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Josh Lee
Father, Husband and Licensed Realtor in the Commonwealth of Virginia| Snapchat:joshleerva

What the heck did you say? 21 Phrases you may not understand from the Real Estate & Mortgage industry

Every where you have worked I’m sure you have had some sort of lingo within your job to describe different things. Sometimes when we have been talking with co-workers all day, we get used to the fact they understand the lingo. You go hang out with friends and start talking the same stuff, and they have no idea what you are talking about. Realtors and Mortgage lenders tend to do this a lot. I haven’t even been in the business for too long, and I have used an acronym or lingo not even noticing. My wife has stopped me and asked if I could please clarify. A blog was created that day (haha). I made a list of 21 common acronyms, and other terms that Realtors and Mortgage lenders throw around like you are supposed to know what they mean.

  1. Convey — Transfer ownership from one party to another.
  2. FSBO — For Sale By Owner. Which means the owner has decided to list the property themselves
  3. ARM — You will hear your lender say this acronym. Stands for Adjustable rate mortgage. This means your rate of interest will adjust periodically. Since 2008, people tend to not do this as often anymore.
  4. Fixed-Rate Mortgage — This means your interest rate is at a fixed rate. So your interest rate on your loan will be like that for the entire loan.
  5. Escrow — This is a neutral third party who will hold a deed or monies until certain conditions have been met. You will pay your mortgage, taxes and insurance through your escrow account.
  6. FHA — Federal Housing Administration, it is a United States government agency. They insure loans to lenders who are FHA approved. If a borrower goes delinquent than FHA pays the lender.
  7. VA Loan — Veterans Administration loan for our military
  8. USDA Loan — United States Department of Ariguculutre. These loans can only be used to buy properties in rural areas
  9. PMI — Private Mortgage insurance. This is a risk management tool for lenders. This helps protect their loses if the borrower should default. If you put less than 20% you will have to pay PMI monthly. Which is a certain amount per $100,000 borrowed.
  10. VHDA — Virginia Housing Development Authority. They are offer mortgages to people who may need help with money down. They have great programs for first time home buyers
  11. 203K Loan — This is a renovation loan. This allows you to borrow money for the home and also money for any repairs that may need to be done. All in one loan.
  12. CRM — Comparative Market Analysis. This is what Realtors use to price a property and also gauge if a property is priced correctly. They will compare similar houses in the area to come to that conclusion.
  13. Conventional Loan — Think of this as just a regular loan
  14. Listing agent — This is the agent who is helping the seller
  15. Buyer’s agent — The agent helping the buyer.
  16. Comps — Agents through this around a lot. These are simply the comparable houses in the area that have sold or are listed, etc. They help provide us the date needed to complete a comparative market analysis.
  17. Short Sale — This is when the the proceeds from the sale of the property will fall short of what is owed to the bank. If the bank accepts to take less, than the sale can go through. They have not foreclosed on them, just agreed to take less than what is owed. Banks will do this sometimes to avoid the long process of foreclosing on someone.
  18. REO — Real Estate Owned. This is used to describe a property that is owned by the lender. This property was foreclosed on.
  19. Fannie Mae — The Federal National Mortgage Association. They are government sponsored. They buy mortgages from lenders and package them together to sell them as mortgage backed securities
  20. Freddie Mac — Same as Fannie Mae. They are shareholder-owned company that operates under congressional charter.
  21. EMD — Earnest Money Deposit. This is your “down payment” when you purchase a home. This is what you will send in with the offer on the house you want.

Of course, there are more phrases out there that we tend to throw around with out explaining what they mean first. These are the most common, in my opinion. Never hesitate to stop your Realtor or Mortgage lender, or for that matter anybody, and ask if they could please explain what that means so you will have a better understanding. It is all about the client anyways.