Utah Real Estate Glossary

The process of paying off a loan through regular scheduled payments that cover both principal and interest. Early payments are mostly interest; later payments shift toward principal.

The true yearly cost of a loan, expressed as a percentage. APR includes the interest rate plus fees (origination, points, mortgage insurance), making it higher than the stated interest rate.

A mortgage with an interest rate that changes periodically based on a market index. Common types: 5/1 ARM (fixed for 5 years, adjusts annually after), 7/1 ARM, 10/1 ARM.

A mortgage not backed by a government agency (unlike FHA, VA, or USDA loans). Requires a minimum 620 credit score and typically 3–20% down payment. Best rates at 740+ credit score.

The percentage of your gross monthly income that goes toward debt payments. Most lenders cap DTI at 43–50%. Formula: monthly debt payments ÷ gross monthly income.

The upfront cash payment made at closing, expressed as a percentage of the purchase price. Common amounts: 3% (conventional), 3.5% (FHA), 0% (VA/USDA), 20% (avoids PMI).

A neutral third-party account that holds funds during a real estate transaction. Also refers to the ongoing account your lender uses to collect and pay property taxes and insurance.

A government-backed mortgage insured by the Federal Housing Administration. Allows down payments as low as 3.5% with a 580+ credit score. Requires mortgage insurance for the life of the loan.

A mortgage with an interest rate that stays the same for the entire loan term (15, 20, or 30 years). Monthly principal and interest payments never change.

Insurance required on FHA loans that protects the lender if you default. Includes an upfront premium (1.75% of loan amount) plus annual premiums (0.55–1.05% depending on loan size and term).

Prepaid interest paid at closing to reduce your mortgage interest rate. One point = 1% of the loan amount. Buying down the rate makes sense if you plan to stay in the home long-term.

A lender's conditional commitment to loan you a specific amount, based on verified income, assets, and credit. Stronger than pre-qualification; required by most Utah sellers before accepting offers.

Insurance required on conventional loans when the down payment is less than 20%. Typically costs 0.5–1.5% of the loan amount annually. Cancels automatically when equity reaches 20%.

A mortgage benefit for eligible veterans, active-duty service members, and surviving spouses. No down payment required, no PMI, and competitive interest rates.

Utah's state housing finance agency that offers down payment assistance programs, first-time homebuyer loans, and mortgage credit certificates for qualifying Utah buyers.

A property sold in its current condition with no repairs or credits from the seller. Buyers can still conduct inspections and negotiate, but the seller won't make improvements.

A real estate agent who exclusively represents the buyer's interests in a transaction. In Utah, buyer representation is typically compensated through the seller's side of the commission.

A condition in a purchase contract that must be satisfied for the sale to proceed. Common contingencies: financing, inspection, appraisal, and sale of buyer's current home.

A good-faith deposit made by the buyer when submitting an offer, typically 1–3% of the purchase price. Held in escrow; applied to closing costs or down payment at closing.

A professional examination of a property's physical condition, covering structure, roof, electrical, plumbing, HVAC, and more. Typically costs $400–$600 in Utah.

When a seller receives more than one offer simultaneously. Sellers may accept the best offer, counter all offers, or request 'highest and best' from all buyers.

A formal written proposal to purchase a property at a specified price and terms. Becomes a binding contract when accepted by the seller.

A property where the seller has accepted a buyer's offer and both parties have signed the purchase agreement. The property is no longer actively marketed but the sale isn't final until closing.

A report prepared by a real estate agent comparing a home to recently sold, pending, and active similar properties to determine a recommended listing price.

The number of days a property has been listed for sale. Low DOM indicates a seller's market; high DOM may signal overpricing or property issues.

A contract between a seller and a real estate agent authorizing the agent to market and sell the property. Specifies commission, listing price, and duration.

A document showing the seller's estimated proceeds after subtracting all costs (commission, closing costs, mortgage payoff, repairs, concessions) from the sale price.

Credits a seller gives to a buyer at closing, often to cover closing costs or buy down the interest rate. Common in slower markets or when a buyer is short on cash.

Preparing and furnishing a home to appeal to the broadest range of buyers. Professional staging typically returns $2–$3 for every $1 invested in Utah.

An independent professional assessment of a property's market value, required by lenders before approving a mortgage. If the appraisal comes in below the purchase price, the buyer and seller must renegotiate or the deal may fall through.

The complete history of ownership of a property, from the original grant to the current owner. Title companies research this to ensure there are no gaps or disputes.

A 5-page document provided 3 business days before closing that details all final loan terms, fees, and costs. Buyers should compare it to the Loan Estimate received at application.

The legal document that transfers ownership of real property from one party to another. In Utah, the most common type is a Warranty Deed.

A legal right for someone other than the property owner to use part of the land for a specific purpose (utility lines, access roads, drainage). Easements transfer with the property.

A legal claim against a property for unpaid debts (mortgage, taxes, contractor work). Liens must be paid off before or at closing. A title search reveals all existing liens.

Insurance that protects against financial loss from defects in a property's title (unknown liens, fraud, errors). Lender's title insurance is required; owner's title insurance is optional but recommended.

A review of public records to verify the seller's right to transfer ownership and identify any claims, liens, or encumbrances on the property.

The most common deed in Utah. The seller guarantees they have clear title and will defend the buyer against any future claims to ownership.

The rate at which available homes sell in a specific market over a given period. Calculated as: homes sold per month ÷ total active listings. Under 3 months = seller's market; over 6 months = buyer's market.

A market condition where supply exceeds demand — more homes for sale than buyers. Prices tend to be lower, homes sit longer, and buyers have more negotiating power.

The difference between a home's current market value and the outstanding mortgage balance. Equity builds through appreciation and mortgage paydown.

The middle price point in a set of home sales — half sold for more, half for less. More reliable than average price because it's less affected by extreme outliers.

How long it would take to sell all current listings at the current sales pace if no new homes were listed. Under 3 months = seller's market; 4–6 months = balanced; over 6 months = buyer's market.

A market condition where demand exceeds supply — more buyers than homes available. Prices rise, homes sell quickly, and sellers have more negotiating power.

A comparison of a metric (home prices, sales volume, days on market) between the same period in two consecutive years. Used to identify trends and remove seasonal variation.

A tax-deferred exchange that allows real estate investors to sell an investment property and reinvest the proceeds into a 'like-kind' property without paying capital gains taxes immediately.

A measure of a rental property's return on investment. Formula: Net Operating Income ÷ Property Value. Higher cap rate = higher return (and usually higher risk).

The net income from a rental property after all expenses (mortgage, taxes, insurance, maintenance, vacancy, management). Positive cash flow means the property earns more than it costs.

The annual pre-tax cash flow divided by the total cash invested (down payment + closing costs + repairs). Measures the return on your actual cash outlay.

A quick valuation metric: Purchase Price ÷ Annual Gross Rent. Lower GRM = better value. Used for initial screening of investment properties.

A property rented for periods shorter than 30 days, typically through platforms like Airbnb or VRBO. STR regulations vary significantly by Utah city and county.

Buy, Rehab, Rent, Refinance, Repeat — an investment strategy where you buy distressed property, renovate it, rent it out, refinance to pull out equity, then repeat.

Gross rental income minus operating expenses (taxes, insurance, maintenance, management, vacancy) — but before mortgage payments. The foundation of commercial real estate valuation.