Ignite FB Tracking PixelConfused By Real Estate Terms? This Terminology Guide Will Help - Tiffiny Alexander
Tiffiny Alexander
Tiffiny Alexander, RE/MAX Gold
Email: [email protected]

Confused By Real Estate Terms? This Terminology Guide Will Help

by Tiffiny Alexander 12/09/2018

If you’re planning on buying a home in the near future and are confused about many of the terms associated with mortgages, you’re not alone. Real estate is its own industry with its own set of processes, terms, and acronyms. If you’re new to the home buying process, there can be somewhat of a learning curve to understand what each of these terms means.

Since buying a home is such a huge investment and life decision, there’s a lot of pressure on home buyers to make sure they get everything right. This makes for a stressful situation for buyers who don’t feel like they understand the terminology of things like mortgages, appraisals, credit reports, and other factors that contribute to the home buying process.

To alleviate some of those concerns and to make the home buying process run more smoothly, we’ve compiled a list of the most common, and most commonly confused, real estate words, terms, and acronyms. That way, when you’re talking things over with your real estate agent or your mortgage lender, you’ll be confident that you understand exactly what’s being considered.


Read on for our real estate terminology glossary.

  • Adjustable rate mortgage (ARM) - This is one type of home loan. Mortgage rates with this type of loan fluctuate throughout the repayment term of the loan. The fluctuation is based on a market indicator.

  • Fixed rate mortgage (FRM) - Another type of home loan, a fixed rate mortgage has a rate which does not fluctuate, remaining constant for the life of the term, most commonly 15 or 30 years.

  • Appraisal - An appraisal is the determination of the value of a property. Appraisals are used when purchasing and selling a home, as well as when refinancing a home loan. Appraisers are required to be licensed or certified in each state and are usually paid for by the lender.

  • Appreciation - An increase in a property’s value, most commonly due to market inflation, or the general increase in home prices over time.

  • Depreciation - A decrease in a property’s value, due to either market deflation (uncommon) or the wear and tear on a home that comes with age.

  • Closing costs - The costs and fees that a buyer is responsible for when purchasing a home or taking out a mortgage. These include underwriting fees, inspections, appraisals, transfer taxes, and more. Closing costs typically range from 2% to 5% of the total loan amount.

  • Contingency - Home purchases have contracts to protect the interest of the buyer, seller, and lender. Contingencies are provisions designed to protect the buyer or lender should something occur in the time leading up to closing on (or purchasing) the home. One common contingency is the buyer’s right to have a final inspection of the home before closing to ensure no new issues with the home have occurred.

  • Private mortgage insurance (PMI) - Buyers who cannot afford a down payment of %20 typically are required to take out a private mortgage insurance policy. This policy protects the lender should the borrower default (fail to repay or meet the conditions of their loan).



About the Author

Author
Tiffiny Alexander

 

Tiffiny Alexander is an award-winning broker in both California and Arizona. She’s a wine country native, bringing more than two decades of market knowledge and industry experience to those she serves. The hallmark of her business acumen is marked by her blue-collar-work-ethic roots coupled with a cornerstone concept of always being able to put her name to her work. Tiffiny has handled an array of residential, land, and commercial real estate requisites. She is an International Certified Luxury Home Marketing Specialist, leveraging a global reach of industry relationships to better serve her clients. She enjoys the opportunity to work and play in both The Valley of the Moon (her Northern California headquarters), as well as The Valley of the Sun (her Scottsdale and Phoenix Arizona office). She’s mastered the art of connecting her clients with the American Dream of building wealth through real estate; be that primary residence, destination get-away, or cash flow investment opportunities. 

 

Tiffiny is passionate about the outdoors, art, and the architecture found in abundance throughout the Sonoran Desert as well as the wine country of Northern California. Where can she be found when not immersed in all things real estate?  Hiking or running the local trails, teaching art in the Rincon Valley School District and introducing new local artists to the community at Fulton Crossing Gallery in Santa Rosa, California. Tiffiny grew up on a ranch in Northern California well stocked with farm animals, fresh eggs, and produce, She’s a farm-to-table foodie, whether its fine dining or family-style. And while she enjoys the luxuries of a five-star resort, she’s just as happy backpacking some of the amazing places thoughtfully preserved for the nature-lover in her. 

 

Tiffiny is the founder of Cannabis Land Brokers, the flagship real estate group dedicated to helping cultivators and distributors buy, sell, and lease cannabis zoned real estate. She is committed to legal, responsible, and sustainable business practices for the industry. She works locally and nationally to connect and inform owners and growers through her work with The National Cannabis Industry Association.  

 

"Everything comes from the land. All of our stories start with some small patch of it. The soil feeds us. The earth grounds us. Vistas inspire us. Our truest sense of progress points back to our stewardship of the land.” - Tiffiny Alexander