Real Estate Glossary In Ghana Vol. 3

real estate terminologies

The ultimate goal of real estate is to provide adequate housing to house-hunters and businesses alike.

Real estate is a crucial component to the well-being of individuals worldwide. In our bid to shed light on some real estate terms, We continue from last week’s post.

Commercial Property

Real estate property that is used for business activities. Some of these come in the form of shopping centers, offices, farms, or industrial property.

Floor Area Ratio

The total square feet of a building divided by the total square feet of the lot the building is located on. This is important in buying or renting property, as it is an easier way to determine your money’s worth or how much of the property you are getting per square feet.

Home Mortgage

A loan given by a bank, mortgage company or any other financial institution for the purchase of a primary or investment residence. In this arrangement, the owner (the borrower) of the property transfers the title to the lender on the condition that the title will be transferred back to the owner once the payment has been made and other terms of the mortgage have been met. In Ghana institutions like Ghana Home Loans offer these services as well as most banks.

Income Property

Property bought or developed to earn income through renting, leasing or price appreciation.  This could be residential income property (sometimes referred to as “non-owner occupied”) or commercial property.

This type of practice is quite common in Ghana lately where investors purchase residential income properties and rent them out monthly for clients who can’t afford to by homes in the short run.

Minimum Down Payment

The minimum cash contribution that must be made by a borrower towards the purchase of a home in order to qualify for a mortgage. This could vary from lender to lender or by loan program.  In Ghana, typically a minimum down payment of 20% of the total loan amount is required to qualify for a loan from Ghana Home Loans.  In some banks however, it is 30% of the total loan amount.

Real Estate

Land plus anything permanently fixed to it, including buildings, sheds and other items attached to the structure.  These could further be categorized into three groups: Residential, Commercial and Industrial.

Real Estate Agent

A person with a state or provincial license to represent a buyer or a seller in a real estate transaction in exchange for commission. Most agents work for a real estate broker or an agent.  These agents are the people you usually deal with face to face when buying or selling property.  They are the people on the front lines of the real estate market and usually work on a 100% commission basis, meaning their income depends on their ability to find property suitable for their clients and closing transactions.

Refinancing

This is described as the proceeds of a new loan used to pay off an existing mortgage on the same property.

 

Credit: 

http://worklife.columbia.edu/real-estate-terminology
http://www.investopedia.com/categories/realestate.asp

 

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