There are many important, terms in real estate contracts. The following terms are neither legal nor complete definitions and are for general guidance purposes only. As a knowledgeable real estate attorney, Alberto Montefalcon may assist any individual who needs help with any real estate transaction. Here is part four of an extensive summary of some common, important terms in real estate contracts.
- Good Faith Estimate
An estimate of the fees required for payment at closing by a mortgage borrower. Federal law requires that lenders provide a Good Faith Estimate within three business days of the initial loan application.
- Grace Period
This refers to the specified time frame whereby payment may be made without a borrower defaulting on a mortgage loan.
A provision providing for another party’s release from liability in the event of a loss.
An examination of a parcel of real property by a qualified inspector to examine and assess its condition and to check for structural damage, termites, and any required repairs or replacement of equipment.
- Interest Rate
The cost of borrowing money from a lender that may vary over a period of time.
- LIBOR Index
This stands for “London Interbank Offered Rate” and is the average yield of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market. LIBOR is a common index used as a benchmark for adjusting mortgage interest rates in adjustable-rate mortgages.
- Liquidated Damages
This term allows a non-breaching party to recover damages in the event that actual damages are difficult to calculate provided this amount is reasonable.
- Lis Pendens
Latin for “thing pending” utilized to mean that a lawsuit is pending.
The term used by brokers to refer to a parcel of real property for sale or rent.
- Listing Broker
This is the individual that represents the interests of the seller or landlord in the sale or rental of property.
- Loan Commitment
The written obligation from a lending institution to provide a mortgage to a borrower is a loan commitment.
- Loan Origination Fee
The loan origination fee is the financing charge required by a lender.
- Loan-to-Value Ratio (LTV)
The loan-to-value ratio is the mortgage amount divided by the lower of the purchase price or the appraised value of the property expressed as a percentage and used by a lender to determine a property’s maximum mortgage loan.
- Lock-In / Rate Lock Agreement
This is an agreement by the lender guaranteeing the applicant a specified interest rate on the mortgage loan if the loan closes within a predetermined period of time.
To learn more about real estate transactions, contact the experienced Sacramento metropolitan area/Northern California attorneys at the Montefalcon Law Offices. Contact us online or schedule a free consultation at any of our three conveniently located offices. Telephone our downtown Sacramento office at (916) 444 0440, our south Sacramento office at (916) 399-9944, or our Concord office at (925) 222-5929.