The Monarch Group Real Estate Blog

The Monarch Group Real Estate Blog

Real Estate Terms: What Do These Words Mean?

If you’ve ever bought or sold a piece of Real Estate, you know there are plenty of questions that you have to ask.  One question you may be thinking, but never ask is: “What does this word mean?” Real Estate “lingo” has evolved and expanded over the course of time. Agents are used to throwing around these terms from day to day and can sometimes overlook the consumer’s need for an explanation. Although the list goes on and on, here are a few terms that you should learn for your real estate transaction:

Amortization: The repayment of a mortgage loan by installments with regular payments to cover the principal and interest. Your Amortization Term is the amount of time required to pay the loan back.

Closing Costs: A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing costs are made up of individual closing cost items such as origination fees and attorney's fees. Many closing cost items are included as numbered items on the HUD-1 statement.  Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include an origination fee, an attorney's fee, taxes, an amount placed in escrow, and charges for obtaining title insurance and a survey. Closing costs percentage will vary according to the area of the country.

Closing Statement/HUD 1: The final statement of costs incurred to close on a loan or to purchase a home.

Earnest Money Deposit: A deposit made by the potential homebuyer to show that he or she is serious about purchasing the property.