An agreed-upon addition signed by all parties to the original contract. It details the specific terms, clauses, sections and definitions to be changed in the original contract but otherwise leaves it in full force and effect.
Annual Household Income
Collective income from everyone in your household before taxes or other deductions are taken, investment income or dividends, Social Security benefits, alimony, and retirement fund withdrawals.
A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.
An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property.
APR refers to the annual percentage rate, which is the interest rate you'll pay expressed as a yearly rate averaged over the full term of the loan. APR includes lender fees in the rate, so it's usually higher than your mortgage interest rate.
The practice of real estate brokers and their agents representing a buyer in a real estate transaction
Generally 2 to 5 percent of the purchase price include lender fees, recording fees, transfer taxes, third-party fees such as title insurance, and prepaids and escrows such as homeowner's insurance, property taxes, and HOA fees..
A document that provides an itemized listing of the funds that were paid or disbursed at closing.
An offer on a home has been made and the seller has accepted it, but the finalized sale is contingent upon certain criteria that have to be met. These criteria, or contingencies, typically fall under three major categories: appraisal, home inspection and mortgage approval.
Ideal for credit scores above 680/700 3% down for first time homebuyers 5% minimum down payment
Cost to Close
Amount of money you need to bring to the closing, which will include your closing costs, any down payment, and escrows for property taxes and homeowners insurance.
This determines what programs you qualify for, the interest rate you are able to get, and the mortgage insurance monthly amount (Conventional only). FHA requires a minimum of 580, USDA a minimum of 640, Conventional a minimum of 620 (we recommend being above 680/700), and VA a minimum of 600
Debt to Income
This is your gross monthly income compared to the potential housing payment for the front ratio and your gross monthly income compared by your total debt payments and housing payment for the back ratio. Most programs require your back ratio to be under 50%, but some allow for higher (FHA – 56%) or require lower ratios (USDA – 41%)
The legal document conveying title to a property.
A cash payment of a percentage of the sales price of the home that buyers pay at closing. Different lenders and loan programs require various down payment amounts such as 3 percent, 5 percent, or 20 percent of the purchase price.
Earnest Money Deposit
Also known as an escrow deposit, earnest money is a dollar amount buyers put into an escrow account after a seller accepts their offer. Buyers do this to show the seller that they're entering a real estate transaction in good faith.
Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.
A homeowner's financial interest in a property. Equity is the difference between the fair market value of the
property and the amount still owed on its mortgage and other liens.
Putting something of value, like a deed or money, in the custody of a neutral third party until certain conditions are met.
Homeowner's Association Fee (HOA)
A fee required when you buy a home located within a community with an HOA that typically pays for maintenance and improvements of common areas and may include the use of amenities.
Homestead Tax Credit
A slight reduction in your property taxes for a property you own and also occupy as your primary residence.
Part of the closing costs of a home purchase and may include an application fee, attorney fees, and recording fees. The lender's underwriting or origination fee is usually 1 percent of the loan amount.property.
Loan Pre Approval
The lender has checked your credit and verified your documentation to approve a specific loan amount (usually for a particular period, such as 90 days).
A computer-based service that provides real estate professionals with detailed listings of most homes current on the market. The public can access much of this kind of information through websites like Zillow.
A loan from a bank, credit union, or other financial institution that relies on real estate for collateral. The bank provides money to buy the property, and the borrower agrees to monthly payments until the loan is fully repaid.
Prepaids are expenses paid at the closing for bills that are not technically due yet, such as property taxes, homeowner's insurance, mortgage insurance, and HOA fees.
A set of documents, required in the state of Iowa to be completed by the seller of a home, listing any known issues with the property and any remodel projects completed during the time they owned the home.
Rate Buy Down
If you want to lower your monthly payment and have extra credits or cash to use, you can buy down your interest rate. These are called points or basis points. They are a percentage of your loan amount. If you have a loan amount of $100,000 and it costs 1 point to lower your rate from 4.75% to 4.5%, you will have to pay an extra $1,000.
Depending on the loan program, you may be required to show reserves to qualify. Reserves are any liquid asset (cash, 401k, Certificate of Deposit, or investment portfolio) left over after the required cash to close amount.
Tax Proration Credit
In Iowa, we pay our property taxes a year behind. When someone sells their house, they will still owe a portion of their taxes come March or September when taxes are due. The seller can always go to the county to make the payment, but instead of paying $1500-$2500 in one lump sum, this installment can be credited to the buyer and included in the cash to close as a credit that reduces the amount a buyer needs to bring to closing.
A lawyer's or title company's professional judgment as to the state of title for a given piece of real property. This is issued following a title search by the attorney. The opinion usually describes whether the title is clear and marketable or whether it is encumbered.
Any closing costs charged by someone other than your lender, typically including fees for an appraisal, a property survey, a title search, owner's and lender's title insurance, and sometimes an attorney.
Instead of paying mortgage insurance each month, you can pay for it in a lump sum at closing. This will usually save you at least $1000 versus paying it monthly, but does require you to bring an additional amount to closing. This is also based on your credit score, loan program, down payment, and other factors.
600 minimum score,
Income limits based on county,
Debt-to-income limits – 29%/41%
Reduced Mortgage Insurance – 0.35
Eligible veterans receive 100% financing
No mortgage insurance
The local laws dividing cities of counties into different zones according to allowed uses. From Single-Family Residential to Commercial to Industrial.