on the sale of the buyer’s current house. One thing to note about this kind of offer is the offer may take longer to close or could fall through if the buyer’s current residence takes longer to sell than expected.

Property Taxes: These are the taxes paid to the local government from the home owner. If the house is financed (the owner has a loan on the property) these taxes are usually paid by the lender after the monthly payment is received from the owner of the house. If the house is owned free and clear these taxes are paid annually or quarterly.

First Time Homebuyer: Anyone buying a house who has not owned a house, held title to a house, or had a vested interest in a house within the last three years.

REALTOR®: A licensed professional who works with clients to find a house to buy or lists a house for sale. These professionals negotiate on behalf of their client, consult with buyers and sellers to ensure they are paying or receiving a fair market value for the property, and are held to a higher code of ethics than Real Estate Brokers who are not REALTORS®.

Mortgage Broker: A licensed professional who helps clients obtain a loan to purchase a home or investment property.

Closing Costs: Paid for at the time of closing/recording of title. These costs are made up of property taxes, insurance, loan origination costs, and other recording costs. They can be paid for in cash by the buyer or a seller credit can be given to cover some or all of the costs. Seller credits help reduce the amount of cash needed from the buyer at the time of signing.

If I missed any words or phrases that you have questions on, please text, call, or email me and I am happy to answer any questions you have.

Trent J. Werner

REALTOR®

(971) 235-1312

Trent@uptownpm.com

Uptown Properties