Like any other specialized area, the real estate industry uses its own vocabulary to conduct business. Words like mortgage, amortization, appreciation, escrow, closing, and many others are new to most people, especially those buying their first home. Learning the right terms will help you more easily navigate real estate transactions like buying your new William Ryan Home in Phoenix. 

You’re sure to find it worthwhile to read, understand and remember the language of real estate dealings. A small investment of time now will streamline the process of successfully owning your very own William Ryan Home. As a public service, the U.S. Federal Trade Commission has produced for consumers a comprehensive glossary of terms often used in the home building marketplace. Below is some of the most commonly used jargon you’ll encounter while searching for, building, and purchasing a new home.

Amortization – The repayment of a debt over a set period of time.

APR / Annual percentage rate - The interest rate along with other fees that you can expect to pay when securing a mortgage loan. 

Appreciation - The increase in a property's value over time. 

Assessed Value - When a county, village, city, or town hires an assessor to determine the value of a property for tax purposes.

Broker - A licensed professional qualified to represent a seller or buyer. He or she can choose to work independently of a firm, real estate agents must work with licensed brokers. 

Closing - The final step of a real estate transaction when a property is finally transferred from the seller to the buyer. 

Closing Costs – All costs and fees that come along with the purchase of a property. 

Commission - The percentage4 that a real estate agent makes at closing.

Construction loan – A short-term loan that covers the cost of building a property. 

Conventional mortgage – A choice for borrowers with strong credit, this loan is not backed by a government agency like the Federal Housing Administration (FHA). 

Deed - The legal document that transfers ownership of a property from a seller to a buyer. 

Delinquency - When a homeowner has failed to make a mortgage payment on time. 

Down payment - The money a buyer has saved in order to purchase a property. This can typically range from 5 - 20% of the home's cost. 

Equity - The difference between the amount owed to a lender and the market value of a property. 

Escrow - Money placed "in escrow" is protected by a third party until the real estate transaction is closed. 

FHA mortgage - A Federal Housing Administration mortgage loan is backed by the government and is typically reserved for buyers with a lower credit score or significant amount of debt.

Fixed-rate mortgage – It has the same interest rate for the term of the loan.

Home equity line of credit/ HELOC - A second mortgage that allows a homeowner to borrow money against their home's value.

Home inspection – This evaluates a property's condition, including electrical work, sewage, and plumbing before the closing.

Homeowner's association – A group of homeowners in a community which pays fees to cover the maintenance of common property.

Homeowner's insurance – This provides financial protection to cover costs associated with repairs of a property or even replacement, if necessary.

Lender - A financial institution or person that loans money for the purpose of purchasing real estate. 

Mortgage – A loan that is used to purchase a home or other form of real estate. 

Mortgage insurance – Insurance to protect a lender in the event that a homeowner defaults on a mortgage. 

Pre-approval - A process where a potential lender or bank reviews an individual's finances, including income, assets, and credit history, to determine how much money can be borrowed. 

Principal - The amount of money borrowed from a lender, excluding the interest.

Real estate agent - A licensed professional who helps sellers or buyers complete real estate transactions. 

Title – A legal document stating who has owned a property in the past and notes any liens associated with it.

Transfer tax - A tax that is charged by a state, county, or city when ownership of a property is transferred.

Under contract - When a prospective buyer and seller reach an agreement on a property. At this early stage, both parties are in alignment with the terms of the deal, including the property's price and closing date.

Walk-Through – This allows the buyer to examine the property being purchased at a specified time immediately before the closing, for example, within the 24 hours before closing.

Warranty - Written guarantee of the quality of a product and the promise to repair or replace defective parts free of charge.