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Real Estate and Housing Legal Terms

AAppraisal
A determination of the value of something, such as a house. A professional qualified appraiser should make an unbiased estimate by examining the property and looking at the initial purchase price and comparing it with recent sales of similar or neighboring property. Home appraisals are used to determine worth of property for mortgages, home equity loans, estate settlements, bankruptcy and foreclosure proceedings, and insurance damages.
CConstruction Loan
A short-term loan for financing the cost of construction.
MMortgage Loan
Any loan for which funds or property (typically a home) is being used to secure the loan. The mortgage loan to purchase the home is considered the first mortgage and is typically secured with a financial down payment or proceeds from the sale of a former home. Second mortgage loans, like home equity loans, are secured by pledging the home as collateral for the loan.
SSub Prime Loans
Sub prime loans are typically offered to persons with poor credit histories or those with a lack of credit history, and they carry a higher rate of interest than prime loans to compensate the lender for increased credit risk. Sub prime loans for mortgages or refinancing fall more often into foreclosure for reasons that may include higher interest rates, ignorance of a person’s ability to repay the loan, ballooning interest payments, and hidden fees.