Glossary.

Closing costs: Costs to the buyer due upon closing on the home. Including and but not limited to, title company/lawyer fees, mortgage origination fees, pre-pay for Interest, taxes and Insurance (impound account), appraisal fee, discount points, title insurance, VA funding fee. Remember a VA buyer can request up to 4% of the purchase price be credited buy the seller to cover closing costs. In most cases 4% will cover all closing costs. See VA Allowable Loan Fees and VA Non-Allowable Loan Fees.

Deed: The actual legal document that would transfer the ownership (title) of a property from one person to another.

Ernest Money Deposit (EMD): When an offer is made on a home the buyer often puts a Deposit down to show the seller that they are serious buyers. Not normally more then 3% of the purchase price. The EMD goes towards the purchase of the home.

Escrow period: The period between an offer to purchase a property and the day of closing (getting the keys). This is typically 30 days.

First Time Home buyer: Buyer has not been on title of a home in the last 3 years. That includes being gifted or inheriting a home.

Mortgage: An agreement between you and a lender that allows you to borrow money to purchase or refinance a home and gives the lender the right to take your property if you fail to repay the money you've borrowed.

Mortgage originator: The institution issuing the loan. Can be a bank but are often mortgage brokers.

Mortgage Broker: A loan originator that works to research loan options and negotiate with lenders on behalf of their clients. typically, have more options available to buyers regarding loan options. This holds true even for VA loans. Lenders can have their own requirement and rules in addition to what the VA requirements are.

Prime Mortgage Insurance (PMI): Insurance that covers the buyer if they default on the mortgage before enough equity has been gained on the property. This is paid by a buyer when they are unable to put 20% down. Remember PMI does not apply to VA loans.

Title: Who owns the property. The title is not a physical thing. The title is transferred on a deed. Owner holds title through the deed.

Title insurance: A type of insurance that protects homeowners against claims questioning the legal ownership of a property (i.e., the title to the property). If disputes over title ownership arise after the purchase, the insurance policy pays for any legal fees to resolve them. It’s a one-time fee paid at closing.

Title company: The company that issues title insurance and is therefore responsible for checking to assure a property is transferable.

VA Loan: Mortgage that is guaranteed by the Department of Veterans Affairs.

VA funding fee: A fee used to help offset to cost of the VA loan program to the Taxpayer. Considered a closing cost but unlike the other closing cost it can be financed into the loan. You may be eligible to receive a lower rate or completely exempt depending on your VA disability rating, make sure to ask your lender.