August 14, 2013

When it Comes to New Homes in Portland, Buyers Should Know the Lingo

new homes in Portland, OregonWhen searching for new homes in Portland, potential first-time buyers can often become confused with the lingo and acronyms used in the sales process. When looking at new homes, Oregon shoppers shouldn’t need a cryptologist. Simply use the following cheat sheet.

Portland New Home Lingo

  • Annual Percentage Rate (APR): The annual interest rate and finance charges on a loan.
  • Appraisal: The estimated value of a property.
  • Appreciate: An increase in a home’s value.
  • Assessment: A home’s property tax based on its value.
  • Binder: The receipt that you get after paying a deposit on a home.
  • Certificate of occupancy: A document that states that your home meets the local code, ordinance and regulation requirements.
  • Closing A meeting where you sign documents that transfer ownership of the home from the former homeowner to you.
  • Closing costs: The payment that you make to obtain a loan (the down payment) and transfer the real estate title.
  • Default: When a homeowner breaches a mortgage contract, like by not making a mortgage payment on time.
  • Density: The number of properties in a specific area.
  • Downpayment: A percentage of a home’s selling price that you pay to secure a mortgage.
  • Equity: The difference between the value of a home and the mortgage amount.
  • Escrow: When a third party handles documents or funds on your behalf.
  • Federal Housing Administration (FHA): The federal agency that provides mortgage insurance if your down payment is less than 20 percent of the total mortgage.
  • Fixed rate mortgage: A mortgage that has a fixed interest rate.
  • Fixed scheduled mortgage: A mortgage that has a fixed payment plan, but not necessarily a fixed interest rate.
  • Graduated payment mortgage (GPM): A mortgage that lets you have a fixed rate and fixed schedule. The mortgage payments initially start out low and annually increase during the first five to ten years.
  • Growing equity mortgage (or rapid payoff mortgage): A mortgage with a fixed rate and fixed schedule that has payments that annually increase so you can pay off the home loan faster.
  • Hazard insurance: A type of insurance policy that covers damage to the property.
  • Interest: The cost a lender charges for letting you borrow money.
  • Level payment mortgage: A home loan that allows you to pay the same monthly amount over the life of the loan.
  • Mortgage broker: A person who represents several lenders and helps you find the best mortgage plan.
  • Mortgage commitment: A letter that a lender writes that states that it agrees to lend you money for a property.
  • Mortgage company: A company that borrows money, lends it to homeowners and then sells the loan to investors.
  • Mortgage origination fee: The fee that a lender charges for preparing and servicing a loan application.
  • PITI: An acronym that for principal, interest taxes and insurance.
  • Principal: The amount of a loan, not including interest or other fees.
  • Property survey: A survey that determines a property’s boundaries.
  • Recording fee: The fee that governments charge to record the transfer of a property.
  • Sales contract: A contract that specifies what the purchase of a home includes, any guarantees, the closing cost amount and a move-in date.
  • Title: A document that proves that you legally own a property.
  • Walk-through: The final inspection of a home for problems that need correcting.
  • Zoning: Regulations regarding the use, height and location of your property.

[Photo by: Sam Beebe via CC License]

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George Hale

About George Hale

George Hale is the owner of H. Hudson Homes. H. Hudson Homes specializes in building new modern homes in the Portland, Oregon and surrounding areas with an emphasis on cutting-edge design and sustainability.

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