carmel valley, house for sale, home buying

Home Buying Terms


A formal declaration

made before an authorized official (usually a notary public) by the person who has executed (signed) a document that his/her own act and deed. In most instances, documents must be acknowledged (notarized) before they can be accepted for recording.

Adjustable Rate Mortgage (ARM)

A mortgage with an interest rate that changes over time in line with movements in the index. ARMs are also referred to as AMLs (adjustable mortgage loans) or VRMs (variable rate mortgages). Adjustment Period: The length of time between interest rate changes on an ARM. For example, a loan with adjustment period of one year is called a one-year ARM, which means that the interest rate can change once a year. Affidavit A sworn statement in writing, made before an authorized official. A.L.T.A. Abbreviation for the American Land Title Association.


Repayment of a loan in equal installments of principal and interest, rather than interest-only payments. Annual Percentage Rate (APR) The total finance charges (interest, loan fees, points) expressed as a percentage of the loan amount. Assessments Specific and special taxes (in addition to normal taxes) imposed on real property to pay for public improvements within a specific geographic area.

Assumption of Mortgage

A Buyer’s agreement to assume the liability under an existing note that is secured by a mortgage or deed of trust. The lender must approve the buyer in order to release the original borrower (usually the seller) from liability. Attorney -In-Fact An agent authorized to act for another under a Power of Attorney. Balloon Payment A lump sum principal payment due at the end of some mortgages or other long-term loans.


As used in a trust deed, the Lender is designated as the Beneficiary, i.e. obtains the benefit of the security. Cap The limit on how much the interest rate can be adjusted over the life of the mortgage. CC&Rs Covenants, Conditions and Restrictions. A document that controls the use, requirements and restrictions of a property. Certificate of Reasonable Value (CRV) A document that establishes the maximum value and loan amount for a VA guaranteed mortgage.

Conventional Loan

A mortgage loan which is not insured or guaranteed by a governmental agency.

Closing Statement

The financial disclosure statement that accounts for all of the funds received and disbursed at the closing, including deposits for taxes, hazard insurance, and mortgage insurance.


A form of real estate ownership. The owner receives title to a particular unit and has a proportionate interest in certain common areas. The unit itself is generally a separately owned space whose interior surfaces (walls, floors, and ceilings) serve as its boundaries. Contingency A condition that must be satisfied before a contract can be completed.  For instance, a sales agreement may be contingent upon the buyer obtaining financing. Conversion to Clause A provision in some ARMs that enables your to change an ARM to a fixed-rate loan, usually after the first adjustment period. The new fixed rate is generally set at the prevailing interest rate for fixed-rate mortgages. This conversion feature may cost extra.

CRB Certified Residential Broker.

To be certified, a broker must be a member of the National Association of Realtors, have five years’ experience as a licensed broker and have completed five required Residential Division courses.


Written instrument by which the ownership of land is transferred from one person to another.

Deed of Trust

Written instrument by which title to land is transferred to a trustee as security for a debt or other obligation. Also called Trust Deed. Used in place of mortgages in many states. Deposit Receipt Used when accepting

“Earnest Money” to bind an offer for property by a prospective purchaser; also includes terms of a contract.