1. Purchase Contract (Agreement/Offer) - An agreement between a buyer and seller of real property, setting forth the price and terms of the sale. Also known as a sales contract.
  2. Rate Cap - The limit of how much the interest rate may change on an ARM at each adjustment and over the life of the loan.
  3. Rate Lock - The borrower and the lender agree to protect the interest rates, points, and term of the loan while it is processed.
  4. Real Estate Agent - A salesperson, usually licensed by the state, and supervised by a broker. Agents work solely on commissions earned by selling properties.ĺ
  5. Realtor® - Person licensed to sell or lease real property acting as an agent for others and who is a member of a local real estate board affiliated with the National Association of Realtors.®
  6. Return On Investment - The percentage of capital gain that you make on an investment. For example, say you invest $1,000 into a property, and a year later it is worth $1,500. Your return on investment equals the profit ($500) divided by the initial investment ($1,000) or 50%.
  7. Roughed In - Installing wiring, plumbing, and heating vents before the walls are covered.
  8. Soil Test - A test boring of the soil from where the house will sit to ensure that it can handle the load of the structure.
  9. Structural Engineer - Develops structurally sound solutions that fit with an architect's design and ensure that structures can withstand stresses from earthquakes, wind, ice, and snow.
  10. Survey - The measurement and description of land by a registered surveyor.
  11. Title Insurance - An insurance policy that protects a lender and/or home buyer (only if home buyer purchases a separate policy, called owner's coverage) against any loss resulting from a title error or dispute.
  12. Truth-In-Lending Statement - A Federal law requiring full disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms and financial institutions.
  13. Underwriting - Analysis of risk, determination of loan eligibility, and setting of an appropriate rate and terms for a mortgage on a given property for given borrowers.
  14. VA Funding Fee - The amount charged on VA mortgages to cover administrative costs.