Real Estate Editorial

As promised I have come up with part 2 to my real estate definitions, key words and definitions. Now I realize that a lot of people know what real estate is and generally know the terms and phrases related to Real Estate, but for those of you that would like a little more information or definition. I’ve decided to write a regular post defining real estate key words and terms. Here you go! I want to thank R.Pettinger at Mortgage Blog who provided the first definition on the list this week.

Other posts in the definitions series:
The Definitions of Real Estate - Part 1

Real House Price Growth: “real house price growth = nominal house price increases - rate of inflation.”

Amortization: “The period of time, usually a maximum of 25 years, required to reduce the mortgage debt to $0 when all regular blended payments are made on time and provided the terms (payment and interest rate) remain the same.”

Closing Date: “The date at which the sale of the property becomes final and the new owner takes possession.”

Equity: “The difference between the price for which a home could be sold and the total debts registered against it. Equity usually increases as the mortgage is reduced through regular payments. Market values and improvements to the property may also affect equity.”

Lien: “A claim against a property for money owing. A lien may be filed by a supplier or a subcontractor who has provided labour or material but has not been paid.”

P.I.T.H: “Principal, Interest, Taxes and Heating – costs used to calculate the Gross Debt Service ratio (GDS).”

Gross Debt Service Ratio: “The percentage of the borrower’s gross monthly income that will be used for monthly payments of principle, interest, taxes and heating costs (P.I.T.H) and half of any condominium maintenance.”

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