BUYER'S TERMS CREDIT REPORT FEE The fee charged by the lender to obtain a credit report on the buyer. APPRAISAL FEE The amount paid for the lender's appraisal of the property. POINTS Fees charged by the lender to offset their interest rate, if the rate is below the prevailing market rate. One point equals one percentage point - one point on a $100,000 loan is $1,000. PITI The estimated house payment, including principal, interest, taxes and insurance. PRINCIPAL AND INTEREST The loan payment, consisting of the amount to be applied against the balance of the loan and the interest payment, which is charged for interest on the loan. TITLE INSURANCE FEE A one-time premium that a seller typically pays to the title insurance company on behalf of the buyer for the protection against loss or damage in the even of an incorrect search of public records and/or misinterpretation of title. The title insurance policy also shows what the title on the property is subject to - in terms of liens, taxes, encumbrances, deed restrictions and easements. If borrowers are obtaining a mortgage, they will be required to pay for a mortgage title policy. PRIVATE MORTGAGE INSURANCE (PMI) Insurance for the lender, to cover potential losses, if the borrower defaults on the loan. DOWN PAYMENT The difference between the sale price and the loan amount. LOAN AMOUNT The amount of the mortgage based on the purchase price, minus the down payment. CLOSING COSTS A general term for all the estimated charges associated with the transfer of ownership of the property. PREPAIDS Prepaid Funds for future expenses on the property such as insurance and property taxes. TOTAL CASH REQUIRED The total amount of cash the buyer will need, including down payment, closing costs and prepaids.

BUYING A HOME How Your Agent Works For You Steps in the Buying Process Financing We can Help You Buy Any Home Coordinating the Closing Frequently Asked Questions Terms

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