The acquisition cost of a property is the total price and all associated fees required to complete the transaction and take ownership of the property.
Buy-Up refers to the payment of points, or a rebate, to the borrower for taking a loan with an above-market interest rate. Commonly referred to as 'negative points,' this payment helps offset fees and other settlement costs associated with the loan.
A cash purchase in real estate refers to acquiring property without the use of financing or loans, where the buyer pays the full purchase price in cash.
Closing is the final step in executing a real estate transaction where ownership is officially transferred from the seller to the buyer.
Closing costs are the various fees and expenses payable by both the seller and buyer at the time of a real estate closing. These costs can vary widely and include items such as brokerage commissions, lender fees, and title insurance premiums.
A counteroffer involves the rejection of an initial offer to buy or sell a property, accompanied by a substitute offer with different terms. It is a critical component in real estate negotiations, encompassing factors like price, financing arrangements, closing costs, and more.
In real estate and accounting, a debit refers to an amount that is charged to a party, either in the context of a closing statement or as entries on the left side of a general ledger.
Disposition costs refer to the various expenses incurred by a seller in the process of selling a property. These can include real estate agent commissions, legal fees, closing costs, and transfer taxes.
Filing fees are charges associated with documents that are recorded in the courthouse in connection with a sale, including deed-recording, mortgage-recording, and mortgage-release charges.
A Good Faith Estimate (GFE) is a vital document provided to mortgage applicants detailing the estimated costs associated with closing a loan. This disclosure is mandated under the Real Estate Settlement Procedures Act (RESPA) and must be given within three days of the loan application submission.
Junk fees are charges levied by a lender at closing in the hope that the borrower will neither question them nor abort the transaction. These fees often are of a questionable nature but are relatively small compared to other legitimate closing costs.
Loan closing, often simply referred to as closing, is the final step in the mortgage process where the borrower and lender finalize various agreements and settle necessary payments to transfer ownership of a property.
Loan points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also referred to as 'buying down the rate.'
A mortgage discount refers to an initial amount deducted by lenders from the principal of a loan, often represented in terms of 'points.'
Points are fees paid to lenders to reduce the interest rate or secure a mortgage loan. Each point is 1% of the loan principal, affecting the overall loan cost and effective interest rate.
Proration refers to the division of expenses or income proportionally based on the time used or the amount consumed between parties in a real estate transaction. This ensures fair allocation of costs such as property taxes, utilities, and homeowner association fees based on the agreed terms.
A Rate Lock secures a specified interest rate for a mortgage, assuring homebuyers or refinancers that their rate will not increase between the date of the agreement and the closing date of the loan, provided the borrower closes within the specified time frame and there are no changes to their application.
The Real Estate Settlement Procedures Act (RESPA) is a federal law intended to provide greater transparency and knowledge to consumers about real estate transactions. It stipulates how mortgage lenders must treat applicants for federally-related real estate loans on properties containing 1–4 dwelling units. RESPA aims to eliminate unnecessary fees and ensure borrowers receive pertinent information to facilitate informed comparison shopping.
Recording fee closing costs are charges incurred during the real estate transaction to record documents, such as the deed or mortgage, in public records. These fees are mandatory and generally paid to local government offices to ensure the transaction is officially noted and legally recognized.
In real estate, settlement, also known as closing, is the final step in executing a real estate transaction, where the buyer finalizes their mortgage, pays closing costs, and the title is transferred from the seller to the buyer.
Stipulations are specific terms or conditions outlined within a written contractual agreement. These conditions must be met for the contract to be enforceable or finalized.
Title insurance is a protective policy that assures the transfer of clear title in real estate transactions. It protects against potential disputes over ownership and ensures that both lenders and buyers have security over any claims that might arise after the property transfer.
Upfront charges refer to various fees and costs that a homeowner must pay at the closing of a real estate transaction. These include points, recording fees, mortgage title policy, appraisal fees, and credit report fees.
