Get To Know Real Estate Lingo

Understanding Common Real Estate Terms

Buying or selling a home can sometimes feel overwhelming with all of the industry terminology involved. For over 43 years, The Hamptons Real Estate has proudly helped clients throughout the New Hampshire Seacoast better understand the real estate process with trusted local guidance and education every step of the way.

Below are some commonly used real estate and mortgage terms to help you navigate the buying and selling process with confidence.

Adjustable-Rate Mortgage (ARM)

A mortgage loan with an interest rate that may periodically change over time based on market conditions.

Agreement of Sale

A legally binding contract between the buyer and seller outlining the terms, conditions, and details of the property sale.

Amortization

The gradual repayment of a mortgage loan through scheduled monthly payments that reduce both principal and interest over time.

Appraisal

A professional estimate of a property’s market value, often required by lenders during the mortgage approval process.

Balloon Mortgage

A mortgage that requires a large lump-sum payment at the end of the loan term.

Bridge Loan

A short-term loan used to help finance the purchase of a new property while waiting for an existing property to sell.

Closing Costs

Expenses associated with completing a real estate transaction, including lender fees, title fees, taxes, insurance, and attorney costs. These costs are typically paid at closing by the buyer and/or seller.

Condominium (Condo)

A form of ownership where an individual owns a specific unit while sharing ownership of common areas with other unit owners through a condominium association.

Conventional Loan

A mortgage loan not insured or guaranteed by a government agency such as FHA or VA.

Co-Op

A form of housing ownership where residents own shares in a corporation that owns the building rather than owning the real estate directly.

Equity

The portion of a property’s value that the owner truly owns after subtracting outstanding mortgage balances or debts.

Escrow

Funds or documents held by a neutral third party until certain conditions of a transaction are completed.

Fannie Mae

The Federal National Mortgage Association, a government-sponsored enterprise that purchases mortgage loans from lenders to help provide liquidity in the housing market.

Freddie Mac

The Federal Home Loan Mortgage Corporation, a government-sponsored enterprise that purchases and guarantees mortgage loans.

FHA Mortgage

A mortgage insured by the Federal Housing Administration, often designed to help buyers qualify with lower down payment requirements.

Mortgage

A loan secured by real estate that allows a buyer to purchase property while repaying the lender over time.

Points

Fees paid directly to the lender at closing, with one point equal to 1% of the mortgage loan amount.

Prepayment

Paying off all or part of a mortgage loan before it is due.

Principal

The original loan amount borrowed, excluding interest, taxes, and insurance.

Title

Legal ownership rights to a property.

Title Search

A review of public records to verify ownership and identify any liens, claims, or encumbrances against a property.