Orange County NY Homes: Buyers Glossary

Offe
indication by a potential buyer of a willingness to purchase a home at a specific price; generally put forth in writing.

Origination
the process of preparing, submitting, and evaluating a loan application; generally includes a credit check, verification of employment, and a property appraisal.

Origination Fee
The charge for originating a loan; is usually calculated in the form of points and paid at closing.

Partial Claim
a loss mitigation option offered by the FHA that allows a borrower, with help from a lender, to get an interest-free loan from HUD to bring their mortgage payments up to date.

PITI
Principal, Interest, Taxes, and Insurance - the four elements of a monthly mortgage payment; payments of principal and interest go directly towards repaying the loan while the portion that covers taxes and insurance (homeowner's and mortgage, if applicable) goes into an escrow account to cover the fees when they are due.

PMI
Private Mortgage Insurance; privately-owned companies that offer standard and special affordable mortgage insurance programs for qualified borrowers with down payments of less than 20% of a purchase price.

Pre-approve
lender commits to lend to a potential borrower; commitment remains as long as the borrower still meets the qualification requirements at the time of purchase.

Pre-foreclosure sale
Allows a defaulting borrower to sell the mortgaged property to satisfy the loan and avoid foreclosure.

Pre-qualify
A lender informally determines the maximum amount an individual is eligible to borrow.

Premium
An amount paid on a regular schedule by a policyholder that maintains insurance coverage.

Prepayment
Payment of the mortgage loan before the scheduled due date; may be subject to a prepayment penalty.

Principal
The amount borrowed from a lender; doesn't include interest or additional fees.

Radon
A radioactive gas found in some homes that, if occurring in strong enough concentrations, can cause health problems.

Real estate agent
An individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.

Realtor
A real estate agent or broker who is a member of the NATIONAL ASSOCIATION OF REALTORS®, and its local and state associations.

Refinancing
Paying off one loan by obtaining another; refinancing is generally done to secure better loan terms (such as a lower interest rate).

Rehabilitation Mortgage
a mortgage that covers the costs of rehabilitating (repairing or improving) a property; some rehabilitation mortgages such as the FHA's 203(k) allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.

RESPA
Real Estate Settlement Procedures Act; a law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships.

Real Estate United Inc. 1197 Dolsontown Rd. Middletown, NY 10940 | NYS Licensed Real Estate Broker