In such situations, if you can't come up with additional down payment money or a better appraisal, or the seller won't lower the price, the deals might fall through. And, unfortunately, the lender may refuse to fund the loan if the appraisal comes in lower than the loan amount. Your bank or other lender will require the appraisal in order to ascertain the worth of the house for lending purposes.
TEAR DOWN IN REAL ESTATE LINGO PROFESSIONAL
A professional appraiser-who should be a qualified, disinterested specialist in real estate appraisals, with expertise in the local geographic area-makes an estimate by examining the property, looking at the initial purchase price, and comparing it with recent sales of similar property. AppraisalĪ determination of the value of something, such as jewelry, stock, or, in this case, the house you plan to buy. Mortgage lenders are required to disclose the APR so that borrowers can more accurately compare the actual cost of different loans with different fees. Annual Percentage Rate (APR)Ī yearly interest rate that includes upfront fees and costs paid to acquire the loan, calculated by taking the average compound interest rate over the term of the loan. To avoid constant and drastic fluctuations, ARMs typically limit how often and by how much the interest rate can vary. Treasury Bills-over the life of the loan. Adjustable Rate Mortgage (ARM)Ī mortgage loan with an interest rate that fluctuates in accordance with a designated market indicator-such as the weekly average of one-year U.S. As soon as the seller signs on to your purchase offer, you're in contract for the sale of the house, and neither of you can back out without facing consequences-in your case, likely losing your earnest money deposit and, in the seller's case, a potential lawsuit. AcceptanceĪgreeing to the terms of an offer, thereby creating a contract. For a more lighthearted look at real estate ad language, see What "As Is" and Other Real Estate Marketing Terms Really Mean. Here are some common real estate terms to know when getting ready to buy a home.
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