Getting Familiar With Few Property Sale Terms

If in case you find yourself relocating or purchasing a property, it is important to be familiar with some legal terms that the process includes. It may take quite a while to get yourself familiar with the terminologies but it will save you time in conducting research and or getting caught off-guard in case a situation arise related to a term. Some of the more common terms are as follows:

Cash Flow: This refers to the total amount of cash that an investor is required to invest or to shell out. This can be used to qualify an amount negatively or positively.

Conditional Offer: Refers to an offer which can only be accepted by the vendor who is initially given a number of conditions which he or she needs to fulfill before he can take advantage of the conditional offer. The drawback however is that it lessens the customer's chances of being able to successfully close a deal. This can also be financially impacting to them before they are even able to close a deal with the vendor.

Default - This refers to situations wherein a homeowner fails three or four months of his financial obligations through mortgage.

Equity - Refers to the value of a house or property that is equivalent to the difference of the amount that is still owned on the mortgage. A perfect example would be a property bought for an amount of $600,000 when it has a current value of $650,000. However, the remaining available balance on the mortgage was around $500,000 the equity of the house would be $150,000. This would be $650,000 subtracted by the loan balance of $500,000.

Fixed Rate Mortgage - Refers to a kind of loan which has a constant interest value for the duration of the mortgage itself. This is also commonly referred to as an FRM. This is usually advisable when you are on a fixed budget since this can help you manage your financial situation more better since you know the amount that you will be paying off later on.

Floating Rate Mortgage - This kind of mortgage has an interest rate which changes depending on market factors or conditions.

Foreclosure - This refers to the situation wherein the bank, or the mortgage institution decides to takes control of the property to be able to sell it fast and lessen the chances of it being a financial liability. This happens when a homeowner defaults in his payments for consecutive three or four months.

These are just few terms that you must get familiar with especially if you wish to understand real estate.