| ACCELERATION
CLAUSE
A provision in a mortgage that gives the
lender the right to demand immediate payment
of the outstanding loan balance under
certain circumstances. Usually when the
borrower defaults on the loan.
ACTUAL AGE [Top]
The amount of time that has passed since
a building or other structure was built.
ADJUSTMENT DATE [Top]
The date the interest rate changes on
an adjustable rate mortgage.
AD VAL OREM TAX [Top]
Taxes assessed based on the value of the
land and improvements.
ADDENDUM [Top]
A supplement to any document that contains
additional information pertinent to the
subject. Appraisers use an addendum to
further explain items for which there
was inadequate space on the standard appraisal
form.
ADJUSTABLE-RATE MORTGAGE
(ARM) [Top]
A type of mortgage where the interest
rate varies based on a particular index,
normally the prime lending rate.
ADJUSTED SALES PRICE [Top]
An estimate of a property's sales price,
after adjustments have been made to account
for differences between it and another
comparable property.
AGENT [Top]
A person who has been appointed to act
on behalf of another for a particular
transaction.
AMORTIZATION [Top]
The repayment of a loan through regular
periodic payment.
AMORTIZATION SCHEDULE [Top]
The breakdown of individual payments throughout
the life of an amortized loan, showing
both principal contribution and debt service
(interest) fees.
AMORTIZATION TERM [Top]
The length of time over which an amortized
loan is repaid. Mortgages are commonly
amortized over 15 or 30 years.
ANNUAL PERCENTAGE RATE
(APR) [Top]
The rate of annual interest charged on
a loan.
ANNUITY [Top]
A sum of money paid at regular intervals,
often annually.
APPLICATION [Top]
A form used to apply for a mortgage loan
that details a potential borrowers income,
debt, savings and other information used
to determine credit worthiness.
APPRAISAL [Top]
A ''defensible'' and carefully documented
opinion of value. Most commonly derived
using recent sales of comparable properties
by a licensed, professional appraiser.
APPRAISAL PRINCIPLES [Top]
The basic building blocks of the property
valuation process, including property
inspection, market analysis and basic
economics.
APPRAISAL REPORT [Top]
The end result of the appraisal process,
usually consists of one major, standardized
form such as the Uniform Residential Appraisal
Report form 1004, as well as all supporting
documentation and additional detail information.
The purpose of the report is to convey
the estimated value of the subject property
and support that estimate with corroborating
information.
APPRAISED VALUE [Top]
The estimated fair market value of a property
as developed by a licensed, certified
appraiser following accepted appraisal
principals.
APPRAISER [Top]
An educated, certified professional with
extensive knowledge of real estate markets,
values and practices. The appraiser is
often the only independent voice in any
real estate transaction with no vested
interest in the ultimate value or sales
price of the property.
APPRECIATION [Top]
The natural rise in property value due
to market forces.
ASSESSED VALUE [Top]
The value of a property according to jurisdictional
tax assessment.
ASSESSMENT [Top]
The function of assigning a value to a
property for the purpose of levying taxes.
ASSESSMENT RATIO [Top]
The comparative relationship of a property's
assessed value to its market value.
ASSESSOR [Top]
The jurisdictional official who performs
the assessment and assigns the value of
a property.
ASSET [Top]
Any item of value which a person owns.
ASSIGNMENT [Top]
Transfer of ownership of a mortgage usually
when the loan is sold to another company.
ASSUMABLE MORTGAGE [Top]
A mortgage that can be taken over by the
buyer when a home is sold.
ASSUMPTION [Top]
When a buyer takes over, or assumes the
sellers mortgage.
ATTACHED HOUSING [Top]
Any number of houses or other dwellings
which are physically attached to one another,
but are occupied by a number of different
people. The individual houses may or may
not be owned by separate people as well.
BALLOON MORTGAGE
[Top]
A mortgage loan in which
the monthly payments are not large enough
to repay the loan by the end of the term.
So at the end of the term, the remaining
balance comes due in a single large payment.
BALLOON PAYMENT [Top]
The final large payment at the end of
a balloon mortgage term.
BANKRUPTCY [Top]
When a person or business is unable to
pay their debts and seeks protection of
the state against creditors. Bankruptcies
remain on credit records for up to ten
years and can prevent a person from being
able to get a loan.
BILL OF SALE [Top]
A physical receipt indicating the sale
of property.
BROKER [Top]
An individual who facilitates the purchase
of property by bringing together a buyer
and a seller.
BUY DOWN [Top]
Extra money paid in a lump sum to reduce
the interest rate of a fixed rate mortgage
for a period of time. The extra money
may be paid by the borrower, in order
to have a lower payment at the beginning
of the mortgage. Or paid by the seller,
or lender, as incentive to buy the property
or take on the mortgage.
CALL OPTION[Top]
A clause in a mortgage which allows the
lender to demand payment of the outstanding
balance at a specific time.
CAP [Top]
Associated with Adjustable Rate Mortgages.
A limit on how high monthly payments or
how much interest rates may change within
a certain time period or the life of the
mortgage.
CASH-OUT REFINANCE [Top]
Refinancing a mortgage at a higher amount
than the current balance in order to transform
a portion of the equity into cash.
CERTIFICATE OF TITLE [Top]
A document designating the legal owner
of a parcel of real estate. Usually provided
by a title or abstract company.
CLEAR TITLE [Top]
Ownership of property that is not encumbered
by any counter-claim or lien.
CLOSING [Top]
A torturous process designed to induce
cramping in a home buyer's hands by requiring
signature on countless pieces of documentation
that nobody has ever read. Or, the process
whereby the sale of a property is consummated
with the buyer completing all applicable
documentation, including signing the mortgage
obligation and paying all appropriate
costs associated with the sale (CLOSING
COSTS).
CLOSING COSTS [Top]
All appropriate costs generated by the
sale of property which the parties must
pay to complete the transaction. Costs
may include appraisal fees, origination
fees, title insurance, taxes and any points
negotiated in the deal.
CLOSING STATEMENT [Top]
The document detailing the final financial
arrangement between a buyer and seller
and the costs paid by each.
COLLATERAL [Top]
An asset which is placed at risk to secure
the repayment of a loan.
CO-BORROWER [Top]
A second person sharing obligation on
the loan and title on the property.
COLLECTION [Top]
The process a lender takes to pursue a
borrower who is delinquent on his payments
in order to bring the mortgage current
again. Includes documentation that may
be used in foreclosure.
COMMON LAW [Top]
As opposed to statute law. Laws that have
been established by custom, usage and
courts over many years.
COMMISSION [Top]
A percentage of the sales price or a fixed
fee negotiated by an agent to compensate
for the effort expended to sell or purchase
property.
COMMUNITY PROPERTY [Top]
In many jurisdictions, any property which
has been acquired by a married couple.
The ownership of the property is considered
equal unless stipulated otherwise by both
parties.
COMPOUND INTEREST [Top]
Interest paid on the principal amount,
as well as any accumulated interest.
CONCESSIONS [Top]
Additional value granted by a buyer or
seller to entice another party to complete
a deal.
CONDOMINIUM [Top]
A development where individual units are
owned, but common areas and amenities
are shared equally by all owners.
CONDOMINIUM CONVERSION [Top]
Commonly, the conversion of a rental property
such as an apartment complex into a CONDOMINIUM-style
complex where each unit is owned rather
than leased.
CONSTRUCTION LOAN [Top]
A loan made to a builder or home owner
that finances the initial construction
of a property, but is replaced by a traditional
mortgage one the property is completed.
CONTRACT [Top]
A legally binding agreement, oral or written,
between two parties.
CONVENTIONAL MORTGAGE [Top]
A traditional, real estate financing mechanism
that is not backed by any government or
other agency (FHA, VA, etc.).
CONVERTIBLE ARM [Top]
A mortgage that begins as and adjustable,
that allows the borrower to convert the
loan to a fixed rate within a specific
timeframe.
CREDIT [Top]
A loan of money for the purchase of property,
real or personal. Credit is either secured
by an asset, such as a home, or unsecured.
CREDIT HISTORY [Top]
A record of debt payments, past and present.
Used by mortgage lenders in determining
credit worthiness of individuals.
CREDITOR [Top]
A person to whom money is owed.
CREDIT REPORT [Top]
A detailed report of an individuals credit,
employment and residence history prepared
by a credit bureau. Used by lenders to
determine credit worthiness of individuals.
CREDIT REPOSITORY [Top]
Large companies that gather and store
financial and credit information about
individuals who apply for credit.
DEBT [Top]
An obligation to repay some amount owed.
This may or may not be monetary.
DEBT EQUITY RATIO [Top]
The ratio of the amount a mortgagor still
owes on a property to the amount of equity
they have in the home. Equity is calculated
at the fair-market value of the home,
less any outstanding mortgage debt.
DEED [Top]
A document indicating the ownership of
a property.
DEED-IN-LIEU (OF FORECLOSURE) [Top]
A document given by a borrower to a lender,
transferring title of the property. Often
used to avoid credit-damaging foreclosure
procedures.
DEED OF TRUST [Top]
A document which transfers title in a
property to a trustee, who's obligations
and powers are stipulated. Often used
in mortgage transactions.
DEED OF SURRENDER [Top]
A document used to surrender any claim
a person has to a property.
DEFAULT [Top]
The condition in which a borrower has
failed to meet the obligations of a loan
or mortgage.
DELINQUENCY [Top]
The state in which a borrow has failed
to meet payment obligations on time.
DEPOSIT [Top]
Cash given along with an offer to purchase
property, Also called EARNEST MONEY.
DEPRECIATION [Top]
The natural decline in property value
due to market forces or depletion of resources.
DETACHED SINGLE-FAMILY
HOME [Top]
A single building improvement intended
to serve as a home for one family.
DISCOUNT POINTS [Top]
Points paid in addition to the loan origination
fee to get a lower interest rate. One
point is equal to one percent of the loan
amount.
DUPLEX [Top]
A single-building improvement which is
divided and provides two units which serve
as homes to two families.
DWELLING [Top]
A house or other building which serves
as a home.
DOWN PAYMENT [Top]
An amount paid in cash for a property,
with the intent to mortgage the remaining
amount due.
EARNEST MONEY DEPOSIT[Top]
A cash deposit made to a home seller to
secure an offer to buy the property. This
amount is often forfeited if the buyer
decides to withdraw his offer.
ECONOMIC DEPRECIATION [Top]
The decline in property value caused by
external forces, such as neighborhood
blight or adverse development.
ECONOMIC LIFE [Top]
The amount of time which any income-producing
property is able to provide benefits to
its owner.
EFFECTIVE AGE [Top]
The subjective, estimated age of a property
based on its condition, rather than the
actual time since it was built. Excessive
wear and tear can cause a property's effective
age to be greater than its actual age.
EMINENT DOMAIN [Top]
The legal process whereby a government
can take ownership of a piece of property
in order to convert it to public use.
Often, the property owner is paid fair-market
value for the property.
EQUAL CREDIT OPPORTUNITY
ACT (ECOA) [Top]
U.S. federal law requiring that lenders
afford people equal chance of getting
credit without discrimination based on
race, religion, age, sex etc
EQUITY [Top]
The difference between the fair market
value of a property and that amount an
owner owes on any mortgages or loans secured
by the property.
ESCROW [Top]
An amount retained by a third party in
a trust to meet a future obligation. Often
used in the payment of annual taxes or
insurance for real property.
ESCROW ACCOUNT [Top]
An account setup by a mortgage servicing
company to hold funds with which to pay
expenses such as homeowners insurance
and property taxes. An extra amount is
paid with regular principal and interest
payments that goes into the escrow account
each month.
ESCROW ANALYSIS [Top]
An analysis performed by the lender usually
once each year to see that the amount
of money going into the escrow account
each month is correct for the forecasted
expenses.
ESCROW DISBURSEMENTS [Top]
The payout of funds from an escrow account
to pay property expenses such as taxes
and insurance.
EXAMINATION OF TITLE [Top]
The report on the title of a property
from the public records or an abstract
of the title.
FAIR CREDIT REPORTING
ACT [Top]
A federal law regulating the way credit
agencies disclose consumer credit reports
and the remedies available to consumers
for disputing and correcting mistakes
on their credit history.
FAIR MARKET VALUE [Top]
The price at which two unrelated parties,
under no duress, are willing to transact
business.
FANNIE MAE [Top]
A private, shareholder-owned company that
works to make sure mortgage money is available
for people to purchase homes. Created
by Congress in 1938, Fannie Mae is the
nation's largest source of financing for
home mortgages.
FEDERAL HOUSING ADMINISTRATION
(FHA) [Top]
A sub-agency of the U.S. Department of
Housing and Urban Development created
in the 1930's to facilitate the purchase
of homes by low-income, first-time home
buyers. It currently provides federally-subsidized
mortgage insurance for private lenders.
FEE SIMPLE [Top]
A complete, unencumbered ownership right
in a piece of property.
FEE SIMPLE ESTATE [Top]
A form or ownership, or holding title
to real estate. It is the most complete
form of title, having an unconditional
and unlimited interest of perpetual duration.
FHA MORTGAGE [Top]
A mortgage that is insured by the Federal
Housing Administration (FHA).
FIRST MORTGAGE [Top]
The primary loan or mortgage secured by
a piece of property.
FIXED-RATE MORTGAGE (FRM) [Top]
A mortgage which has a fixed rate of interest
over the life of the loan.
FLOOD INSURANCE [Top]
Supplemental insurance which covers a
home owner for any loss due to water damage
from a flood. Often required by lenders
for homes located in FEMA-designated flood
zones.
FORECLOSURE [Top]
The process whereby a lender can claim
the property used by a borrower to secure
a mortgage and sell the property to meet
the obligations of the loan.
GINNIE MAE [Top]
A wholly owned corporation created in
1968 within the U.S. Department of Housing
and Urban Development to serve low-to
moderate-income homebuyers.
GOVERNMENT MORTGAGE [Top]
Any mortgage insured by a government agency,
such as the FHA or VA.
GRANTEE [Top]
Any person who is given ownership of a
piece of property.
GRANTOR
Any person who gives away ownership of
a piece of property.
HAZARD INSURANCE[Top]
Insurance covering damage to a property
caused by hazards such as fire, wind and
accident.
HOME EQUITY LINE OF CREDIT [Top]
A type of mortgage loan that allows the
borrower to draw cash against the equity
in his home.
HOME INSPECTION [Top]
A complete examination of a building to
determine its structural integrity and
uncover any defects in materials or workmanship
which may adversely affect the property
or decrease its value.
HOMEOWNER'S ASSOCIATION [Top]
An organization of home owners in a particular
neighborhood or development formed to
facilitate the maintenance of common areas
and to enforce any building restrictions
or covenants.
HOMEOWNER'S INSURANCE [Top]
A policy which covers a home owner for
any loss of property due to accident,
intrusion or hazard.
HUD MEDIAN INCOME [Top]
Median family income for a particular
county or metropolitan statistical area
(MSA), as estimated by the Department
of Housing and Urban Development (HUD).
HUD-1 STATEMENT [Top]
A standardized, itemized list, published
by the U.S. Department of Housing and
Urban Development (HUD), of all anticipated
CLOSING COSTS connected with a particular
property purchase.
INSPECTION[Top]
The examination of a piece of property,
its buildings or other amenities.
INSURABLE TITLE [Top]
The title to property which has been sufficiently
reviewed by a title insurance company,
such that they are willing to insure it
as free and clear.
INTEREST RATE [Top]
A percentage of a loan or mortgage value
that is paid to the lender as compensation
for loaning funds.
INVESTMENT PROPERTY [Top]
Any piece of property that is expected
to generate a financial return. This may
come as the result of periodic rents or
through appreciation of the property value
over time.
JOINT[Top]
TENANCY
A situation where two or more parties
own a piece of property together. Each
of the owners has an equal share, and
may not dispose of or alter that share
without the consent of the other owners.
JUDGMENT [Top]
An official court decision. If the judgment
requires payment from one party to another,
the court may put a lien against the payees
property as collateral.
JUMBO LOAN [Top]
A mortgage loan for an amount greater
than the limits set by Fannie Mae and
Freddie Mac. Often called non-conforming
loans.
L[Top]ATE
CHARGE
An extra charge, or penalty added to a
regular mortgage payment when the payment
is made late by an amount of time specified
in the original loan document.
LEASE [Top]
A contract between a property owner and
a tenant specifying the payment amount,
terms and conditions, as well as the length
of time the contract will be in force.
LEASEHOLD ESTATE [Top]
A type of property ''ownership'' where
the buyer actually has a long-term lease
on the property.
LEASE OPTION [Top]
A lease agreement that gives the tenant
an option to buy the property. Usually,
a portion of the regular monthly rent
payment will be applied towards the down
payment.
LENDER [Top]
The person or entity who loans funds to
a buyer. In return, the lender will receive
periodic payments, including principal
and interest amounts.
LIABILITIES [Top]
A persons outstanding debt obligations.
LIABILITY INSURANCE [Top]
Insurance that covers against potential
lawsuit brought against a property owner
for alleged negligence resulting in damage
to another party.
LIEN [Top]
Any claim against a piece of property
resulting from a debt or other obligation.
LIFE CAP [Top]
A limit on how far the interest rate can
move for an Adjustable Rate Mortgage.
LINE OF CREDIT [Top]
An extension of credit for a certain amount
for a specific amount of time. To be used
by the borrower at his discretion.
LIQUID ASSET [Top]
Any asset which can be quickly converted
into cash at little or no cost, or cash
itself.
LOAN [Top]
Money borrowed, to be repaid with interest,
according to the specific terms and conditions
of the loan.
LOAN OFFICER [Top]
A person that sells loans, representing
the lender to the borrower, and the borrower
to the lender.
LOAN ORIGINATION [Top]
How a lender refers to the process of
writing new loans.
LOAN SERVICING [Top]
The processing of payments, mailing of
monthly statements, management and disbursement
of escrow funds etc Typically carried
out by the company you make payments to.
LOAN-TO-VALUE RATIO (LTV) [Top]
The comparison of the amount owed on a
mortgaged property to its fair market
value.
LOCK-IN [Top]
An agreement between a lender and a borrower,
guaranteeing an interest rate for a loan
if the loan is closed within a certain
amount of time.
LOCK-IN PERIOD [Top]
The amount of time the lender has guaranteed
an interest rate to a borrower.
MANUFACTURED[Top]
HOUSING
Once known as ''mobile homes,'' manufactured
housing is any building which has been
constructed off site, then moved onto
a piece of real property.
MARGIN [Top]
The difference between the interest rate
and the index on an adjustable rate mortgage.
MATURITY [Top]
The date on which the principal balance
of a financial instrument becomes due
and payable.
MERGED CREDIT REPORT [Top]
A credit report derived from data obtained
from multiple credit agencies.
METROPOLITAN AREA [Top]
The accumulated land in and around a city
or other municipality which falls under
the political and economic influence of
that entity.
MORTGAGE [Top]
A financial arrangement wherein an individual
borrows money to purchase real property
and secures the loan with the property
as collateral.
MORTGAGE BANKER [Top]
A financial institution that provides
primary and secondary mortgages to home
buyers.
MORTGAGE BROKER [Top]
A person or organization that serves as
a middleman to facilitate the mortgage
process. Brokers often represent multiple
mortgage bankers and offer the most appropriate
deal to each buyer.
MORTGAGEE [Top]
The entity that lends money in a real
estate transaction.
MORTGAGE INSURANCE [Top]
A policy that fulfills that obligations
of a mortgage when the policy holder defaults
or is no longer able to make payments.
MORTGAGE INSURANCE PREMIUM
(MIP) [Top]
An fee that is often included in mortgage
payments that pays for mortgage insurance
coverage.
MORTGAGE LIFE INSURANCE [Top]
A policy that fulfills the obligations
of a mortgage when the policy holder dies.
MORTGAGOR [Top]
The entity that borrows money in a real
estate transaction.
MULTI-FAMILY PROPERTIES [Top]
Any collection of buildings that are designed
and built to support the habitation of
more than four families.
NEGATIVE
AMORTIZATION [Top]
When the balance of a loan increases instead
of decreases. Usually due to a borrower
making a minimum payment on an Adjustable
Rate Mortgage during a period when the
rate fluctuates to a high enough point
that the minimum payment does not cover
all of the interest.
NEIGHBORHOOD [Top]
A subsection of a municipality that has
been designated by a developer, economic
forces or physical formations.
NO-COST LOAN [Top]
Many lenders offer loans that you can
obtain at "no cost." You should
inquire whether this means there are no
"lender" costs associated with
the loan, or if it also covers the other
costs you would normally have in a purchase
or refinance transactions, such as title
insurance, escrow fees, settlement fees,
appraisal, recording fees, notary fees,
and others. These are fees and costs which
may be associated with buying a home or
obtaining a loan, but not charged directly
by the lender. Keep in mind that, like
a "no-point" loan, the interest
rate will be higher than if you obtain
a loan that has costs associated with
it.
NO-POINT LOAN [Top]
A loan with no points. The interest rate
on such a loan will be higher than a loan
with points paid. Also sometimes refers
to a refinance loan where closing costs
are included in the loan.
NONLIQUID ASSET [Top]
Any asset which can not be quickly converted
into cash at little or no cost.
NOTE [Top]
A legal document that obligates a borrower
to repay a mortgage loan at a stated interest
rate during a specified period of time.
NOTE RATE [Top]
The interest rate stated on a mortgage
note.
NOTICE OF DEFAULT [Top]
Formal written notice from a lender to
a borrower that default has occurred.
ORIGINAL
EQUITY [Top]
The amount of cash a home buyer initially
invests in the home.
ORIGINAL PRINCIPAL BALANCE [Top]
The total amount of principal owed on
a mortgage loan at the time of closing.
ORIGINATION FEE [Top]
Refers to the total number of points paid
by a borrower at closing.
OWNER FINANCING [Top]
A transaction where the property owner
provides all or part of the financing.
OWNER OCCUPIED [Top]
The state of property wherein the owner
occupies at least some portion of the
property.
PARTIAL
INTEREST [Top]
A shared ownership in a piece of property.
May be divided among two or more parties.
PARTIAL PAYMENT [Top]
A payment of less than the regular monthly
amount. Usually, a lender will not accept
partial payments.
PERIODIC PAYMENT CAP [Top]
The limit on how much regular monthly
payments on an Adjustable Rate Mortgage
can change during one adjustment period.
PERIODIC RATE CAP [Top]
The limit on how much the interest rate
on an Adjustable Rate Mortgage can change
during any one adjustment period.
PERSONAL RESIDENCE [Top]
The primary domicile of a person or family.
PLANNED UNIT DEVELOPMENT
(PUD) [Top]
A coordinated, real estate development
where common areas are shared and maintained
by an owner's association or other entity.
POINT [Top]
A percentage of a mortgage amount (one
point = 1 percent).
PRE-APPROVAL [Top]
The process of applying for a mortgage
loan and becoming approved for a certain
amount at a certain interest rate before
a property has been chosen. Pre-approval
allows the borrower greater freedom in
negotiations with sellers.
PREPAYMENT [Top]
Payment made that reduces the principal
balance of a loan before the due date
and before the loan has become fully amortized.
PREPAYMENT PENALTY [Top]
A fee that may be charged to a borrower
who pays off a loan before it is due.
PRE-QUALIFICATION [Top]
Less formal that pre-approval, pre-qualification
usually means a written statement from
a loan officer indicating his or her opinion
that the borrower will be able to become
approved for a mortgage loan.
PRIME RATE [Top]
The interest rate that banks and other
lending institutions charge other banks
or preferred customers.
PRINCIPAL [Top]
The amount owed on a mortgage which does
not include interest or other fees.
PRINCIPAL BALANCE [Top]
The outstanding balance of principal on
a mortgage. Does not included interest
due.
PRINCIPAL, INTEREST,
TAXES, AND INSURANCE (PITI) [Top]
The most common constituents of a monthly
mortgage payment.
PRIVATE MORTGAGE INSURANCE
(PMI) [Top]
A form of mortgage insurance provided
by private, non-government entities. Normally
required when the LOAN TO VALUE RATIO
is less that 20%.
PROPERTY [Top]
Any item which is owned or possessed.
PURCHASE AGREEMENT [Top]
A written contract signed by the buyer
and seller stating the terms and conditions
under which a property will be sold.
QUADRAPLEX [Top]
Any building designed to accommodate four
families.
QUALIFYING RATIOS [Top]
Two ratios used in determining credit
worthiness for a mortgage loan. One is
the ratio of a borrowers monthly housing
costs to monthly income. The other is
a ratio of all monthly debt to monthly
income.
QUITCLAIM DEED [Top]
A legal document which transfers any ownership
an individual has in a piece of property.
Often used when the amount of ownership
is not known or is unclear.
RATE LOCK [Top]
A guarantee from a lender of a specific
interest rate for a period of time.
REAL ESTATE [Top]
A piece of land and any improvements or
fixtures located on that land.
REAL ESTATE AGENT [Top]
A licensed professional who facilitates
the buying and selling of real estate.
REAL ESTATE SETTLEMENT
PROCEDURES ACT (RESPA) [Top]
A federal law requiring lenders to give
full disclosure of closing costs to borrowers.
REAL PROPERTY [Top]
Land, improvements and appurtenances,
and the interest and benefits thereof.
REALTOR [Top]
A real estate agent or broker who is a
member of the National Association of
Realtors.
RECORDER [Top]
A local government employee whose role
it is to keep records of all real estate
transactions within the jurisdiction.
RECORDING [Top]
The filing of a real estate transaction
with the appropriate government agent
(normally the RECORDER). A real estate
transaction is considered final when it
is recorded.
REFINANCE TRANSACTION [Top]
A new loan to pay off an existing loan.
Typically to gain a lower interest rate
or convert equity into cash.
REMAINING BALANCE [Top]
The amount of principal, interest and
other costs that has not yet been repaid.
REMAINING TERM [Top]
The amount of time remaining on the original
amortization schedule.
REPAYMENT PLAN [Top]
A plan to repay delinquent payments, agreed
upon between a lender and borrower, in
an effort to avoid foreclosure.
REPLACEMENT RESERVE FUND [Top]
An account, or fund, setup for the replacement
of short life items , such as carpeting,
in the common areas of a cooperative property.
RESIDENTIAL PROPERTY [Top]
A piece of property whose highest and
best use is the maintenance of a residence.
REVOLVING DEBT [Top]
A type of credit that allows the borrower/customer
to make charges against a predetermined
line of credit. The customer then pays
monthly installments on the amount borrowed,
plus interest.
RIGHT OF FIRST REFUSAL [Top]
An agreement giving a person the first
opportunity to buy or lease a property
before the owner offers it for sale to
others.
RURAL [Top]
An area outside of an established urban
area or metropolitan district.
SALE PRICE [Top]
The actual price a property sells for,
exclusive of any special financing concessions.
SECOND [Top]
MORTGAGE
A loan secured by the equity in a home,
when a primary mortgage already exists.
SECONDARY MORTGAGE MARKET [Top]
An economic marketplace where mortgage
bankers buy and sell existing mortgages.
SECURED LOAN [Top]
A loan that is backed by collateral. In
the case of a mortgage loan, the collateral
is the house.
SECURITY [Top]
The property used as collateral for a
loan.
SEMIDETACHED HOUSING [Top]
Two residences which share a common wall.
SERVICER [Top]
A financial institution which collects
mortgage payments from borrowers and applies
the appropriate portions to principal,
interest and any escrow accounts.
SERVICING [Top]
The processing of payments, mailing of
monthly statements, management and disbursement
of escrow funds etc Typically carried
out by the company you make payments to.
SINGLE-FAMILY PROPERTY [Top]
A property designed and built to support
the habitation of one family.
SUBJECT PROPERTY [Top]
A term which indicates a property which
is being appraised.
SURVEY [Top]
A specific map of a piece of property
which includes the legal boundaries and
any improvements or features of the land.
Surveys also depict any rights-of-way,
encroachments or easements.
TAX-EXEMPT
PROPERTY [Top]
Any property which is not taxed.
TENANCY [Top]
The right to occupy a building or unit.
TENANCY IN COMMON [Top]
A form of holding title, whereby there
are two or more people on title to a property,
ownership does not pass on to the others
upon the death of one individual.
THIRD PARTY ORIGINATION [Top]
When a lender uses a third party to originate
and package loans for sale to the secondary
market (Fannie Mae, Freddie Mac).
TITLE [Top]
A specific document which serves as proof
of ownership.
TITLE COMPANY [Top]
An organization which researches and certifies
ownership of real estate before it is
bought or sold. Title companies also act
at the facilitator ensures all parties
are paid during the real estate transaction.
TITLE INSURANCE [Top]
A policy which insures a property owner
should a prior claim arise against the
property after the purchase has been completed.
This also covers a lender should a question
of ownership arise.
TITLE SEARCH [Top]
The process whereby the TITLE COMPANY
researches a properties title history
and ensures that no outstanding claims
exist.
TRANSFER OF OWNERSHIP [Top]
Any means by which the ownership of a
property changes hands.
TRANSFER OF TAX [Top]
Taxes payable when title passes from one
owner to another.
TRUSTEE [Top]
A fiduciary who holds or controls property
for the benefit of another.
TRUTH IN LENDING [Top]
A federal law requiring full disclosure
by lenders to borrowers of all terms,
conditions and costs of a mortgage.
USEFUL
LIFE [Top]
The span of time over which a property
can be used or can provide benefits to
its owner..
VA MORTGAGE [Top]
A mortgage that is guaranteed by the Department
of Veterans Affairs (VA).
VESTED [Top]
Having the right to use a portion of a
fund such as an IRA. Typically vesting
occurs over time. If you are 100% vested,
you have a right to 100% of the fund.
WALK-THROUGH
INSPECTION [Top]
A process whereby an appraiser examines
a property in preparation for estimating
its value. Also, the process of inspecting
a property for any damage prior to that
property being bought or sold.
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