Real Estate Terms

Investing in real estate requires some fundamental understanding of words used in the industry. Here are some basic definitions.

Mortgage insurance: Insurance which covers the borrower when there is a default in payments to the lender required by the mortgage and there is a shortfall when the property is sold. The premium is paid by the borrower usually as a once-off payment at the commencement of the loan.

Joint tenants: A legal mode of ownership of property by more than one person. Joint tenants own the whole of the property in equal shares. When one joint tenant dies, that share goes to the remaining joint tenants equally.

Tenancy in common: An alternative mode of ownership where more than one person owns the property but this time in set proportions as the title indicates. So the proportions do not have to be equal. Also, if one owner dies that person can will their share to an outside party if they wish.

Easement: A right to do something—such as walk or drive over the land of another. Generally the owner of the encumbered land cannot build over the site of the easement or block the passage.

Equity: The net capital value of an asset free of all loans and debts. For instance, if you own a property valued at $400,000 and it is subject to a loan of $250,000, your equity in the property is $150,000.

If you have a question about real estate, or would like assistance in locating or selling a property, feel free to phone me, Noel Thompson Principal Professionals Logan Lifestyles at either Browns Plains 3800 4000, Marsden 3200 4495, Springwood 3808 5544 or Waterford 3299 7733.