Common Real Estate Terms & Mortgage Terms Explained - Part 2

Here is the second part in our series of definitions for commonly used real estate terms and mortgage terms (or terminology relating to the real estate/mortgage industry) :

Appraisal
An appraisal is an estimated value of a real estate property by a professional third party such as a Certified Real Estate Appraiser. A written property appraisal my help the buyer borrow the required funds to buy the property. Lenders always want “hard” evidence before they are willing to risk their money in property deals. Almost all non-owner financed mortgages will require an appraisal and is generally paid for by the buyer. Having a full written property appraisal can put everyone’s minds at ease.

Adjustable Rate Mortgage (ARM)
A variable or adjustable rate mortgage is an ARM. It is a mortgage in which the Interest rate is adjustable, meaning that the rate can go up or down according to prevailing financial market conditions. An ARM loan will have typically a 3 or 5 year period during which the rate is lower than the going rate. This is used to entice would-be borrowers or help borrowers have lower payments for the initial period.

Assessment
The value of a property as calculated by the local tax jurisdiction. This assessment is then used to determine the amount of property taxes the property owner is due to pay (in some countries an assessment is refered to as "Rates".

Buyer's Agent
A Buyer's Agent is precisely what the term implies. He or she is a Real Estate Agent who has made an agreement to represent the buyer exclusively, rather than representing the seller.