Abandonment
The relinquishment of all rights and title to a property with no intention of reclaiming ownership.
Abstract of Title
A condensed history of the title to parcel of land consisting of a summary of every recorded instrument, together with a statement of all liens, charges or encumbrances affecting title to the land.
Acceleration Clause
A provision in a mortgage that gives the lender the right to demand payment of the entire outstanding balance if a monthly payment is missed.
Adjustable Rate Mortgage (ARM)
A mortgage whose interest rate changes over time based on an index and a margin. Rate changes are made at prescribed times and within prescribed limits (caps) as defined in the mortgage contract.
Adjustment Interval
A provision in a mortgage that gives the lender the right to demand payment of the entire outstanding balance if a monthly payment is missed.
Adjustable Rate Mortgage (ARM)
A mortgage whose interest rate changes over time based on an index and a margin. Rate changes are made at prescribed times and within prescribed limits (caps) as defined in the mortgage contract.
Adjustment Interval
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index.
Administrator
A person appointed by the court to administer the estate of a deceased person who died intestate, or left no will.
Administrator's Deed
A deed given by an Administrator.
Agency
The legal relationship resulting from an agreement that the agent is authorized by a principal to perform certain acts on behalf of the principal in dealing with a third party. The agent has a fiduciary duty to the principal.
Agreement of Sale
A written agreement in which the buyer agrees to buy certain realty and the seller agrees to sell upon terms and conditions set forth therein. Title remains with the seller until the terms and conditions are fulfilled; buyer has equitable title
Amortization
The gradual repayment of a mortgage by installments.
The gradual repayment of a mortgage by installments.
Annual Percentage Rate (A.P.R.)
The interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated rate on the mortgage because it takes into account points and other credit costs.
Appraisal
An opinion of the market value of a property, made by a qualified "appraiser".
Appreciation
An increase in value due to changes in market conditions or other causes.The value an owner has in real estate over and above the loans against the property.
The interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated rate on the mortgage because it takes into account points and other credit costs.
Appraisal
An opinion of the market value of a property, made by a qualified "appraiser".
Appreciation
An increase in value due to changes in market conditions or other causes.The value an owner has in real estate over and above the loans against the property.
Assessed values
The valuation placed on property by a public tax assessor for purposes of taxation.
Assessment
A charge against real estate made by a unit of government. It is calculated by using the property's assessed values and a tax rate established by the government.
Assessor
A public official who establishes the values of a property for taxation purposes.
Asset
Items of values owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets". These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.
Assignment
When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment
Assumption
The transfer of the seller's existing mortgage to the buyer.
The transfer of the seller's existing mortgage to the buyer.
Balloon Mortgage
Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.
Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.
Biweekly Mortgage
A mortgage in which you make payments every two weeks instead of once a month. The basic result is that instead of making twelve monthly payments during the year, you make thirteen. The extra payment reduces the principal, substantially reducing the time it takes to pay off a thirty year.
Blanket Mortgage
One mortgage covering two or more specific parcels of realty.
Bond Market
Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down, fixed rate mortgages do approximately the same thing. The same factors that affect the Treasury Bond market also affect mortgage rates at the same time. That is why rates change daily, and in a volatile market can and do change during the day as well.
Broker (Mortgage)
In the mortgage industry, broker usually refers to a company or individual that does not lend the money for the loans themselves, but broker loans to larger lenders or investors. As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so.
Broker (Real Estate)
A licensed person who negotiates the purchase and sale of real estate for another. See definition of REALTOR for distinction.
Building Codes
Rules established by local governments to regulate construction standards.
Building Restrictions
Limitations on the use of property or the size and location of improvements established by legislation or by covenants in deeds.
Bureau of Conveyances
The state office which houses all legal documents relative to title to both land court and regular system property recorded since 1848.
Buy-Down
When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.
When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.
Capitalization (CAP)
The act of converting future income into current equivalent values.
Capitalization Rate
The relationship or ratio between the net income from a real estate investment and the values of the investment, usually expressed as a percentage; the rate of the interest which is considered a reasonable return on the investment. - The percentage rate of return on a property during a one year period. The formula is expressed as follows: annual net income/purchase price x 100 = cap rate.
Cash Reserve
Sufficient cash remaining after closing to make the first two mortgage payments.
Sufficient cash remaining after closing to make the first two mortgage payments.
Certificate of Eligibility
A document issued by the Veterans Administration that certifies a veteran's eligibility for a VA loan.
Certificate of Reasonable values (CRV)
Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.
Chain Of Title
An analysis of the transfers of title to a piece of property over the years.
Clear Title
A title that is free of liens or legal questions as to ownership of the property.
Closing
The occasion where a sale is finalized; the buyer signs the mortgage, and closing costs are paid. Also called "settlement."
The occasion where a sale is finalized; the buyer signs the mortgage, and closing costs are paid. Also called "settlement."
Closing Costs
Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. "Pre-paids" are items which recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application.
Closing Statement
A statement of settlement made by a by an escrow company that reflects the financial position of the buyer and seller in that particular real estate transaction. Also see Settlement Statement.
Cloud On Title
Any conditions revealed by a title search which may affect or impair the owner's title to property because of their apparent or probable validity. Usually clouds on title cannot be removed except by deed, release, or court action.
Co-Borrower
An additional individual who is both obligated on the loan and is on title to the property.
Collateral
In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust
Commission
An agent's compensation for performance of the duties of his agency; in real estate practice, a percentage of the selling price of the property, or percentage of rentals, etc. Typically the total commission is split between the seller's and buyer's brokers.
Commitment
A promise by a lender to make a loan on specific terms to a borrower.
A promise by a lender to make a loan on specific terms to a borrower.
Common Areas
Areas used by two or more tenants and/or third parties, and not under the control of anyone tenant.
Common Area Maintenance Fees
Also known as net operating expenses. Expenses paid by tenants under triple net leases.
Common Expense
In a condominium, the expenses of operation, all sums designated as such by the declaration or bylaws.
Common Interest
The percentage of undivided interest in the common elements of a building appertaining to each apartment in a condominium.
Common Law
An unwritten body of law based on general custom in England and used to an extent in some states.
Community Property
In some states property acquired by a married couple during their marriage is considered to be owned jointly, except under special circumstances.
Comparable Sales
Recent sales of similar properties in nearby areas and used to help determine the market values of a property. Also referred to as "comps."
Comprehensive Zoning Code (CZC)
Code which sets forth the zoning regulations.
Construction Loan
A short term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses.
Contingency
A condition that must be met before a contract is legally binding.
A short term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses.
Contingency
A condition that must be met before a contract is legally binding.
Construction Loan - A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
Convertible ARM
An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions.
Convertible ARM
An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions.
Conveyance
The transfer of the title of land from one to another; an instrument which carries from one person to another an interest in land.
Conveyance Tax
A tax paid by the seller upon transfer of deed, based upon (currently) .1% of the sales price.
Cooperative (Co-op) Ownership
Ownership which usually takes the form of shares of stock in a corporation owning the entire building and a proprietary lease giving the stockholder/tenant the right to occupy a unit for which he pays a proportionate share of the maintenance and operating expenses.
Covenant
A clause in a mortgage that obligates or restricts the borrower and that, if violated, can results in foreclosure.
Debt-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income.
Deed
The legal document conveying title to a property.
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income.
Deed
The legal document conveying title to a property.
Deed-In-Lieu
Short for "deed in lieu of foreclosure," this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents preparatory to a foreclosure being recorded and become a matter of public record.
Default
Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage.
Delinquency
Failure to make payments on time. This can lead to foreclosure.
Deposit Cash
Paid to the seller when a formal sales contract is signed.
Depreciation
A decline in the value of a property; the opposite of "appreciation."
Down Payment
Money paid to make up the difference between the purchase price and the mortgage amount.
Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage.
Delinquency
Failure to make payments on time. This can lead to foreclosure.
Deposit Cash
Paid to the seller when a formal sales contract is signed.
Depreciation
A decline in the value of a property; the opposite of "appreciation."
Down Payment
Money paid to make up the difference between the purchase price and the mortgage amount.
Discount Points
In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to any "points" paid in addition to the one percent loan origination fee. A "point" is one percent of the loan amount.
Earnest Money
Given by buyer to seller as part of the purchase price to bind the transaction.
Given by buyer to seller as part of the purchase price to bind the transaction.
Easement
A right of way giving persons other than the owner access to or over a property.
Eminent Domain
The right of a government to take private property for public use upon payment of just compensation. Eminent domain is the basis for condemnation proceedings.
Encroachment
An improvement that intrudes partly or wholly on another's property.
Encumbrance
Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.
Equal Credit Opportunity Act (ECOA)
Federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equity Loan
A loan based on the borrower's equity in his or her home.
Escrow
Refers to a neutral third party who carries out the instruction of both the buyer and seller to handle all the paperwork of settlement or closing. Escrow may also refer to an account held by the lender into which the home buyer pays money for tax or insurance payments.
Federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equity Loan
A loan based on the borrower's equity in his or her home.
Escrow
Refers to a neutral third party who carries out the instruction of both the buyer and seller to handle all the paperwork of settlement or closing. Escrow may also refer to an account held by the lender into which the home buyer pays money for tax or insurance payments.
Estate
The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.
Eviction
The lawful expulsion of an occupant from real property.
Exclusive Right To Sell
A written agreement between owner and agent giving agent the right to sell and to collect a commission if the property is sold by anyone during the term of the agreement.
Executor
person named in a will to administer an estate. The court will appoint an administrator if no executor is named. "Executrix" is the feminine form.
Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.
Fair Market values
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
Fannie Mae (FNMA)
The Federal National Mortgage Association, which is a congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds. For a discussion of the roles of Fannie Mae, Freddie Mac (FHLMC), and Ginnie Mae (GNMA).
Fannie Mae's Community Home Buyer's Program
An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income family's buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.
Fee Simple
The greatest possible interest a person can have in real estate.
Fee Simple Estate
An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.
FHA Mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a government loan.
Fiduciary
A person in a position of great trust and confidence, as the relationship between principal and broker (agent).
Firm Commitment
A lender's agreement to make a loan to a specific borrower on a specific property.
First Mortgage
The mortgage that is in first place among any loans recorded against a property. Usually refers to the date in which loans are recorded, but there are exceptions.
Fixed-Rate Mortgage
A mortgage in which the interest rate does not change during the entire term of the loan.
Fixture
Personal property that becomes real property when attached in a permanent manner to real estate.
Flood Insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.
Foreclosure
Legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage.
Fixed-Rated Mortgage
A mortgage on which the interest rate is set for the term of the loan.
Legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage.
Fixed-Rated Mortgage
A mortgage on which the interest rate is set for the term of the loan.
401(k)/403(b)
An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations.
Government Loan (Mortgage)
A mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or the Rural Housing Service (RHS). Mortgages that are not government loans are classified as conventional loans.
Government National Mortgage Association (Ginnie Mae)
A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). GNMA performs the same role as Fannie Mae and Freddie Mac in providing funds to lenders for making home loans. The difference is that Ginnie Mae provides funds for government loans (FHA and VA).
Graduated Payment Mortgage (GPM)
A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off.
Guaranty
A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.
A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off.
Guaranty
A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.
Grantee
The person to whom an interest in real property is conveyed.
Grantor
The person conveying an interest in real property.
Hazard Insurance
A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm and the like.
A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm and the like.
Home Equity Line Of Credit
A mortgage loan, usually in second position, that allows the borrower to obtain cash drawn against the equity of his home, up to a predetermined amount.
Home Inspection
A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.
Homeowners' Association
A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.
Homeowner's Insurance
A policy that combines liability coverage and hazard insurance.
Homeowner's Warranty
A type of insurance that covers repairs to specified parts of a house for a specific period of time.
Housing Expenses-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her gross monthly income.
A policy that combines liability coverage and hazard insurance.
Homeowner's Warranty
A type of insurance that covers repairs to specified parts of a house for a specific period of time.
Housing Expenses-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her gross monthly income.
HUD-1 Settlement Statement
A document that provides an itemized listing of the funds that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow (impound) amounts. Each type of expense goes on a specific numbered line on the sheet. The totals at the bottom of the HUD-1 statement define the seller's net proceeds and the buyer's net payment at closing. It is called a HUD1 because the form is printed by the Department of Housing and Urban Development (HUD). The HUD1 statement is also known as the "closing statement" or "settlement sheet."
Impound
That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due.
Index
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments, which is then used to adjust the interest rate.
Impound
That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due.
Index
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments, which is then used to adjust the interest rate.
Interest
The fee charged by the lender for borrowing money.
The fee charged by the lender for borrowing money.
Interim Financing
A construction loam made during completion of a building or a project. A permanent loan usually replaces this loan after completion.A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closes with that buyer within a set period of time. The lock-in also usually specifies the number of points to be paid at closing as well.
A construction loam made during completion of a building or a project. A permanent loan usually replaces this loan after completion.A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closes with that buyer within a set period of time. The lock-in also usually specifies the number of points to be paid at closing as well.
Joint Tenancy
A form of ownership by two or more persons in which each of the owners has an equal interest. A distinctive feature of the joint tenancy is the right of survivorship by which the surviving tenants succeed to the interest of the deceased joint tenant.
Judgment
A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.
Judicial Foreclosure
A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court. Other states use non-judicial foreclosure.
Jumbo Loan
A loan which is larger than $322,700.
A loan which is larger than $322,700.
Late Charge
The penalty a borrower must pay when a payment is made a stated number of days. On a first trust deed or mortgage, this is usually fifteen days.
Lease
A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time.
Leasehold Estate
A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.
Lease Option
An alternative financing option that allows home buyers to lease a home with an option to buy. Each month's rent payment may consist of not only the rent, but an additional amount which can be applied toward the down payment on an already specified price.
Legal Description
A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.
Lender
A term which can refer to the institution making the loan or to the individual representing the firm. For example, loan officers are often referred to as "lenders."
Lessee
The tenant in a lease.
Lessor
The landlord/owner in a lease.
Liabilities
A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.
Liability Insurance
Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party. It is usually part of a homeowner's insurance policy.
Lien
A legal claim against a property that must be paid when the property is sold.
A legal claim against a property that must be paid when the property is sold.
Line Of Credit
An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower.
Liquid Asset
A cash asset or an asset that is easily converted into cash.
Loan-to-Value Ratio
The relationship between the amount of the mortgage loan and the appraised value of the property, expressed as a percentage.
The relationship between the amount of the mortgage loan and the appraised value of the property, expressed as a percentage.
Planned Unit Development (PUD)
A type of ownership where individuals actually own the building or unit they live in, but common areas are owned jointly with the other members of the development or association. Contrast with condominium, where an individual actually owns the airspace of his unit, but the buildings and common areas are owned jointly with the others in the development or association.
Margin
The set percentage added to the index rate to determine the interest rate of an ARM.
Mortgage
A legal document that pledges a property to the lender as security for payment.
Mortgage Insurance (Private Mortgage Insurance - PMI)
Money paid to insure the mortgage when the down payment is less than 20 percent. Insurance provided by a non governmental insurer that protects lenders against a loss if a borrower defaults.
Mortgagee
The lender.
Mortgagor
The borrower / homeowner.
Negative Amortization
Occurs when monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan.
Origination Fee
The fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property; usually computed as a percentage of the face value of the loan.
Owner Financing
A purchase in which the seller provides all or part of the financing.
Payment Cap
A provision of some ARMs limiting how much a borrower's payments may increase regardless of how much the interest rate increases.
PITI
Principal, Interest, Taxes and Insurance. Also called monthly housing expense.
Points (loan discount points)
Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount.
Power of Attorney
A legal document authorizing one person to act on behalf of another.
Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount.
Power of Attorney
A legal document authorizing one person to act on behalf of another.
Pre-Approval - A loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the underwriting guidelines of the lender. Contrast with pre-qualification.
Pre-Payment
A privilege in a mortgage permitting the borrower to make payments in advance of their due date.
Pre-Payment Penalty
Money charged for an early repayment of debt.
Pre-Payment
A privilege in a mortgage permitting the borrower to make payments in advance of their due date.
Pre-Payment Penalty
Money charged for an early repayment of debt.
Prime Rate - The interest rate that banks charge to their preferred customers. Changes in the prime rate are widely publicized in the news media and are used as the indexes in some adjustable rate mortgages, especially home equity lines of credit. Changes in the prime rate do not directly affect other types of mortgages, but the same factors that influence the prime rate also affect the interest rates of mortgage loans.
Principal
The amount of debt, not counting interest, left on a loan.
Qualifying Ratios
Guidelines applied by lenders to determine how large a loan to grant the home buyer. The debt-to-income ratio is your current monthly debt on loans and credit cards divided by your gross income. The housing-to-income ratio is your new housing payments divided by your gross income.
Principal
The amount of debt, not counting interest, left on a loan.
Qualifying Ratios
Guidelines applied by lenders to determine how large a loan to grant the home buyer. The debt-to-income ratio is your current monthly debt on loans and credit cards divided by your gross income. The housing-to-income ratio is your new housing payments divided by your gross income.
Rate Lock
A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost.
Real Estate Settlement Procedures Act (RESPA)
Real Estate Settlement Procedures Act (RESPA)
A consumer protection law that requires lenders to give borrowers advance notice of closing costs.
Recording Fees
Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.
Refinancing
The process of paying off one loan with the proceeds from a new loan secured by the same property. This is most often done to get the better interest rates offered by the new loan.
Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.
Refinancing
The process of paying off one loan with the proceeds from a new loan secured by the same property. This is most often done to get the better interest rates offered by the new loan.
Right Of First Refusal
A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
Right Of Ingress Or Egress
The right to enter or leave designated premises.
Right Of Survivorship
In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
Second Mortgage
A mortgage made subsequent to another and subordinate to the first one.
A mortgage made subsequent to another and subordinate to the first one.
Setback
An ordinance prohibiting the erection of a building or structure between the curb or other established line and the setback line; the distance a house must be set back from the street or the adjoining property in accordance with local zoning rules
Settlement Statement
See HUD1 Settlement Statement
Severalty
Sole or independent ownership
Subdivision
A housing development that is created by dividing a tract of land into individual lots for sale or lease.
Subordinate Financing
Any mortgage or other lien that has a priority that is lower than that of the first mortgage
Survey
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
Sweat Equity
Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.
Tenancy At Sufferance
A tenancy arising when the tenant wrongfully holds over after the expiration of his term. The landlord has the choice of evicting the tenant or accepting him for a similar term and under the conditions of the previous holding.
Tenancy by the Entirety
A special joint tenancy between spouses, with both spouses having equal undivided interest in the whole property. Upon the death of one spouse, the surviving spouse succeeds to the entire property without the need of probate. An important aspect of this tenancy is that a creditor of one spouse cannot force a partition sale of a property owned in tenancy by the entirety, as could a creditor of one spouse if title were held as joint tenants.
Tenancy in Common
A form of ownership of property between two or more persons in which each owner has an undivided interest in the whole property. Each owner is called a co-tenant and the interest of each may be equal or unequal. Unlike a joint tenancy, there is no right of survivorship in a tenancy in common. Thus, on death the interest of the deceased co-tenant will pass according to will or by intestacy, and probate will be required.
Tenancy in Severalty
This tenancy is for an individual person. The individual holds the entire title. When the individual dies the title will usually pass through probate. There is no right of survivorship.
Time Is Of The Essence
In a contract, a requirement of punctual performance.
Title
A document that gives evidence of an individual's ownership of property.
Title Insurance
A policy, usually issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller.
Title Search
An examination of municipal records to determine the legal ownership of property. This is usually performed by a title company.
Transfer Tax
State or local tax payable when title passes from one owner to another.
Triple Net Lease (Net Lease)
A document that gives evidence of an individual's ownership of property.
Title Insurance
A policy, usually issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller.
Title Search
An examination of municipal records to determine the legal ownership of property. This is usually performed by a title company.
Transfer Tax
State or local tax payable when title passes from one owner to another.
Triple Net Lease (Net Lease)
Lease under which the lessee pays the agreed upon rent plus all costs of maintenance, repair, real property taxes, insurance, utilities, etc.
Truth-In-Lending
A federal law that requires lenders to full disclose, in writing, the terms and conditions of a mortgage, including the APR and other charges.
A federal law that requires lenders to full disclose, in writing, the terms and conditions of a mortgage, including the APR and other charges.
Trustee
One who holds property in trust for another to secure the performance of an obligation
Two-Step Mortgage
A mortgage in which the borrower receives a below-market interest rate for a specified number of years, and then receives a new interest rate adjusted (within certain limits) to market conditions at that time.
Underwriting
The decision whether to make a loan based on credit, employment, assets, and other factors and the matching of this risk to an appropriate rate, term & loan amount.
A mortgage in which the borrower receives a below-market interest rate for a specified number of years, and then receives a new interest rate adjusted (within certain limits) to market conditions at that time.
Underwriting
The decision whether to make a loan based on credit, employment, assets, and other factors and the matching of this risk to an appropriate rate, term & loan amount.
VA Mortgage
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).
Variance
Permission obtained from the zoning authorities permitting the construction of a building or structure that is forbidden by present zoning ordinances; a departure from the general rule.
Verification of Deposit (VOD)
A document signed by the borrower's financial institution verifying the status and balance of his/her financial accounts.
Verification of Employment (VOE)
A document signed by the borrower's employer verifying his/her position and salary.
A document signed by the borrower's financial institution verifying the status and balance of his/her financial accounts.
Verification of Employment (VOE)
A document signed by the borrower's employer verifying his/her position and salary.
Vested
Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.
Veterans Administration (VA)
An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.
Warranty Deed
A deed in which the grantor fully warrant a good clear title to the property; a deed that contains covenants of title.
Zoning
An act of the city or county authorities by exercise of police power in regulating, controlling or specifying the type of use to which property may be put in specific areas.
