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Caps
A safeguard
against excessively high payment increases, some ARMs place a cap on the
amount by which either the interest rate or payment may rise at any single
adjustment, over the life of the loan, or both. Look at the cap as "the
worst case scenario" to determine if the ARM suits your financial
capabilities. Typically, 6% ABOVE the rate you first received or a
percentage above a benchmark rate is the standard.
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Clear or Marketable title
A
title that doesn't have any liens or claims against it that would keep it
from being transferred. If not Clear, the buyer may be able sue for
property rights or be held liable for claims. Often, there may be a clause
in the contract that if Clear Title can not be delivered, the seller may
void the contract - with no penalties. Also see Title
Search.
Closing costs
Expenses
above the purchase price that buyers and sellers pay at closing. |
Contract of purchase
A
document that lists the price, conditions and terms under which the buyer is
willing to purchase the property. (Each of these means the same thing: offer
to purchase, or purchase offer, or earnest money agreement, or contract of
purchase, or deposit receipt.)
Contract of sale/sales contract
An offer of purchase that has been signed by both buyer and seller. A
firm contract that outlines all details of the property transaction. (Same
as "offer to purchase/acceptance of sale/sales contract.")
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