Real estate in India has seen an exponential transition over the years in terms of terminology.
The real estate industry is becoming more specialized so a whole lot of local terms are being substituted by standard vocabulary.
It is important for a homebuyer to keep himself updated with these conditions.
Here’s a terminology of real estate is most common and frequently used words in real estate particularly for homebuyers.
- Acceptance:
This is used when the homebuyer agrees to the terms of a proposal so that the contract can be created.
As soon as the seller signs your purchase offer, you are in contract for home sale, nor can any of you come back without facing the consequences, possibly losing your earnest money deposit and in the case of the seller, a potential lawsuit.
- Annual percentage rate (APR):
APR is an annual interest rate that includes the upfront fee and cost paid for obtaining a home loan.
In general, an annual percentage rate (APR) is the interest rate you pay each year on a home loan, credit card, or other line of credit.
This is represented as a % of the total balance you have paid.
Mortgage lenders are required to disclose APR so that borrowers can make a more accurate comparison of the actual cost of different loans with different charges.
- Appraisal:
It means to determine the value of jewellery, stock or, in this case, the house you are planning to buy.
A professional appraiser is one who should be a qualified, sentimental expert in real estate valuation with expertise in the local geographic areas who compares it to the recent sale of similar property by examining the property, looking at the initial purchase price, and comparing it to a similar property.
- Adjustable rate mortgage (ARM):
There are two types of traditional loans: fixed rate and adjustable rate mortgage.
In an adjustable rate mortgage, interest rates can change over the course of loans over intervals of five, seven, or 10 years.
For home owners who have been planning to stay in their home for more than a few years, this is a risky loan as rates can rise suddenly depending on market conditions.
To avoid frequent and drastic fluctuations, ARM usually imposes limits on how often and how many interest rates can vary.