Real estate vocab

What is the term for a comprehensive assessment of the main features of a property such as electrical wiring, foundations, and plumbing?

• Full Structural Survey

• Main appraisal

• Mortgage Deed

• Appraisal Registry

What is the process of combining both interest and principal in payments, rather than simply paying off interest at the start?

• Assessed value

• Appraisal

• Amortization

• Agent

Answer explanation

Amortization is the process of combining both interest and principal in payments, allowing the homeowner to build more equity in the home early on.

What makes an adjustable-rate mortgage different from a regular mortgage ?

• The interest rate stays the same throughout the life of the loan.

• The interest rate can change over the course of the loan at five, seven, or ten year intervals.

• The buyer makes the down payment and pays closing costs.

• The buyer pays rent on the remaining share of the property.

Answer explanation

An adjustable-rate mortgage has an interest rate that can change over the course of the loan at specific intervals, making it a riskier loan for homeowners who plan to stay in their home for an extended period.

What is the purpose of a home inspection?

• To obtain title insurance

• To determine the listing price of the home

• To obtain a letter from a bank

• To check that the plumbing, foundation, and appliances are up to code

Answer explanation

The purpose of a home inspection is to check that the plumbing, foundation, appliances, and other features are up to code. Issues that may turn up during an inspection may factor into the negotiation on a final price. Failing to do an inspection may result in surprise costly repairs down the road for the home buyer.

What is the purpose of title insurance in a home purchase?

• To protect the lender from default on a mortgage

• To cover research into public records to ensure that the title is free and clear

• To obtain a letter from a bank for the buyer

• To determine the listing price of the home

Answer explanation

Title insurance is often required as part of the closing costs. It covers research into public records to ensure that the title is free and clear, and ready for sale. If you purchase a home and find out later that there are liens on the home, be glad you had title insurance.

What is the meaning of the term 'Development' in real estate?

• The process of constructing new buildings.

• A group of buildings together on a large area of land.

• The act of renovating existing properties.

• The legal process of acquiring land for construction.

Answer explanation

The term 'Development' in real estate refers to a group of buildings together on a large area of land. It describes the collective construction and arrangement of buildings within a specific area.

What does the term 'APR' stand for in real estate?

• Annual Property Return

• Asset Price Ratio

• Average Property Revenue

• Annual Percentage Rate

Answer explanation

In real estate, 'APR' stands for 'Annual Percentage Rate,' which refers to the interest on a loan. It is a crucial factor in determining the overall cost of borrowing for a property purchase.

What does the term 'Chain Free' indicate in the context of real estate?

• A property that is exempt from mortgage collateral requirements.

• A property that is free from any legal encumbrances.

• A property that is not part of a chain of linked sales and purchases.

• A property that is not subject to annual property tax.

Answer explanation

In real estate, 'Chain Free' indicates a property that is not part of a chain of linked sales and purchases. This means that the sale of the property is not dependent on the seller finding another property to buy, making it an attractive option for buyers and sellers alike.

What is the term for a charge that the bank or building society imposes if the buyer of a home with a mortgage pays off the mortgage earlier than agreed?

• Equity

• Early Repayment Charge (ERC)

• Conveyancing

• Gazumping

Answer explanation

The correct answer is Early Repayment Charge (ERC). This charge is imposed by the bank or building society if the buyer pays off the mortgage earlier than agreed, and it is also known as an early repayment penalty (ERP).

Correct!

What is the term for the legal process of transferring property ownership from one person to another?

• Conveyancing

• Equity

• Gazumping

• Early Repayment Charge (ERC)