Buying Advice

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On this page you can:

If you don't find the answer to your question on this page:

  • Ask me a question by emailing heidi@rivervalleygroup.com . I promise to respond within 24 hours.
  • If you'd like me to help youlook for a house, tell me exactly want you want and I'll help you find it. Click here:Find a Louisville Home for Sale.
  • If you'd rather look through all the MLS listings yourself, it's free and you won't have to fill out any forms. Just click on Louisville homes for Sale.

Why do buyers choose me, Heidi Fore, as their preferred Buyer’s Representative?Not only will I will help you find the right home to purchase, but you’ll really appreciate my help with the paperwork: contract, agency forms, and request for repairs after the home inspection.

Buyers choose me and Heidi Fore's real estate team The River Valley Realty Group, based on our:

  1. Knowledge of the purchase process
  2. Knowledge of the real estate market and Louisville neighborhoods
  3. Responsiveness by cell phone and email
  4. Negotiation skills
  5. Resume and awards

Advice on Buying: if you a first time home buyer, or just looking for a bigger house, smaller house, or different house - here is my advice:

1. SEE three or four homes each day until one just feels right. If you try to see more than that, they will all run together in your head. I will take notes on what you like and don't like about each one. When you find The One, I will do a market analysis to make sure it's priced fairly for the market.

2. LOOK past cosmetics. If there are stains on the carpet, we can write in the contract that the seller will clean them prior to closing. Don't pass up a great house that meets all your criteria of size and layout over something that can be fixed easily.

3. GET EMOTIONAL. Remember that you have to feel good in the home. Ask yourself, "is it me?" does your personality fit with the home. If you are a traditional person who wants a two story with a formal living room and dining room, don't be persuaded to buy a contemporary open floor plan ranch because it's the trend or it's in a popular neighborhood. You need to feel happy when you come home and open the door every day.

4. BE SMART. While homes should be updated to go with the times, be careful about putting too much money into large projects that won't pay off when you sell. Ask me about which projects are worthwhile, and how to save money doing them. My husband, Sean, is a builder/remodeling expert and knows all the tricks. We'll keep the condition of the home in mind when writing the contract.

5. FIGURE IT OUT. You found a home you like. It's time to make an offer. After doing thorough research, the figures of a market analysis show that the home is worth $150,000.

  • Scenario 1: The owners are motivated and have priced it to sell fast at $145k - they want a quick sale so they put it on the market at the lowest price they'd be willing to take. If you offered them the full $145k then you'd already have equity in the home of $5,000. Not everyone jacks the price up to build in "negotiating room." Some people don't want to play head games and just want to sell their house fast. If it's worth it, buy it. Somebody else will. Well priced houses go fast and they go first.
  • Scenario 2: They could have put it on the market at $165k and waited around for a few months until somebody offered them $150 for it. The market analysis will show that. Don't pay the $165k unless you are going to be in the house a very long time and have a strong emotional reason for buying it, for example if your sister lives next door and you both plan on living there 10 years. Otherwise, you may take a loss on it if you plan to sell it quickly.
  • Scenario 3: The owners listed it at $153,000 (knowing they'd take $150k) expecting a buyer not to take the full listing price, or to build in $3000 to help pay the buyer's closing costs. In my experience, sellers are only willing to pay closing costs with a full price offer or really close to a full price offer. Remember, the sellers were willing to take $150k. Here's where many buyers mess up: they read some where that they are supposed to "low ball" the first offer. This is a mistake if the home is fairly priced. Maybe it's different in Chicago, New York or California, but in the Louisville market I've seen sellers get insulted because the buyer offered $130,000 and so they turn into four year olds with a "I'll just take my ball and leave. I don't want to play with you anymore" attitude. They won't respond at all. So then the buyer gets rational because they really do like the house, and says "OK, I'll give you $145k" and the seller, who doesn't want to respond at all because their feelings are hurt, says "I might sell it to you for $152k". After the buyers take the counter offer they think, "I wonder if they would have come down lower." Everyone thinks this when they buy a house. And every seller thinks they could have gone higher. It's just human nature. In this scenario, the buyers and sellers got too wrapped up in the head game of "'I'm gonna get 'em down" and the buyers lost $2000 because they started the negotiation too low.
  • The art of negotiation is just one reason that buyers really need their own agent negotiating for their best interests. I will happily represent you and your best interests at all times. I love my job. I love helping people find a house. I've been through the negotiating process over 200 times and I've studying behavior patterns, negotiation and persuasion while working on my business degree.

Frequently Asked Questions:

Feel free to ask me for advice with no obligation or pressure to buy or sell (of course if you are working with a realtor already, I can't step on anyone's toes).

  • Why do people use Realtors? Buyers use a realtor because they want someone to make sure all the paperwork is in order and for guidance through the loan process and understanding of what inspections should be done and help writing the contract. Agency means that as your realtor, I represent you and look out for your best interests, no matter which home you choose. I am only happy if you are happy with your new home.

  • Who pays the real estate agents? Usually the seller pays the agents' commissions out of the sale price of the house. The agents only get paid at closing, so your agent should work hard for you all the way until the time the keys change hands.

  • Why not buy the house yourself from a For Sale By Owner? Well, its like asking why do you have a dentist pull your teeth when you could do it yourself: professionals use their knowledge and experience to protect you and take care of problems that could become painful situations. I'm here to relieve your stress and prevent headaches. Realtors study the laws to protect you as you sell your home, your years of investment, and guard you against liability in a lawsuit-happy world. Agents, like me, have years experience and knowledge of the home buying process. I do this every day of my life. I look for snags and pitfalls that could occur so that you can avoid them, and avoid expensive mistakes that you'll pay for later. I know the best professionals to call when you need a loan officer or closing attorney. I've seen them work and can tell you who does a good job. I don't get paid for referring lenders or anyone else, I only get paid when you are satisfied with your home buying experience, and you sign the deed and get the keys.

  • I grew up here in Louisville and know hundreds of neighborhoods across the Highlands, East End, St. Matthews, Lake Forest and Prospect. I know this town like the back of my hand. Ask me anything. The only questions I can't answer about neighborhoods are questions pertaining to fair housing laws. I always follow the rules and laws of the real estate industry.

  • I help people relocate from all over the world to Louisville Kentucky. If you haven't seen the relocation page yet, take a moment to view all the helpful phone numbers and statistics. Order a relocation package.

Here are just a few of the area neighborhoods, cities and subdivisions served by Heidi Fore's real estate team, the River Valley Realty Groups:

Louisville, Kentucky / Jefferson County, KY Cities & Subdivisions:
Louisville, Anchorage, Barbourmeade, Cherokee Triangle, Clifton, Copperfield,Crescent Hill, Douglass Hills, Eastwood, Elmcroft, Estate Ridge, Fisherville, Fox Harbor, Glenmary, Glen Oaks, Glenview, Harrods Crossing, Hunting Creek, Hurstbourne, Indian Hills, Indian Springs, Jeffersontown, Jefferson Trace, Lyndon, Lake Forest, Locust Creek, Longwood, Middletown, Norton Commons, Oakland Hills, Plainview, Polo Fields, Prospect, Saratoga Springs, Saratoga Woods, Spring Creek, Springhurst, Springview, St Matthews, Stone Lakes, Summit Ridge, Sutherland, Tucker Lake Estates, Wolf Pen Branch, Woodmont, Upper River Road.

Oldham County, Kentucky - Cities & Subdivisions:
Abbott Glen, Abbott Grove, Arbor Ridge, Ballardsville, Becker Quarry, Belknap Beach, Bentbrook Place, Briar Hill Estates, Brownsboro, Brownsboro Village, Buckner, Cardinal Harbour, Chapel View, Clarke Pointe, Covered Bridge Cross, Crestwood, Fairways at Glenoaks, Goshen, Grand Villa, Harmony Landing, Harmony Village, Hillcrest, Huckleberry Hill, Hunting Creek Estates, LaGrange, LeSprit, Moser Farms, North Ridge Farms, Old Anita Springs, Overlook on Covered Bridge, Paramont Estates, Pewee Valley, Ridgeview Place, River Glen, Spring Hill, Stonefield Trace, Summerfield by the Lake, Taylor Creek Woods, Westport, Woods of Hillview, Woods of Pewee Valley

Jefferson County, Kentucky & Oldham County, KY - Partial List of Zip Codes:
40206 40207 40222 40223 40241 40242 40243 40245 40299 40014 40023 40026 40031 40059

A lot of times you just know the name of the street you want to be "off of", like Ballardsville, Bardstown Rd, Blankenbaker Pkwy, Brownsboro Rd, Chamberlain Lane, Colonel Anderson Pkwy, Covered Bridge, Deep Creek, Highway 22, Hwy 42, Hwy 329, Hurstbourne Pkwy, I-265, I-64, Lime Kiln Rd, Linn Station Rd, Lyndon Lane, New LaGrange Rd, River Road, Shelbyville Rd, Taylorsville Rd, Westover, Westport Rd, Wolf Pen Branch Rd, or Worthington Ln.

Heidi and Heidi Fore's real estate team, the River Valley Realty Group can find for you homes with 2 bedrooms, 3 bedrms, 4 BR, 5 bedrooms or more. If you need 1.5 bathrooms, 2 baths or 3 bathrooms minimum, we can find it faster. Do you require a 2 car garage, 2.5 car garage or 3 car garage: attached or detached? Perhaps a fenced yard with gazebo, pool or tennis court. What about a basement? Finished basement with media room or exercise room or wet bar? We can also find patio homes or condominiums for any price range. If a 1st floor master bedroom or master bath is preferred, many new homes can be custom built to include these and many more conveniences. We can represent you with most builders in the Louisville area and Oldham County. Do you prefer a house with acreage, a golf course community home, or one of the areas fine gated communities? Call Heidi at 502-554-9400 for a list of available luxury homes and estate properties in Louisville, Prospect or Oldham County.

Heidi Fore - real estate agent

Heidi Fore has been a real estate agent since 2002, and sl. She is from Louisville Kentucky, and went to Sacred Heart Academy and Xavier University where she studied business and marketing.

Heidi is married to her high school sweetheart, Sean Fore, and they have two little boys, Charlie and Sam.

Louisville Ky real estate agent Heidi Fore

If you are thinking about moving

If you are moving to Louisville be sure you get a copy of the book "How to Buy A Home In Louisville Kentucky" by either ordering it on Amazon.com or buying one of the copies in local bookstores, or calling 502-554-9400 and request to have one shipped to you for free.

You will find the information on www.RiverValleyGroup.com very useful for finding houses for sale in Florence Ky.

If you are thinking about getting married you will love the Louisville Wedding Planner part of our site.

If you are thinking about having a baby, you'll appreciate the Having a Baby in Louisville Ky part of our site.

if you are thinking about a different way to sell houses, contact us about a career opportunity as an important part of the Heidi Fore Real Estate Team, the River Valley Group

real estate louisville kentucky agents keller williams realty

The River Valley Group:

Heidi Fore

Sean Fore

Vicki Yates

Lori Hernandez

Tim Mattingly

Anita Brown

Tony Goren

Laura Guess

Crystal Corrigan

These are just some of the things to consider when buying or selling a house call me to talk about the laws and numbers and costs to consider before you make a mistake that could really cost you in the future.*Remember, you should have a good real estate attorney and accountant to assist you.

WHY DO BUYERS LOVE WORKING WITH Heidi Fore's real estate team The River Valley Realty Group TO FIND A HOUSE?

"I think that Heidi Fore's real estate team The River Valley Realty Group cared a lot about our happiness. It was almost as if we had someone in our own family helping us out, rather than a Realtor. They were always so nice and so helpful, any time of day or night (and there were many long nights with lots of complex questions). They went above and beyond in everything they did and it showed. Every house we buy/sell in the future will go through them!

Their answers were thorough, well-researched, well-crafted, and thoughtful. They never told us anything they weren't 100% sure about, and since they answered every question we ever had, plus more, we think they're pretty knowledgeable. They know the area and they know what they're doing. There couldn't be a team of more experienced, more professional, more friendly Realtors anywhere in the world!

I would recommend Heidi and the team to ANYONE! You won't find a better set of realtors anywhere in the world."

Elliott & Kelly DeAtley

Another Recommendation from our Past Clients:

"Heidi, wanted to drop a note and let you know what a great team you have. Coming in from out of town, Niki lined up a complete list of condos for our daughter. We decided to make an offer the same day. Niki came back to the office that evening,after another appointment and worked with us from 6:30 to 8:30, drafting the offer and explaining the process to the first time buyer.

Niki stayed on top of it on Sunday and we reached agreement on Tuesday. Her advice every step of the way was spot on.

With the offer moving forward, Vicki is now in the loop. She seems like the Super Woman of the back room details to get this done! It is a pleasure to work with such a great team."

Thanks again,

Richard Poncheri
Mgr. Government Accounting
GE Aviation



Buying a house

All of the calculator tools below will help answer these questions:

MONTHLY HOUSE PAYMENT CALCULATOR

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DOWN PAYMENT CALCULATOR

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CREDIT SCORE CALCULATOR

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MORTGAGE QUALIFYING INCOMES CALCULATOR

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DOWNPAYMENT ASSISTANCE CALCULATOR

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LOAN CALCULATOR

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LOAN COST CALCULATOR

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Buying Commercial Property
Call Larry Adams of RE/MAX Commercial 502-599-8240
Specializing in C-Stores, Buildings to Lease, Gas Stations, Corporate Offices and Restaurants for sale


GLOSSARY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
adjustable-rate mortgage (ARM)
A mortgage whose interest rate changes periodically based on the changes in a specified index.
View a list of common indices.
adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).
adjustment period
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).
amortization
The repayment of a mortgage loan by installments with regular payments to cover the principal and interest.
amortization term
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.
annual percentage rate (APR)
The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance, and loan origination fee (points).
application
A form, commonly referred to as a 1003 form, used to apply for a mortgage and to provide information regarding a prospective mortgagor and the proposed security.
appraisal
A written analysis of the estimated value of a property prepared by a qualified appraiser.
appraiser (return to top)
A person qualified by education, training, and experience to estimate the value of real property and personal property.
appreciation
An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.
asset
Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).
assignment
The transfer of a mortgage from one person to another.
assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.
assumption
The transfer of the seller's existing mortgage to the buyer.
assumption clause
A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property.
assumption fee
The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.
balance sheet (return to top)
A financial statement that shows assets, liabilities, and net worth as of a specific date.
balloon mortgage
A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term.
balloon payment
The final lump sum payment that is made at the maturity date of a balloon mortgage.
bankrupt
A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.
bankruptcy
A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring his or her assets to a trustee.
basis point
A basis point is 1/100th of a percentage point. For example, a fee calculated as 50 basis points of a loan amount of $100,000 would be 0.50% or $500.
before-tax income
Income before taxes are deducted.
beneficiary
The person designated to receive the income from a trust, estate, or a deed of trust.
binder (return to top)
A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.
biweekly payment mortgage
A mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage, and they are usually drafted from the borrower's bank account. The result for the borrower is a substantial savings in interest.
blanket mortgage
The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.
bond
An interest-bearing certificate of debt with a maturity date. An obligation of a government or business corporation. A real estate bond is a written obligation usually secured by a mortgage or a deed of trust.
breach
A violation of any legal obligation.
bridge loan
A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as "swing loan."
broker
A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.
buydown mortgage (return to top)
A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower's monthly payments during the first few years of a mortgage. A permanent buydown reduces the interest rate over the entire life of a mortgage.
call option (return to top)
A provision in the mortgage that gives the mortgagee the right to call the mortgage due and payable at the end of a specified period for whatever reason.
cap
A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease.
capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.
cash-out refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.
Certificate of Eligibility
A document issued by the federal government certifying a veteran's eligibility for a Department of Veterans Affairs (VA) mortgage.
Certificate of Reasonable Value (CRV)
A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a VA mortgage.
certificate of title
A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner.
chain of title
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.
change frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).
clear title
A title that is free of liens or legal questions as to ownership of the property.
closing
A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs. Also called "settlement."
closing cost item (return to top)
A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing costs are made up of individual closing cost items such as origination fees and attorney's fees. Many closing cost items are included as numbered items on the HUD-1 statement.
Click here to see some closing cost times from a HUD-1 statement. Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include an origination fee, an attorney's fee, taxes, an amount placed in escrow, and charges for obtaining title insurance and a survey. Closing costs percentage will vary according to the area of the country.
closing statement
Also referred to as the HUD-1. The final statement of costs incurred to close on a loan or to purchase a home.
cloud on title
Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by a quitclaim deed, release, or court action.
collateral
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.
collection
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.
combination loan
With this type of loan, you receive a first mortgage for 80 percent of the loan amount, and a second mortgage at the same time for the remainder of the balance. If avoiding PMI (mortgage insurance) is important to you, consider combination loans--known as 80/10/10 loans or 80/20's.
combined loan-to-value (CLTV)
The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value.
co-maker
A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment. See endorser.
commission
The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a percentage of the price of the property or loan.
commitment letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also known as a "loan commitment."
common areas
Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.
Community Home Improvement Mortgage Loan
An alternative financing option that allows low- and moderate-income home buyers to obtain 95 percent financing for the purchase and improvement of a home in need of modest repairs. The repair work can account for as much as 30 percent of the appraised value.
community property (return to top)
In some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.
comparables
An abbreviation for "comparable properties"; used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration; they have reasonably the same size, location , and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.
condominium
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.
condominium conversion
Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.
conforming loan
The current conforming loan limit is $322,700 and below. Conforming loan limits change annually.
construction loan
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
consumer reporting agency (or bureau)
An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources.
contingency
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.
contract
An oral or written agreement to do or not to do a certain thing.
conventional mortgage
A mortgage that is not insured or guaranteed by the federal government.
convertibility clause
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified timeframes after loan origination.
convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.
cooperative (co-op)
A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
corporate relocation
Arrangements under which an employer moves an employee to another area as part of the employer's normal course of business or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office capacity.
cost of funds index (COFI)
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco.
covenant
A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.
credit
An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.
credit history
A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.
credit report
A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.
credit repository (return to top)
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.
debt (return to top)
An amount owed to another.
deed
The legal document conveying title to a property.
deed-in-lieu
A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure.
deed of trust
The document used in some states instead of a mortgage; title is conveyed to a trustee.
default
Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.
delinquency
Failure to make mortgage payments when mortgage payments are due.
deposit
A sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.
depreciation
A decline in the value of property; the opposite of appreciation.
down payment
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
due-on-sale provision (return to top)
A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.
earnest money deposit (return to top)
A deposit made by the potential home buyer to show that he or she is serious about buying the house.
easement
A right of way giving persons other than the owner access to or over a property.
effective age
An appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.
effective gross income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.
eighty-ten-ten loan
See "combination loan".
encumbrance
Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.
endorser
A person who signs ownership interest over to another party. Contrast with co-maker.
Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
equity (return to top)
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.
escrow
An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.
escrow account
The account in which a mortgage servicer holds the borrower's escrow payments prior to paying property expenses.
escrow analysis
The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance, and other bills when due.
escrow collections (return to top)
Funds collected by the servicer and set aside in an escrow account to pay the borrower's property taxes, mortgage insurance, and hazard insurance.
escrow disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.
escrow payment
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Known as "impounds" or "reserves" in some states.
estate
The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.
eviction
The lawful expulsion of an occupant from real property.
examination of title
The report on the title of a property from the public records or an abstract of the title.
Fair Credit Reporting Act (return to top)
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.
fair market value
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
Fannie Mae
A congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds.
Fannie Mae's Community Home Buyer's Program
An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income family's buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.
fee simple (return to top)
The greatest possible interest a person can have in real estate.
FHA mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.
first adjustment
When you can expect the first rate adjustment in your ARM loan.
first mortgage
A mortgage that is the primary lien against a property.
fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.
fixed second mortgage
See home equity loan.
flood insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.
foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
fully amortized ARM (return to top)
An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.
good faith estimate (return to top)
An estimate of charges which a borrower is likely to incur in connection with a settlement.
hazard insurance (return to top)
Insurance protecting against loss to real estate caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy.
home equity line of credit
a credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. The minimum payment due each month is interest only.
home equity loan
a loan secured by a second deed of trust on a house, typically used as a home improvement loan.
housing ratio
The ratio of the monthly housing payment in total (PITI - Principal, Interest, Taxes, and Insurance) divided by the gross monthly income. This ratio is sometimes referred to as the top ratio or front end ratio.
HUD
The U.S. Department of Housing and Urban Development.
index (return to top)
A published interest rate to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. Some commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI).
Impound Account
An impound account is an account established by the lender to pay a borrower's tax and insurance costs. The borrower's monthly mortgage payment is then increased to cover these costs, with the additional amount being held in the impound account and disbursed by the lender when the payments are due. Lenders typically prefer this arrangement because it reduces the possibility of a lapse in tax or insurance payments that could diminish the value of the lender's investment (your house). Therefore, while it is often possible to opt out of an impound account it will result in additional charges.
Interest-only loan option
Loan payments have two components, principal and interest. An interest-only loan has no principal component for a specified period of time. These special loans minimize your monthly payments by eliminating the need to pay down your balance during the interest-only period, giving you greater cash flow control and/or increased purchasing power.
jumbo mortgage (return to top)
The current loan limit for a conforming loan is $322,700. Loan amounts of $322,701 and above are considered non-conforming or jumbo mortgages and are usually subject to higher pricing.
lien (return to top)
An encumbrance against property for money due, either voluntary or involuntary.
lender
The bank, mortgage company, or mortgage broker offering the loan.
LIBOR
LIBOR stands for London Inter-Bank Offered Rate. This is a favorable interest rate offered for U.S. dollar deposits between a group of London banks. There are several different LIBOR rates, defined by the maturity of their deposit. The LIBOR is an international index that follows world economic conditions. LIBOR-indexed ARMs offer borrowers aggressive initial rates and have proven to be competitive with popular ARM indexes like the Treasury bill.
lifetime cap
A provision of an ARM that limits the highest rate that can occur over the life of the loan.
loan to value ratio (LTV)
The unpaid principal balance of the mortgage on a property divided by the property's appraised value. The LTV will affect programs available to the borrower and generally, the lower the LTV the more favorable the terms of the programs offered by lenders.
lock period
The amount of time that a lender will guarantee a loan's interest rate. Once you've locked in the interest rate on a loan, the lender will guarantee that rate for a certain period of time, usually for 30, 45 or 60 days.
lock-in
A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.
margin (return to top)
The number of percentage points a lender adds to the index value to calculate the ARM interest rate at each adjustment period.
mortgage
A legal document that pledges a property to the lender as security for payment of a debt
mortgage disability insurance
A disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time.
mortgage insurance (MI)
Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default. Usually required for loans with an LTV of 80.01% or higher.
mortgagee
The person or company who receives the mortgage as a pledge for repayment of the loan. The mortgage lender.
mortgagor
The mortgage borrower who gives the mortgage as a pledge to repay.
no income verification (return to top)
See "stated income".
non-conforming loan
Also called a jumbo loan. Conventional home mortgages not eligible for sale and delivery to either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because of various reasons, including loan amount, loan characteristics or underwriting guidelines. Non-conforming loans usually incur a rate and origination fee premium. The current non-conforming loan limit is $322,701 and above.
note
A written agreement containing a promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand.
origination fee (return to top)
A fee imposed by a lender to cover certain processing expenses in connection with making a real estate loan. Usually a percentage of the amount loaned, such as one percent.
owner financing
A property purchase transaction in which the property seller provides all or part of the financing.
periodic cap (return to top)
The maximum rate increase for a specific period for a specific loan (ARM) only.
PITI
Principal, interest, taxes and insurance--the components of a monthly mortgage payment.
Planned Unit Developments (PUD)
A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels.
points
Charges levied by the mortgage lender and usually payable at closing. One point represents 1% of the face value of the mortgage loan.
prepaids
Those expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, rent, etc.
prepayment penalty
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule.
principal
Amount of debt, not including interest. The face value of a note or mortgage.
private mortgage insurance (PMI)
Insurance provided by nongovernment insurers that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages greater than 80%.
qualifying ratios (return to top)
The ratio of your fixed monthly expenses to your gross monthly income, used to determine how much you can afford to borrow. The fixed monthly expenses would include PITI along with other obligations such as student loans, car loans, or credit card payments.
rate (return to top)
The annual rate of interest on a loan, expressed as a percentage of 100.
rate cap
A limit on how much the interest rate can change, either at each adjustment period or over the life of the loan.
rate lock-in
A written agreement in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set period of time.
rebate
Compensation received from a wholesale lender which can be used to cover closing costs or as a refund to the borrower. Loans with rebates often carry higher interest rates than loans with "points" (see above).
refinancing
The process of paying off one loan with the proceeds from a new loan using the same property as security.
residential mortgage credit report (RMCR)
A report requested by your lender that utilizes information from at least two of the three national credit bureaus and information provided on your loan application.
seller carry back (return to top)
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage.
stated/documented income
Some loan products require only that applicants "state" the source of their income without providing supporting documentation such as tax returns.
survey
A print showing the measurements of the boundaries of a parcel of land, together with the location of all improvements on the land and sometimes its area and topography.
tenants-in-common (return to top)
An undivided interest in property taken by two or more persons. The interest need not be equal. Upon death of one or more persons, there is no right of survivorship.
term
The period of time which covers the life of the loan. For example, a 30 year fixed loan has a term of 30 years.
title
The evidence one has of right to possession of land.
title insurance
Insurance against loss resulting from defects of title to a specifically described parcel of real property.
title search
An investigation into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear ownership.
total debt ratio
Monthly debt and housing payments divided by gross monthly income. Also known as Obligations-to-Income Ratio or Back-End Ratio.
Truth-in-Lending Act (return to top)
A federal law requiring a disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.
Veterans Administration (VA)
A government agency guaranteeing mortgage loans with no down payment to qualified veterans.
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River Valley Group realtors work out of these Keller Williams Realty Locations:
Louisville Kentucky real estate office:
Keller Williams Realty Louisville East
1230 S Hurstbourne Pkwy Suite 100
Louisville KY 40222
Office phone 502-265-5818 to speak directly to an agent.
Southern Indiana real estate office:
Keller Williams Realty Southern Indiana
4304 Charlestown Rd.
New Albany,IN
Office phone 812-944-7024 or call an agent directly at 812-214-4433
Northern Kentucky real estate office:
Keller Williams Realty Services
2216 Dixie Highway Suite 100
Fort Mitchell KY 41017
Office phone 859-240-0727 or call an agent directly at 859-982-9172      
Cincinnati Ohio real estate office:
Call Jennifer Haubner Vories at Keller Williams Realty West Chester
7395 Kingsgate Way
West Chester, OH 45069
513-874-3300

 

Copyright © 2012 Heidi Fore