Important Real Estate Terms - a Thru C

Real estate mumbo-jumbo can get confusing! Buying a house is a big step and accomplishment in one's life. Wouldn't it be a more pleasing and smooth process if the paperwork included more easily understood terms? Until those big words are put into plain, simple English, let me give you the definition to a few important real estate terms you will run across at some point.

ACRE - An acre is how land is measured. One acre is equal to 43,560 square feet. This is an important term you'll see when buying a home with land or just land by itself. The land size will most likely be in acreage, not in square feet or yards, etc.

ADJUSTABLE RATE MORTGAGE (also referred to as ARM) - This is a mortgage loan with an interest rate that fluctuates up and down over the length of the loan. If the interest rates are unpredictable, an ARM would make a good choice. If the rates fall, you are at the advantage. If it rises, of course, you will have a higher monthly payment than the original. On a better note, with Adjustable Rate Mortgages, there are limits on how often and by how much the interest rate varies. That keeps you from suffering through constant and drastic rate changes.

ANNUAL PERCENTAGE RATE - (also known as APR) This refers to the actual cost of borrowing money. It is basically an annual interest rate which is different from your loan rate. APR does not affect your monthly payments - it is merely used to determine the true cost of the loan. It gives you a better estimate of what you are paying over a year's time. Lenders are required to show you their APR and it is usually located near the loan's interest rate.