Do You Know What These Crucial Real Estate Acronyms Mean?

A man standing on a flat field and juggling apples.Acronyms are tossed around like crazy in the real estate world, which can be confusing to even the most veteran home buyers. But don’t worry — it doesn’t take long to learn the language.

Here’s a quick list of the most widely used home buying acronyms and what they actually mean. Of course, if you’d like to know even more real estate terminology, don’t hesitate to call us.

MLS: Multiple Listing Service

The multiple listing service is a massive database of available properties that is split up into hundreds of different regions. If you’ve ever heard someone refer to a home as “on the market,” it means that the home is available on the MLS.

Buyers can search for properties that are on the MLS by using a real estate agent’s website (like ours!), but that’s not the only way to find homes. Your agent can send you updates whenever new properties hit the market.

Want to get these email updates? Call us and we’ll set them up for you!

PITI: Principal, Interest, Taxes, and Insurance

A wooden cutout of a house standing next to three stacks of coins, each taller than the next and with a sprout growing out of the top.Principal, interest, taxes, and insurance are the four parts of a mortgage payment. Initially, you will pay more toward the interest on the mortgage, but you will start to pay off more of the principal (the initial loan amount) the longer you stay in your home.

Want to see the estimated PITI for your next loan? Check out our handy mortgage calculator on our website.

FHA: Federal Housing Administration

The Federal Housing Administration, or FHA, is a mortgage insurer that offers a variety of home buying assistance programs to help people purchase homes that they otherwise couldn’t afford.

FHA-insured loans generally offer more flexible credit qualifications and a lower down payment. However, borrowers are required to pay for mortgage insurance.

Interest rates and terms depend on the FHA-approved mortgage lender you choose.

PMI: Private Mortgage Insurance

Speaking of mortgage insurance, many lenders require you to have private mortgage insurance (PMI) if you can’t put 20% down on your home. This insurance protects the lender in case you can’t pay off your mortgage.

HOA: Homeowners Association

A community pool with orange inflatable innertube floating on top.Want to live in a community with a pool or clubhouse? Chances are you’re looking for a neighborhood with an HOA, or homeowners association.

An HOA is responsible for maintaining common areas and any amenities, and it typically sets standards for how homes should look in order to keep property values up. In some cases, homeowners associations may even include Internet, cable, and lawn care with their HOA dues.

If you’re considering buying a home in a neighborhood with an HOA, check the association’s CC&Rs — Covenants, Conditions, and Restrictions — to see what rules the HOA enforces.

We’ll Help You Speak the Language

Understanding real estate terminology is one of the best ways to start your research as a home buyer. Want to know the meanings of other commonly used terms? Give us a call!

About Walter Burns

Walter Burns is a licensed New Jersey Realtor since 2002 and he specializes in luxury living in the hottest New York Metro area communities including the prestigious New Jersey Hudson River waterfront areas of Hoboken, Jersey City, Bayonne, Union City, Weehawken, West New York, Guttenberg, North Bergen, Cliffside Park, Edgewater, and Fort Lee. Walter's mission, desire, and goal is to assist all parties in accomplishing their real estate goals, as well as to empower his clients through exceptional service, creating extraordinary results. Having been mentored by several of the top 100 Realtors and Developers in the United States and Canada, he graduated from Rowan University and currently resides in Hoboken. Walter is part of Weichert Realtors, the largest privately owned real estate firm in the world. NJAR Circle of Excellence Sales Award, 2009, 2010, 2011. Google

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