Top 15 Real Estate Terms for You to Know

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If you are new to buying or selling real estate or it has been a long time since your last property transaction, you will hear many terms spoken throughout the process and you may not know what they all mean. Here are 15 of the top terms that may be less obvious that you will hear and may want to have defined.

Approved for short sale

This means that the current homeowner’s bank has approved a lowered price for the home and it is ready to be sold to the public.

Back-end ratio

This is one of the procedures that a lender uses to qualify a homeowner for a loan. This employs the monthly debt payments including the forecasted housing costs, any auto or loan payments, child support etc. and weighs it against the gross income.

Capacity

This is the total amount of money a buyer can afford to take out for a home loan.

Cash-value policy

This is the insurance policy that pays for the replacement cost of a home minus depreciation if any damage happens to the property.

Closing disclosure (CD)

This is the official document that is given to the buyer a few days before closing. This covers the terms of the loan including the rate, monthly payment, mortgage insurance escrow amount on a monthly basis as well as outlines all of the closing costs.

Compliance agreement

This document is signed by the buyer at closing which explains that they agree to cooperate should the lender need to correct any mistakes within the loan documents.

Conventional loan

A conventional loan is one that is not guaranteed or backed by a government agency like FHA or VA loans.

Earnest money

This is the security deposit provided by the buyer to show intent and good faith to purchase.

Federal Housing Administration (FHA)

This is a government agency that insures and backs loans made by private lenders.

Housing ratio

This is one of two debt-to-income ratios that a lender will utilize to identify a buyer’s eligibility for a home mortgage that compares the total housing costs to the gross income.

Jumbo loan

This is a loan that exceeds the Fannie Mae/Freddie Mac limits which usually amounts to $425,100 in most areas in the United States.

Mechanic’s lien

This is a lien or hold against a property that was filed in the county by an individual or company who had done work on a home but was not paid for it. Should the homeowner refuse to pay it, the lien allows for a foreclosure.

Origination fee

This fee is charged by the mortgage broker or lender to begin and complete the loan application process.

Principal, interest, property taxes and homeowners insurance (PITI)

These are the primary core components that make up your monthly mortgage payment.

VantageScore

This is a model some lenders use to make their qualifying decisions for lending. The borrower’s score is based on factors like bill paying pattern, outlying debt balances, credit accounts, number of inquiries on credit reports and age.

Beth Dickerson

Boston, MA

Primary phone
(617) 510-8565
Email
[email protected]
Address
277 Dartmouth St. , 2nd Floor,
Boston, MA 02116

About The Author

One of Boston’s most reputable real estate brokers, Beth Dickerson has achieved more than $2 billion in sales and thousands of successful real estate transactions over her nearly thirty-year tenure. Beth has received national acclaim from the real estate industry and represents some of the most prestigious residents and properties across Massachusetts. Her enduring record as a top producer comes from the intuitive gift of sensing her clients’ needs. She has built a business that is referral-based at its core—a testament to her relationship-driven approach and penchant for exceeding expectations. It is this nuanced expertise that Beth leverages to guide many of her clients-turned-friends through some of the greatest milestones of their lives.

Beth was the proprietor of her own real estate company before joining the residential division of R. M. Bradley in 1993, where she was a top producer for more than a decade. In 2003, she founded her own boutique real estate firm, Dickerson Real Estate, before merging with Gibson Sotheby’s International Realty in 2007. Today, Beth attributes her success to her comprehensive marketing and advertising strategies, exclusive contact network, and unparalleled insight into neighborhoods like Back Bay, Beacon Hill, the South End and Waterfront. With an understanding that no two clients are alike, she works with clients in all phases of life—from first-time buyers to luxury developers, seasoned sellers and beyond. Beth offers clients the resources to aggressively market their property locally, nationally and globally, and her attention to detail, drive and enthusiasm are unmatched.

Beth has appeared in prestigious media outlets including The Wall Street Journal, Mansion Global, The Boston Globe, and Boston magazine, and was prominently featured as Greater Boston’s real estate expert on WCVB Chronicle in 2020. She has had the honor of serving as President of the Downtown Council of the Greater Boston Real Estate Board. For over ten years, she has been a Co-Chair and Committee Member for the Massachusetts General Pediatric Hospital for Children’s Storybook Ball. She serves as a Board Member of the Community Music Center of Boston and a member for the Perkins School for the Blind, Emerald Necklace Park Conservancy, Justine Liff Luncheon, Youth Villages and the Boys & Girls Club of Boston, among dozens of other organizations throughout the Boston area.

A long-time resident of Boston’s Back Bay, Beth was an active member of the community as she raised her two children: she served as treasurer of the Clarendon Street Playground and was an avid supporter of the Hill House Community Center.