Homebuying Glossary

A Guide to Home Buying Terms

Home Buying Glossary

To help you as you journey through the homebuying process, we have compiled a list of definitions to common terms you may encounter as you shop for your new home.

1 Month Visit:
This visit occurs 1 month after home closing. During this visit the Customer Service Representative will review suggested care and maintenance of home components, revisit the warranty process and guidelines, and explain the procedure for requesting service.
 
5 Month Visit:
This visit occurs 5 months after home closing. During this visit the Customer Service Representative will review maintenance responsibilities of home components, revisit the warranty process and guidelines, and explain the procedure for requesting service.
 
11 Month Visit:
This visit occurs 11 months after home closing. During this visit the Customer Service Representative will review the performance of various home components and revisit the warranty and maintenance guidelines and timelines.

Adjustable Rate Mortgage (ARM):
A mortgage which begins with a low interest rate, fixed for a specified initial period of the loan term, then "adjusts" at specified intervals during the remainder of the loan term. Adjustments are based on an "index" (the value of which can change over time) plus a "margin." The index plus the margin determine the fully adjusted rate, which is typically subject to certain limits (ceilings and floors). These limits are referred to as "caps."
 
Balloon Mortgage: 
A mortgage which typically offers low, fixed rate payments as though the mortgage was scheduled on a 30-year term. But instead, the loan has a shorter term (for example, 5, 7 or 10 years) which ends with a single large payment (a "balloon payment") for all the remaining principle.
 
Closing:
The conclusion of the purchase transaction, including transfer of the deed, and the disbursement of funds (funding of the loan if financed).
 
Closing Costs:
Money paid by the Buyer or the Seller for various services provided in connection with the closing of a mortgage loan. This generally involves an origination fee, discount points, appraisal, credit report, title insurance, attorney's fees, survey and prepaid items such as taxes and insurance escrow payments.
 
Closing Documents:
The documents which are signed at closing. These include: the Deed, Mortgage documents, Promissory Note, and other documents related to the transaction.
 
Conventional Mortgage:
A mortgage not insured or guaranteed or insured by the federal government.
 
Credit Report:
A report by an independent credit bureau that lists the applicant's credit history and the credit rating as reported by the creditor. In addition, the credit bureau may perform some investigative functions and research of other public records.
 
Customer Walk Thru:
The Customer Walk Thru is a scheduled meeting with the home buyer facilitated by the Field Manager and/or Customer Service Representative. This meeting provides the home buyer an opportunity to view their home prior to Home Delivery. Any corrective items identified by the home buyer are documented and resolved prior to
Home Delivery.

Earnest Money:
A portion of the down payment delivered to the seller or an escrow agency by the purchaser of real estate with a purchase offer securing the buyer obligations.
 
Elevation or Exterior:
This is the term for what the front of your home looks like. Most home plans are available with choices between several different elevations (exteriors), meaning that although they are the same home plan they will look different from the front, (e.g. different roof lines, porch sizes, placement of windows, etc.).
 
Federal Housing Administration (FHA):
The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring over 47.5 million properties since its inception in 1934. FHA does not lend money, nor plan, nor construct housing.
 
FHA Mortgage: 
A mortgage for which the lender is insured against loss by the Federal housing Administration, with the borrower paying the mortgage insurance premium. The major advantage of an FHA mortgage is that the required down payment is very low, however, the maximum loan limit is also low.
 
Fixed Rate Mortgage: 
A mortgage with monthly payments that remain the same throughout the life of the loan because the interest rate is fixed.
 
Home Delivery:
The Home Delivery is a scheduled meeting with the home buyer facilitated by the Field Manager and/or Customer Service Representative. They will conduct a feature, function, benefit demonstration of home components and review manufacturer care and maintenance suggestions. The service process and warranty guidelines are explained as well as the 1-5-11 Month Visits.
 
Home Site:
The home site is the location of your new home; the property the new home will be built on.
 
Included Features:
Included features are home features included in the base price of your new home. Examples include a specific type of appliance, cabinet configuration, door height, flooring, or windows, and vary by home collection.
 
Master Planned Community:
A suburban community plan that may include homes, commercial, educational and community facilities.
 
Mortgage:
A mortgage is a loan, secured by the collateral of specified real property, that the borrower is obliged to pay back with a predetermined set of payments.
 
Mortgage Insurance:
Insurance which protects the lender against loss which could result from a mortgage default.
 
Options:
Each home collection has a list of “options”, such as a, flooring colors or types, paint colors, cabinet colors, etc., that you may select to personalize the home.  Some options, referred to as Upgrades, add cost to the home while others do not.
 
Pre-Drywall Orientation (PDO):
The Pre-Drywall Orientation (PDO) is a scheduled meeting with the home buyer and Field Manager to share quality expectations. The Field Manager will educate the home buyer on the construction process to include a demonstration of behind the wall features combined with function and benefit. Additionally, it’s an opportunity to review options and locations, as well as discuss the remaining construction schedule.
 
Purchase and Sales Agreement:
A written agreement between the buyer and seller of real estate.

Quality Performance Review (QPR):
The Quality Performance Review (QPR) is Shea’s internal process used to ensure our homes are meeting our quality expectations. Throughout the construction cycle, progress is paused to ensure each home is proceeding as we expect. The first QPR is performed before construction even begins and is intended to ensure all information and details are complete before we begin. The final QPR precedes the Customer Walk Thru. We strive for a 100% complete home for our customers.
 
Title:
The evidence of the right to or ownership in property and is also known as the “deed”.
 
Title Company:
The company that researches the title of the property and may issue a policy of title insurance and/or facilitate the Closing.
 
Quick Move-In Home:
When construction begins on a home, but it has not been purchased yet, it is referred to as a quick move-in home as the build time frame on a started home may be shorter than the build time frame a dirt start home.
 
Underwriting:
The process of analyzing the loan application and supporting information to decide whether the loan is acceptable and at what terms.
 
VA Mortgage: 
A mortgage for which the lender is insured against loss by the Veterans Administration. The primary advantage of such a mortgage is that the borrower can put little or no money down. While the maximum loan limit is greater than that of an FHA mortgages, the borrower still needs to pay the mortgage insurance premium. Only Veterans are eligible for this type of mortgage.
 

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