Common Terms Used In Las Vegas Real Estate
If you are looking at buying or selling Las Vegas real estate whether you are a seasoned investor or a first time home buyer you should be familiar with some of the terminology. Here is a short list of a few common terms and a brief description.
Adjustable Rate Mortgage (ARM).
A type mortgage having an interest rate which is usually initially lower than that of a mortgage with a fixed rate but is adjusted periodically according to the cost of funds to the lender
Annual Percentage Rate (APR).
Everything financed in your mortgage loan package (interest, loan fees, points or other charges) expressed as a percentage of the loan amount (usually slightly above the actual interest rate alone).
Assumable Loan.
A loan in which the lender is willing to "transfer" from the previous owner of the home to the new owner, sometimes at the same interest rate, sometimes at a new rate. An assumable loan can make your home more attractive to buyers when you want to sell. Often the new buyer has to qualify for the assumption just as they would for a new loan.
Closing Costs.
Costs the buyer must pay at the time of closing in addition to the down payment: including points, mortgage insurance premium, homeowners insurance, prepayments for property taxes, etc. Closing costs average 3% to 4% of the loan amount.
Contingency.
A condition put on an offer to buy a home; such as the prospective buyer making an offer contingent on his or her successful sale of a present home.
Conventional Mortgage.
A type of mortgage not insured by either the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), and thus usually requiring a 10% to 20% down payment.
Earnest Money.
Funds submitted with an offer to show "good faith" to follow through with the purchase. Earnest money is placed by the buyer into an escrow/trust account until closing, when it becomes part of the down payment or closing costs.
Escrow.
A procedure in which documents or transfers of cash and property are put in the care of a qualified third party, other than the buyer or seller.
FHA Financing.
Financing for a loan which will be insured against loss by the Federal Housing Administration. Such financing allows for a lower down payment than required by most lenders.
Homeowners Insurance.
Insurance that protects the homeowner from casualty (losses or damage to the home or personal property) and from liability (damages to other people or property). Required by the lender and usually included in the monthly mortgage payment.
Loan Origination Fee.
A fee charged by the lender for evaluating, preparing, and submitting a proposed mortgage loan.
Mortgage Insurance Premium (MIP).
A charge paid by the borrower (usually as part of the closing costs) to obtain financing, especially when making a down payment of less than 20 percent of the purchase price, for example on an FHA-insured loan.
Point
An amount equal to one percent of the principal amount being borrowed. The lender may charge the borrower several points in order to provide the loan.
Property Taxes.
Taxes (based on the assessed value of the home) paid by the homeowner for community services such as schools, public works, and other costs of local government. Paid as a part of the monthly mortgage payment.
Title Insurance.
Protects lenders and homeowners against loss of their interest in property due to legal defects in the title
VA Loan.
A loan guaranteed by the Department of Veterans Affairs against loss to the lender, and made through a private lender.
The author, Roy White, and his wife, Shirley, have been helping people buy and sell Las Vegas real estate for over 28 years. They are also investors. If you have any questions or comments please call Roy and Shirley toll free at 1-866-374-3444 or e-mail them at CENTURY21WHITE@aol.com
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CENTURY 21 Aadvantage Gold
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Las Vegas, NV 89130
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