Convertibility - The ability to change a loan from an adjustable rate schedule to a fixed rate schedule. Cooperative - A form of ownership in a multi-unit complex; the purchasers own shares of the entire complex rather than owning individual units. Credit Rating - A report ordered by a lender from a credit bureau to determine if the borrower is a good credit risk. Default - A breach of a mortgage contract (such as not making monthly payments). Density - The number of homes built on a particular acre of land. Allowable densities are usually determined by local jurisdictions. Downpayment - The difference between the sales price and the mortgage amount on a home. The downpayment is usually paid at closing. Due-on-Sale - A clause in a mortgage contract requiring the borrower to pay the entire outstanding balance upon sale or transfer of the property. A mortgage with a due-on-sale clause is not assumable. Earnest Money - A sum paid to the seller to show that a potential purchaser is serious about buying. Easement - Right-of-way granted to a person or company authorizing access to the owner’s land; for example, a utility company may be grated an easement to install pipes or wires. An owner may voluntarily grant an easement, or in some cases, be compelled to grant one by a local jurisdiction. Equity - The difference between the value of a home and what is owed on it. Escrow - The handling of funds or documents by a third party on behalf of the buyer and/or seller. Federal Housing Administration (FHA) - A federal agency which insures mortgages that have lower downpayment requirements than conventional loans. ABOUT THE AUTHOR
Mark Mathis is a building designer and publisher of several stock house plan websites and informational resources including http://www.HousePlanCentral.com, http://www.HousePlanGallery.com, and http://www.moneytalks-bswalks.com. Be sure to visit each site and subscribe to our eNewsletters to receive special offers, promotions, and subscriber-only features.