Skip to Content
Kindred Homes

33 Must-Know Real Estate Vocabulary Terms

Navigating the world of real estate and home financing can feel overwhelming, especially with all the jargon that gets thrown around. Whether you’re buying your first home, looking to refinance, or just curious about the process, understanding the key terms is essential. This guide will break down the most common real estate and mortgage terms, from adjustable-rate mortgages to closing costs, and from escrow accounts to property taxes. With these definitions, you’ll be ready to tackle your home buying journey with confidence and clarity.

Adjustable-Rate Mortgage (ARM)

An Adjustable-Rate Mortgage (ARM) is a type of home loan with an interest rate that can change periodically, based on an index that reflects the cost to the lender of borrowing on the credit markets. Initially, the rate is fixed for a period of time, then it adjusts at predetermined intervals.

Image showing the complexities of loan amortization


Amortization refers to the process of gradually paying off a debt over a period of time through regular payments. In real estate, it often refers to the repayment of a mortgage loan through monthly payments of principal and interest.

Annual Percentage Rate (APR)

The Annual Percentage Rate (APR) is the annual cost of a loan to a borrower, including fees, expressed as a percentage. It provides a more complete picture of what a loan will cost, as it includes both the interest rate and any additional fees or costs.


Appraised Value

The appraised value is an estimate of a property’s fair market value as determined by a qualified appraiser, based on factors such as the property's condition, location, and comparable sales in the area. If you're hoping to get a better understanding of this concept, read this blog post for more information.



An appraiser is a professional who assesses the value of a property, often for the purpose of determining a fair market value for sale, mortgage, or taxation purposes.

Image showing an assessor viewing a rendering of a Kindred Home


An assessor is a public official who evaluates property for the purpose of taxation. The assessor determines the value of a property, which is then used to calculate property taxes. Read our article on tax appraisals for new construction homes to learn more about this topic.

Closing Costs

Closing costs are the expenses, over and above the price of the property, that buyers and sellers normally incur to complete a real estate transaction. These can include loan origination fees, title fees, appraisal fees, and more.


Credit Score

A credit score is a numerical expression based on a level analysis of a person's credit files, representing the creditworthiness of an individual. Lenders use credit scores to evaluate the probability that an individual will repay loans.


Down Payment

A down payment is an upfront payment made by the buyer towards the purchase price of a home. It typically represents a percentage of the total purchase price, with the remainder financed through a mortgage.


Earnest Money

Earnest money is a deposit made to a seller showing the buyer's good faith in a transaction. This money is typically held in escrow and applied toward the down payment or closing costs. If you're interested in learning more about earnest money, read our recent article here.



Escrow is a financial arrangement where a third party holds and regulates the payment of funds required for two parties involved in a transaction. It helps ensure that the transaction proceeds smoothly and that both parties meet their contractual obligations.


FHA Loan

An FHA loan is a mortgage insured by the Federal Housing Administration, designed to help low- to moderate-income families attain homeownership. FHA loans typically have lower down payment requirements and more flexible credit criteria.


Home Equity

Home equity is the portion of a property's value that the owner actually owns, calculated as the difference between the home's market value and the outstanding balance of any mortgages or liens against the property.

Image illustrating the process of thoroughly inspecting a home

Home Inspection

A home inspection is a professional examination of a property's condition, typically conducted before the sale is completed. Inspectors look at structural, electrical, plumbing, and other systems within the home to identify potential issues. If you want more information, we published a quick read on the ins and outs of home inspections, which you can find here.

Home Loan

A home loan, or mortgage, is a loan given by a bank, mortgage company, or other financial institution for the purchase of a residence. The property itself serves as collateral for the loan.


Homeowners Association (HOA)

A Homeowners Association (HOA) is an organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties and residents. HOAs often collect fees to maintain common areas and amenities.


Homeowners Insurance

Homeowners insurance is a form of property insurance that covers losses and damages to an individual's house and assets in the home. It also provides liability coverage against accidents in the home or on the property.


HUD (U.S. Department of Housing and Urban Development)

HUD is a government agency that oversees federal programs designed to help Americans with housing needs, including affordable housing, fair housing laws, and housing assistance programs.


Interest Rate

The interest rate is the amount a lender charges a borrower for the use of assets, expressed as a percentage of the principal. For mortgages, it is the cost of borrowing the loan amount.



A lender is an individual, a public or private group, or a financial institution that makes funds available to another with the expectation that the funds will be repaid, typically with interest. If you're in the market for a new construction home, Kindred Homes highly recommends working with our lending partner, Kindred HomeLoans.


Loan Amount

The loan amount is the total sum of money that a borrower agrees to repay, according to the terms of the loan agreement. In a mortgage, this is the amount financed to purchase a home.


Loan Term

The loan term is the length of time over which a loan is scheduled to be repaid. Common mortgage loan terms include 15, 20, and 30 years.


Mortgage Broker

A mortgage broker is a professional who helps borrowers find the best mortgage loan product for their needs by comparing loan options from multiple lenders.


Mortgage Lender

A mortgage lender is a bank, credit union, or financial institution that provides loans to borrowers for the purchase of real estate.

Image showing a rough sales contract for a mortgage

Mortgage Loan

A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage securing the loan.

Mortgage Payments

Mortgage payments are the monthly payments made by a borrower to repay a mortgage loan. They typically include principal, interest, property taxes, and homeowners insurance.


Multiple Listing Service (MLS)

The Multiple Listing Service (MLS) is a database established by cooperating real estate brokers to provide data about properties for sale. MLS listings include detailed information and photos of available properties.


Origination Fee

An origination fee is a charge by a lender for processing a new loan application. It's typically a percentage of the loan amount and is usually paid at closing.


Property Taxes

Property taxes are taxes assessed on real estate by the local government, based on the assessed value of the property. These taxes fund public services such as schools, police, and infrastructure.


Purchase Price

The purchase price is the total amount agreed upon by the buyer and seller for the sale of a property. It does not include closing costs, taxes, or other fees.


Real Estate Agent

A real estate agent is a licensed professional who represents buyers or sellers in real estate transactions. Agents provide market insights, negotiate on behalf of their clients, and help facilitate the buying or selling process. If you're an established real estate agent or aspiring to take your career to the next level, take a look at our realtor program and find out how we can work together.


Real Estate Broker

A real estate broker is a professional who has obtained a higher level of licensing than a real estate agent and can operate their own real estate business. Brokers can employ real estate agents and offer additional services.


Sale Price

The sale price is the final price at which a property is sold, agreed upon by both the buyer and the seller. It may be different from the initial listing price.


Understanding the terms used in real estate and mortgages is crucial for anyone diving into the housing market. With this knowledge, you'll feel more confident and capable of making smart decisions that fit your financial goals and personal needs. Whether you're negotiating a mortgage, checking the appraised value of a property, or figuring out closing costs, knowing these terms will help you navigate the real estate landscape with ease. Remember, being well-informed is the key to turning your homeownership dreams into reality.

Images are artist renderings and will differ from the actual home built. Prices, plans, specifications, square footage, availability are subject to change without notice or prior obligations. Options shown in the renderings and floor plans may be available for an additional expense. Square footage is approximate and may vary by elevation, municipality and/or options selected. Plans are subject to availability and feasibility. Please see a sales representative for more information.

© Horton Capital Properties, LLC. All Rights Reserved. No portion of this material may be reproduced in any form or by any means, including screen recording or screen snapshots, without the express written permission of Horton Capital Properties, LLC. Horton Capital Properties, LLC will vigorously prosecute any unauthorized use of this material. Horton Capital Properties, LLC is an equal opportunity home builder. We do business in accordance with the Federal Fair Housing Law.

Home Builder Website Design by Blue Tangerine