Glossary of
Real Estate Terms

Your guide to common closing terms

Inspection

A home inspection is a common contingency requested by buyers when making an offer on a property. A licensed home inspector will check major systems, structural components, and appliances in order to identify needed repairs before the settlement of the sales contract. Following the home inspection, buyers may request repairs or changes or may exercise their contingency in order to void the contract for the purchase of the home.

I

Interest Rate

An interest rate is the amount of money charged by a lender and is based on a percentage of the principal borrowed. Interest rate is normally expressed as an annual percentage rate and may be charged either at a fixed rate agreed upon at the time of purchase or at an adjustable rate, which fluctuates with periodic fluctuations in the economy.

I

Lender

A lender is a bank, credit union, or financier who provides funds for some purpose. Funding for home loans is called mortgages, and mortgage lenders may provide a variety of financing scenarios for borrowers, including 30-year and 15-year fixed-rate mortgages, adjustable-rate mortgages, balloon mortgages, and other options.

L

Lender’s Title Insurance

Lender’s title insurance is a required purchase and is designed to protect the lender’s financial interest in the property in the event of a discrepancy of ownership or a “cloud on the title.” Lender’s title insurance is solely for the benefit of the lender; homeowner protection, which is optional, is provided by homeowner’s title insurance.

L

Liens

A lien is a legal claim secured by a property until such time as debt is paid. Liens against real property can include a mortgage lien guaranteeing repayment of the purchase loan, a mechanic’s lien guaranteeing repayment to a contractor or workman for repairs or improvements on the home, and a tax lien guaranteeing payment of personal property taxes.

L
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.