Real estate definitions have changed quite a bit in the past decade or so. The definition of the word “real” itself has evolved to include many different elements other than the hard and concrete definition most people think of when they hear the word.
In the past, a home was considered to be real estate when it was bought by an individual, a firm, or a company. A “sole proprietorship” was another example of a business entity. To some buyers, the home was a primary residence. The buyer had a mortgage and the property was the security for that loan.
Definition: Affirmative Defenses. An “affirmative defense” is a legal argument that challenges the accuracy or validity of the information submitted by the lender to the lender’s underwriter. For instance, if a person were applying for a mortgage and there were discrepancies in what the buyer said (especially after the closing documents had been signed), the applicant could have an “affirmative defense” that the information was inaccurate and void because it was obtained “illegally” through illegal means. The buyer could seek damages from the lender for breach of contract and laches law. In other words, the buyer could assert that the interest rate charged to him/her on the loan was inaccurate, and that the company’s underwriter did not have a sufficient reason to charge such a high interest rate.
Definition: Closing Date. Closing Date is one of the final steps that go into the mortgage process. In legal terms, it is the date by which the closing documents must be signed to formally accept all the mortgage offer from the buyer. In real estate terms, the closing date is the date by which the buyer must vacate his or her property if he/she decides to exercise his option to purchase the house. The buyer also must sign a title contract on behalf of himself/herself to seal the deal.
Definition: Broker. In a nutshell, a mortgage broker is a person who acts as a mediator between the lender and borrower. He makes the arrangements for the loan and ensures that the lender’s rate of interest is applied to the mortgage amount so that both the lender and the borrower to benefit from the transaction. Mortgage brokers can be independent or connected with a particular mortgage company, in which case they will use the mortgage company’s resources in their performance of their duties. They can also be mortgage brokers who work on their own, independently of any particular lender.
Definition: Repayment. Repayment of the mortgage loan refers to the process by which the borrower pays back the money that the lender has lent him/her. This can take a number of forms. Usually, the mortgage loan repayments are made on a monthly basis, in the form of a credit payment. However, other forms of repayments may be made, depending on the circumstances of the individual repayment. Similarly, the lender may allow a borrower to make early repayment of the loan.
Definition: Percentage of the loan origination fee charged by the lender. In case of mortgage loans, the lender levies a certain percentage of the loan origination fee charged by it. The lender, in return, expects the borrowers to pay the same percentage of the mortgage loan, as well as interest on the loan. This percentage is known as the origination fee charged by the lender.