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Idaho Real Estate Glossary

 

Agency: In real estate terms Agency refers to a legal relationship when a client (buyer or seller) officially hires someone else (a real estate agent) to act as their representative.

Application Fee: A fee charged by a lender when you officially apply for a mortgage, home loan. In Idaho, the application fee is typically nonrefundable but covers some of the transaction costs of the loan.

Appraisal Fee: The cost of conducting the home appraisal when purchasing a home. The fee is charged by the lender to the buyer.

Assessed Value: Usually referred to as the “tax assessed value”. The assessed value is determined by the County Tax Assessor and is used to determine annual property taxes.

Balloon Payment/Balloon Mortgage: A “Balloon mortgage” is a special type of loan, mainly used to finance commercial properties. A Balloon Mortgage has a much shorter loan term than a typical 30-year Conventional mortgage. Payments are made from between 10-15 years, after which the remaining loan balance is due in full. The advantage of a Balloon mortgage is a much lower interest rate than most other types of loans.

Conventional Mortgage: A mortgage loan not insured by any government program or agency, such as FHA loans and VA Loans. When applying for a mortgage, you are usually applying for a Conventional loan. Conventional loans can either be Conforming or Non-conforming. Conforming loans conform to loan requirements established by Fannie Mae and Freddie Mac. Non-conforming loans do not meet those same requirements but are still Conventional.

Courier Fee: When purchasing a home the title company will charge a courier fee for the cost of delivering transaction documents to the county.

Credit Score: Credit scores, sometimes referred to as FICO scores short for Fair Isaac Company. FICO developed the credit score that is most widely used by lenders. A credit score specifically measures how likely a borrower is to default on a loan. It allows lenders to determine credit risk and is based on bill payment history, credit account balances and many other factors. FICO credit scores range from 301 to 850. FICO scores over 760 will normally qualify you for the best loan rates.

Deed: A legal document filed with the county that documents the transfer of home ownership from the selling to the buyer. This is a document the buyer signs at closing.

Discount Points: A point is 1 percent of the amount of the mortgage. A point is a fee (interest charge) paid to the lender to reduce the interest rate on a home loan. 2 discount points on a $100,000 loan would equal $2,000. Points are paid upfront during loan origination.

Earnest Money: Money deposited by a buyer to indicate and good faith and the intention to complete a home purchase. In the Boise area, $1,000 is typical. Your earnest money will be deposited into an escrow account held by a real estate broker. Upon closing, the earnest money you paid will be applied toward your closing costs.

Equity: Simply put, home equity is the difference between the value of the real estate minus what, if anything, is owed to lenders. If your loan balance is $160,000 and your home is worth $200,000, your equity in the home is $40,000.

Escrow Fee/ Escrow: Charged by the title company to complete the real estate transaction and to escrow (hold and disburse) money and legal documents. The cost of which is usually split between buyer and seller.

Fair Market Value: The price at which a willing seller would sell and a willing buyer would buy. The most likely price to result in a sale.

Mortgage: Money borrowed from a lender or mortgage broker to finance the purchase of a home. Conventional loans, FHA loans, and VA loans are some of the different types of mortgage loans available.

Real Estate Glossary: A Real Estate Glossary is a “glossary” of real estate terms. Being that you have read this far you probably already knew that. Way to improve your real estate education, Lisa says she is proud of you!

Recording Fee: Charged by the County Clerk to record documents in the public records. Charges are based on the number of pages recorded.

Survey: A survey of property lines to determine the exact borders and boundaries of a particular lot. Surveys also will reflect any easements or encroachments on a property that is noted on the title of the home.

Tax Service Fee: A fee typically paid by the buyer, required by lenders, for collection and disbursement of property taxes.

Time Is Of The Essence: An unspecified time frame demanding punctual performance in a binding contract.

Title Policy (Owners): Insures the buyer against loss from title defects, liens, or rival claims of ownership on the property. In the event of a title dispute, a title insurance owner’s policy could help protect the money you have put into the home.

Title Policy (Lenders): A Lenders Title Policy covers for a lender what an owners title policy covers for a buyer.

Title: Title is the right to, or ownership of, a specific property. Buyers get a preliminary title report from a title company escrow agent usually within five business days from the agreement of a purchase contract. The report identifies all parties with a legal claim to the property, what items need to be cleared from the title before the real estate transaction can close. Once the transaction closes, the buyers will receive a final title policy recording their names as the new legal owners.