David Lader Explains 4 Commonly Misunderstood Real Estate Terms
Real estate is a complex and vast topic which contains its own glossary of terms. Many of these are often confusing for people who are new to the industry, and they can be intimidating to anyone trying to get their foot in the door. David Lader is a real estate expert; here he explains some of the more commonly misunderstood real estate terms you may come across.
Amortization is the reduction of debt resulting from regular payments of both principal and interest. Most common loans work on amortized structures, meaning that by the end of the loan term, you will have paid off the loan amount as well as the interest, assuming you made all of your payments on time.
2) Fair Market Value
This is a value estimate based on the highest price a buyer would be willing to pay on a property as well as the lowest amount a seller would reasonably take for the property.
A land survey is a map produced by a professionally licensed surveyor that shows the results of land measured to include elevations, boundaries, improvements, and its relationship with surrounding areas. Surveys are often required by a loan lender as a means of ensuring them that a building is legally within the boundaries of the property on which it stands.
This is a third party analysis of a loan application to determine the risk factors for the lender. This process involves a credit check as well as an evaluation of the overall quality of the property in question. Underwriting usually takes anywhere from a few days to as long as several months.