15 Helpful Real Estate Acronyms
Buying a home for the first time presents many challenges. The whole process can seem confusing and daunting, especially when you hear real estate acronyms like FSBO, PITI, and APR. It can be impossible to understand all the acronyms your agent throws at you if you don’t do your research beforehand. Luckily, we are here to help you start your research with 15 helpful real estate acronyms every homebuyer should know.
- MLS: Multiple Listing Service: The Multiple Listing Service is a database used by real estate agents and brokers to list and discover properties in the local area.
- HOA: Homeowners Association: It is common for condos and townhomes to be part of a homeowners association with set rules, regulations, and HOA fees. These fees are used to contribute to the basic maintenance of the community.
- CCR: Conditions, Covenants, Restrictions: The rules for HOA properties are known as conditions, covenants, and restrictions.
- ABR: Accredited Buyer Representative: An accredited buyer representative is a specialized education for real estate agents awarded by the National Association of Realtors.
- APR: Annual Percentage Rate: An essential aspect of the home buying process is deciding which loan is right for you. APR offers fixed interest rates throughout the life of a loan.
- ARM: Adjustable-Rate Mortgage: Unlike APR, the adjustable-rate mortgage is a loan where the interest rate fluctuates over the life of the loan.
- PITI: Principal, Interest, Taxes, and Insurance: The principal, interest, taxes, and insurance make up most of loan payments. These elements are what you will pay to your lender each month.
- FSBO: For Sale by Owner: When a property has the real estate acronym FSBO, it means For Sale by Owner. Need help with an FSBO? Our agents often assist buyers with negotiating and the paperwork with home sellers.
- REO: Real Estate Owned: Real estate-owned properties are owned by lenders instead of homeowners, also referred to as foreclosure. These properties are usually offered at a discount, but keep in mind that they are sold “as is” and can present unique challenges.
- LE: Loan Estimate: After you complete a mortgage application, you will receive a loan estimate that includes the estimated interest rate, how much you will pay monthly, and closing costs. Your LE is an essential part of choosing the right mortgage lender.
- LTV: Loan to Value: The loan to value ratio is the amount of a loan divided by the home’s value. Lenders use LTV to calculate the mortgage they will offer to a borrower.
- FHA: Federal Housing Administration: The Federal Housing Administration offers loans for homebuyers with a smaller down payment for buyers with lower credit scores.
- PMI: Private Mortgage Insurance: If a down payment is less than 20%, lenders may ask borrowers to apply for private mortgage insurance. PMI will require a fee to protect the lender from a defaulted loan.
- CMA: Comparative Market Analysis: A comparative market analysis is a tool used to evaluate the value of a home based on other properties that have sold in the nearby area.
- FMV: Fair Market Value: Fair market value is the price a property may sell for in an open market.
Are you ready to start your search for the perfect home on the Crystal Coast? Contact one of our Bluewater Real Estate agents, and we will help you navigate the nuances of the coastal North Carolina market.
Need more real estate tips? Read How to Buy a House in a Seller’s Market and 5 Major Mistakes Buyers Buyers Make in a Seller’s Market.