The Essential Real Estate Glossary

The Peter Morkel Real Estate Group January 3, 2024


 
Escrow: Escrow is a process that ensures the transaction’s funds are distributed and the transfer of the deed is completed. It is overseen by an escrow company, which is a neutral third party.
 
Escrow Impounds: Escrow impounds include prepaid taxes and insurance. The impounded funds provide insurance to the lender that taxes and insurance payments will be made. The lender can request no more than two months of payments.
 
Final Walk-Through: The buyer’s opportunity to tour the home one last time to ensure that all required repairs were completed and that no damage occurred when the sellers moved out of the home.
 
Good Faith Estimate: See Loan Estimate, below.
 
HUD-1: Also known as the “settlement statement,” the HUD-1 is an itemized listing of closing costs and final loan terms. In October 2015, this form was replaced by the Closing Disclosure, but you may still hear it referred to as the HUD-1. 
 
Loan Estimate: A form that allows consumers to compare the original loan estimate against the closing statement. You may still hear this form referred to as the Good Faith Estimate, or GFE.
 
Multiple Listing Service (MLS): A of available homes for sale. Available only to member brokers.
 
MIP: The Mortgage Insurance Premium charged for FHA-backed loans. See PMI.
 
PMI: Private Mortgage Insurance is a policy typically required by the lender for borrowers with less than 20 percent of the purchase price as a down payment. It protects the lender if the borrower defaults.
 
Seller Agency: The real estate broker represents only the seller in a transaction.
 
Settlement: The closing process is often referred to as “settlement.”
 
Title Insurance: Insurance policies that protect the lender and the homeowner (two separate policies) against claims against the property that weren’t found during the title search.

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