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| Amenity: |
A feature
of the home or property that serves
as a benefit to the buyer but that is
not necessary to its use; may be natural
(like location, Woods, water) or man-made
(like a swimming pool or garden). |
| Block Wall: |
Stacked
8” concrete block around the perimeter
of the home to serve as the support
for framing of the home, usually somewhere
between 5-7 blocks high. |
| Building code: |
Based
on agreed upon safety standards within
a specific area, a building code is
a regulation that determines the design,
construction, and materials used in
building. |
| Certificate of Occupancy (C/O): |
A certificate issued by a local city
government to the property owner stating
that a building is in proper condition
to be occupied. |
Covenants, Conditions and Restrictions: |
Rules and guidelines, usually set and
enforced by a committee, on the use
and looks of real property. These guidelines
are used to maintain a desired look
and feel within a community, condominium
complex, and other common property subdivisions. |
| Easement: |
A right to
the limited use or enjoyment of land
held by another. Also, an interest in
land to enable sewer or other utility
lines to be laid, or to allow access
to a property. |
| Footing: |
Poured concrete
around the perimeter of the home to
serve as the support for the concrete
block. |
| Foundation: |
The footing
and concrete block that supports the
entire home. |
| Hip Roof: |
A four-sided
roof having sloping ends and sides. |
| HVAC: |
Heating, Ventilation
and Air Conditioning; a home's heating
and cooling system. |
| Plat Map: |
A map dividing
a parcel of land into lots showing the
lot numbers and ownership of each lot.
The plat map can show the location of
a specific property within a subdivision. |
| Rural: |
A term used
to describe a property's location. For
example, rural properties are in more
remote locations, sometimes on non-paved
access roads or streets with support
services more than 10 miles away. Rural
is also a term used to describe the
country as opposed to the city. |
| Slab: |
A concrete floor
used as a foundation in homes without
a basement. |
| Selections: |
General
term used for anything that is chosen
by the customer to customize a home.
For example, Selections can refer to
the lights a customer chooses, the flooring,
the paint color, etc. Selections can
be very specific (i.e. Moenstone sink
#25250W), or very basic (i.e. green
paint.) Upgrades in selections can raise
the price of a home, where as choosing
a selection of the same grade category
will allow for customization without
large price increases (i.e. going from
Sandstone colored Corian countertops
to Evergreen colored Corian countertops). |
| Stick Built Roof: |
A
roof with trusses that have been built
on the job site as opposed to in a factory. |
| Stick Built Home: |
A
home that is framed by framers on the
job site as opposed to pre-fabricated
walls or sections of home. |
| Subdivision: |
A housing
development that is created by dividing
a tract of land into individual lots
for sale or lease. |
| Survey: |
A property
diagram that indicates legal boundaries,
easements, encroachments, rights of
way, improvement locations, etc. |
| Trussed Roof: |
A roof
built out of trusses made in a factory
according to specific and detailed plans.
Factory made trusses are delivered to
a building site by truck and lifted
onto the roof of a framed house by a
crane. |
| Zoning: |
The division
of land by legislative regulation into
areas restricting the permitted uses
for real property. |
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| 2-10 Homebuyers Warranty: |
Warranty that is offered by GW Homes
Inc. that a home is void of certain
defects and will perform to pre-set
standards. If warranted defects do occur,
GW Homes will arrange to have defects
fixed as needed and as outlined in the
warranty. |
| Cosmetic Defects: |
Defects
in which are only affect the appearance
of an item. Warrantable cosmetic defects
will be addressed at the time of the
One Year Warranty Walkthrough. |
| Cosmetic Repair: |
Repairs
that improve the appearance of the property
and are considered aesthetically pleasing
to the eye. |
| Customer Care System: |
The
procedures GW Homes follows to ensure
that all post settlement concerns are
handled in a timely fashion. The GW
Customer Care System includes Emergency
work, Immediate Warranty work, and Service.
The guidelines for our system have been
based on the 2-10 Homebuyers Warranty
and the Residential Construction Performance
Guidelines issued by the NAHB. |
| Emergency: |
All Customer
Care concerns that relate to Plumbing,
HVAC, or Electrical issues. These issues
will be given an emergency status and
will be handled as soon as possible. |
| Immediate Warranty: |
Customer Care concerns that occur within
one year of the home being built and
are covered by the 2-10 Homebuyers Warranty.
These items occur rarely and cause no
risk of additional damage to the home. |
| Manufacturer's Warranty: |
Warranty that is offered by a specific
manufacturer. If defects materialize
in specific items in the home, the items
may have a warranty provided by the
manufacture of that item. Even if you
have passed the One Year Warranty Period,
check these warranties to see if you
are provided additional coverage for
these items. |
| One Year Warranty Check Up: |
A Walkthrough scheduled at the end of
the One Year Warranty Period to fix
any and all warrantable defects in the
home. |
| One Year Warranty Period: |
The
period of time in which all warrantable
defects in the home will be corrected
free of charge. The period starts the
day of your settlement and ends one
year after the day of your settlement. |
| Service: |
Customer Care
concerns that are Cosmetic Defects or
items of concern that occur after the
One Year Warranty Period. These items
should be held until your One Year Warranty
period, otherwise charges may apply. |
| Structural Defects: |
Defects in the framing or foundation
of your home that don't meet the guidelines as outlined in the 2-10 Home Buyers Warranty. |
| System Defects: |
Defined
as defects in a running system, such
as an HVAC system, the plumbing, the
electric, or alarm systems. |
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| Addendum: |
An attachment
to a document, (i.e. a deed, or a contract),
that incorporates additional terms into
the original document, usually added
after the original document has been
ratified. |
| Adjustable-Rate Mortgage (ARM): |
Adjustable Rate Mortgage; a
mortgage loan subject to changes in
interest rates; when rates change, ARM
monthly payments increase or decrease
at intervals determined by the lender;
the Change in monthly -payment amount,
however, is usually subject to a Cap. |
| Amortization: |
Repayment
of a mortgage loan through monthly installments
of principal and interest; the monthly
payment amount is based on a schedule
that will allow you to own your home
at the end of a specific time period
(for example, 15 or 30 years) |
| Annual Percentage Rate (APR): |
Calculated by using a standard formula,
the APR shows the cost of a loan; expressed
as a yearly interest rate, it includes
the interest, points, mortgage insurance,
and other fees associated with the loan. |
| Appraisal: |
A valuation
of property (e.g. real estate, a business,
an antique) by the estimate of an authorized
person. Appraisals are typically used
either for taxation purposes or to discover
a possible selling price for the property
in question. |
| Appraised Value: |
An
opinion of a property's fair market
value, based on an appraiser's knowledge,
experience, and analysis of the property.
Since an appraisal is based primarily
on comparable sales, and the most recent
sale is the one on the property in question,
the appraisal usually comes out at the
purchase price. |
| Appreciation: |
The increase
in the value of a property due to changes
in market conditions, inflation, or
other causes. |
| "As Is" Condition: |
Term used to define that a buyer or
tenant is accepting a premises in the
current condition at the time of the
sale or lease, including any and all
physical defects. |
| Bridge loan: |
Not used
much anymore, bridge loans are obtained
by those who have not yet sold their
previous property, but must close on
a purchase property. The bridge loan
becomes the source of their funds for
the down payment. One reason for their
fall from favor is that there are more
and more second mortgage lenders now
that will lend at a high loan to value.
In addition, sellers often prefer to
accept offers from buyers who have already
sold their property. |
| Cash Equivalent Value: |
A technique used to calculate the appraised
value of a property. This technique
considers sales and financing concessions
when evaluating comparable property.
Although no standard is set for measuring
cash equivalent value in the appraisal
industry, investors and mortgage insurers
may insist that cash equivalency be
incorporated in the appraised values. |
| Closing: |
Also known
as settlement, this is the time at which
the property is formally sold and transferred
from the seller to the buyer; it is
at this time that the borrower takes
on the loan obligation, pays all closing
costs, and receives title from the seller. |
| Closing Costs: |
The
numerous expenses (over and above the
price of the property) that buyers and
sellers normally incur to complete a
real estate transaction. Costs incurred
include loan origination fee, discount
points, appraisal fee, title search,
title insurance, survey, taxes, deed-recording
fee and credit report charges. Also
known as "settlement costs". |
| Closing Statement: |
A document commonly used in real estate
transactions, detailing the fees, commissions,
insurance, etc. that must be transacted
for a successful transfer of ownership
to take place. This document is prepared
by a closing agent and is also known
as a "settlement sheet".
This legal document sets out the exact
amount of money needed to close a real
estate transaction and effect the transfer
of title and ownership from the seller
to the buyer. It includes all the costs
involved in the sale, such as mortgage
insurance and property tax deposits.
Also known as a Settlement Statement,
HUD-1 or HUD-1A. |
| Co-Signer: |
A person
who agrees to assume any debt obligation
if the principal borrower defaults on
the mortgage payments. A co-signer does
not have ownership in the property and
only assumes personal liability to the
debt obligation. His or her income and
obligations are used in the underwriting
process to reinforce the credit of the
primary borrower. |
| Commitment Letter: |
The written form of agreement between
a lender and a borrower stating the
terms under which the lender agrees
to finance a loan. |
| Comparables (Comps): |
Alternate
properties used to compare the value
of a specified property for appraisal
purposes. |
| Construction Loan: |
A short-term, interim loan for financing
the cost of construction. The lender
makes payments to the builder at periodic
intervals as the work progresses. |
| Consumer Credit: |
Credit
granted to a consumer permitting the
use or ownership of goods or services
during a term of payment. |
| Contingency: |
A condition
that must be met before a contract is
legally binding. For example, home purchasers
often include a contingency that specifies
that the contract is not binding until
the purchaser obtains a satisfactory
home inspection report from a qualified
home inspector. |
| Conventional loan: |
A private sector loan, one that is not
guaranteed or insured by the U.S. government. |
| Credit Authorization Letter: |
A document that authorizes a lender
to conduct a credit investigation. |
| Credit Score/Rating: |
A number that is assigned to an individual
by a credit bureau that represents the
possibility a borrower may default based
upon credit history. A score is based
on a range from approximately 365 to
840. This score can be used to determine
if that individual qualifies for a mortgage
loan. |
| Debt-to-income ratio: |
A comparison of gross income to housing
and non-housing expenses; With the FHA,
the-monthly mortgage payment should
be no more than 29% of monthly gross
income (before taxes) and the mortgage
payment combined with non-housing debts
should not exceed 41% of income. |
| Deed: |
The document
that transfers ownership of a property. |
| Depreciation: |
A decline
in the value of property; the opposite
of appreciation. Depreciation is also
an accounting term which shows the declining
monetary value of an asset and is used
as an expense to reduce taxable income.
Since this is not a true expense where
money is actually paid, lenders will
add back depreciation expense for self-employed
borrowers and count it as income. |
| Disbursements: |
Payments
made on behalf of the borrower pursuant
to the instructions on the HUD settlement
statement. |
| Down payment: |
The portion of a home's
purchase price that is paid in cash
and is not part of the mortgage loan. |
| Effective Date: |
An
appraiser’s estimate of the physical
condition of a building. The actual
age of a building may be shorter or
longer than its effective age. |
| Encumbrance: |
Anything
that affects or limits the fee simple
title to a property, such as mortgages,
leases, easements, or restrictions. |
| Endorse: |
The action
of a payee or holder of a negotiable
instrument (i.e. a bill, note, check,
etc.) assigning and transferring the
said instrument to another individual
or party by signing the back of the
instrument. |
| Endorsement: |
An addition
to a title insurance policy that may
add or subtract coverage and or benefits. |
| Equity: |
An owner's
financial interest in a property; calculated
by subtracting the amount still owed
on the mortgage loon(s)from the fair
market value of the property. |
| Escrow account: |
A separate
account into which the lender puts a
portion of each monthly mortgage payment;
an escrow account provides the funds
needed for such expenses as property
taxes, homeowners insurance, mortgage
insurance, etc. |
| Escrow Payment: |
The
use of escrow funds to pay real estate
taxes, hazard insurance, mortgage insurance,
and other property expenses as they
become due. |
| Estate (Real Property): |
The degree and nature of an individual’s
rights and interest in real property.
The two kinds of estates that are frequently
financed by mortgage lenders are fee
simple estates and leasehold estates. |
| FHA mortgage: |
A mortgage
that is insured by the Federal Housing
Administration (FHA). Along with VA
loans, an FHA loan will often be referred
to as a government loan. |
| Fixed-rate mortgage: |
A mortgage with payments that remain
the same throughout the life of the
loan because the interest rate and other
terms are fixed and do not change. |
| Float: |
A decision not to lock an interest
rate while a mortgage loan is being
processed made by the borrower. A loan
will be “a float” until
an interest rate is locked. |
| Flood insurance: |
Insurance
that protects homeowners against losses
from a flood; if a home is located in
a flood plain, the lender will require
flood insurance before approving a loan. |
| Grandfather Clause: |
A provision in a statute that exempts
those already involved in a regulated
activity or business from the new regulations
established by the statute. |
| Grant Deed: |
A written
instrument used to transfer or convey
real property that contains warranties
against prior conveyances or encumbrances. |
| Hazard Insurance: |
Insurance
coverage that in the event of physical
damage to a property from fire, wind,
vandalism, or other hazards. |
| Homeowner's insurance: |
An insurance policy that combines protection
against damage to a dwelling and Is
contents with protection against claims
of negligence )r inappropriate action
that result in someone's injury or property
damage. |
| Homeowners Association (HOA): |
A nonprofit association that manages
the common areas of a planned unit development
(PUD) or condominium project. In a condominium
project, it has no ownership interest
in the common elements. In a PUD project,
it holds title to the common elements. |
| Homeowners Association Dues: |
Payments made to a homeowners association
for the upkeep and preservation of common
areas. Frequency of payment will depend
on the standers set in the associations
Covenants and Restrictions. |
| HUD-1 (or HUD-1A): |
Also known as the "settlement sheet,"
it itemizes all closing costs; must
be given to the borrower at or before
closing. |
| Line of Credit: |
An
agreement by a commercial bank or other
financial institution to extend credit
up to a certain amount for a certain
time to a specified borrower. |
| Loan Amount: |
The original
amount of money borrowed from a lender. |
| Loan Commitment: |
The
terms under which a lender will finance
a loan. See Commitment Letter. |
| Loan Term: |
The length
of time in which a loan will be paid.
Typically terms of First mortgage loans
are 15, 20, and 30 years. |
| Lock-in: |
Since interest
rates can change frequently, many lenders
offer an interest rate lock-in that
guarantees a specific interest rate
if the loan is closed within a specific
time. |
| Mechanics Lien: |
Lien
to secure payment for work and materials
in erecting or repairing a building
or other structure |
| Mortgage: |
A lien on
the property that secures the Promise
to repay a loan. |
| Mortgage broker: |
A
firm that originates and processes loans
for a number of lenders. |
| Mortgage Note: |
A legal
document that is secured by a mortgage,
obligating a borrower to repay a loan
at a stated interest rate during a specified
period of time. |
| Offsite Improvement: |
Improvements that are outside the boundaries
of a property that are acquired by a
lender for reason of investment. (i.e.
walkways, streets, and parks) |
| Origination fee: |
The
charge for originating a loan; is usually
calculated in the form of points and
paid at closing. |
| Prequalification: |
A lender informally determines the maximum
amount an individual is eligible to
borrow. |
| Principal, Interest, Taxes and
Insurance: |
The four elements
of a monthly mortgage payment; payments
of principal and interest go directly
towards repaying the loan while the
portion that covers taxes and insurance
(homeowner's and mortgage, if applicable)
goes into an escrow account to cover
the fees when they are due. |
| Property Taxes: |
Tax
on real and personal property dependent
on the value of the property. |
| Prorate: |
To divide
in equal portions costs between the
buyer and seller of the time of closing,
or another agreed upon time. Costs may
include but are not limited to: rent,
taxes, insurance, etc. |
| Purchase and Sale Agreement: |
A written contract signed by the buyer
and seller stating the terms and conditions
under which a property will be sold. |
| Real Estate Taxes: |
The monthly taxes owed for a specific
property. |
| Real Property: |
Land
and appurtenances, including anything
of a permanent nature such as structures,
trees, minerals, and the interest, benefits,
and inherent rights thereof. |
| Recording: |
The noting
in the registrar’s office of the
details of a properly executed legal
document, such as a deed, a mortgage
note, a satisfaction of mortgage, or
an extension of mortgage, thereby making
it a part of the public record. |
| Recording Fees: |
The
fee a government charges for reporting
a real estate purchase or sale into
the public record. |
| Second Mortgage: |
A
mortgage that has a lien position subordinate
to the first mortgage. |
| Settlement Statement: |
A final record of all current costs
payable at the closing. The statement
will determine the seller’s net
proceeds and the buyer’s net payment.
Also known as a HUD-1. |
| Site Analysis: |
The
study of a land parcel to determine
its appropriateness for a specific function
(i.e. residential, commercial, industrial,
farm land, etc.). This analysis can
then be used to determine whether a
loan’s collateral is sound. |
| Title: |
A legal document
evidencing a person's right to or ownership
of a property. |
| Title Company: |
A company
that specializes in examining and insuring
titles to real estate. |
| Title insurance: |
Insurance
that protects the lender against any
claims that arise from arguments about
ownership of the property; also available
for homebuyers. |
| Title search: |
A check
of public records to be sure that the
seller is the recognized owner of the
real estate and that there are no unsettled
liens or other claims against the property. |
| Truth-in-Lending: |
A federal law obligating a lender to give
full written disclosure of all fees,
terms, and conditions associated with
the loan initial period and then adjusts
to another rate that lasts for the term
of the loan. |
| Underwriting: |
The process
of analyzing a loan application to determine
the amount of risk involved in making
the loan; it includes a review of the
potential borrower's credit history
and a judgment of the property value. |
| VA: |
Department of Veterans
Affairs: a federal agency which guarantees
loans made to veterans; similar to mortgage
insurance, a loan guarantee protects
lenders against loss that may result
from a borrower default. |
| Variable Interest Rate: |
A type of interest rate that changes
due to fluctuations in the controlling
index rate. There is usually a cap as
to the frequency and amount a Variable
Interest Rate can change. |
| Warranty Deed: |
Deed
used by a grantor to guarantee that
a good title is being conveyed. Used
in many states as opposed to a quitclaim
deed that gives no guarantees as to
the quality of the title. |
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