Welcome to the final blog in our series covering the ABCs of Real Estate! These blogs break down some of the more common terms in Real Estate to make them (and the entire home buying or selling process) easier to understand. We wrap it all up this week with letters U through Z (with a slight cheat on the letter X):
U: Upfront costs: Upfront costs are fees not included in closing costs, and are paid out of pocket once the offer on the home has been accepted. They can include the earnest money, inspection fee, and appraisal fee.
V: Veteran’s Administration (VA) loan: A housing loan backed by the government and available only to eligible veterans, their spouses, and other beneficiaries. They require no down payment or mortgage insurance, which can mean a significantly lower monthly payment for borrowers.
W: Warranty: A binding guarantee by one party to another saying that certain conditions are true or will happen.
X: EXamination of title: Interpretation and research done to explore the legitimacy of a title. This is completed before the property is sold to ensure that there are no competing claims on that property.
Y: Yield spread premium: Commission paid to the mortgage broker by the lender for giving the borrower a higher interest rate or above market mortgage rate on a loan in exchange for lower upfront costs.
Z: Zoning: Laws regulating land use in a particular area. Governments (usually a local town, township, or municipality) sets the zoning regulations for their area. Zoning areas may include types such as single and multi-unit residential, commercial, industrial, or agricultural.