Abstract of Law / Judgment
The summary of a court judgment that has created a lien against a piece of property.
Abstract of Title
A summary of public records in regard to the title on a piece of property. Abstracts must be consulted to be certain there are no liens or other claims outstanding against the property before the buyer can purchase it.
Accelerated Cost Recovery
A system of tax calculation that allows for greater depreciation of a piece of property in the first few years it is owned. (Also known as accelerated depreciation)
A provision in a mortgage that allows the lender to request the remaining balance of the loan if payments are not made on time.
See accelerated cost recovery.
A written document that the seller of a property has accepted the offer from a potential buyer.
How easily a handicapped person can enter a building.
A buildup of land caused by wind or water (usually occurs on waterways such as rivers and streams).
A written document that states that the person who signs it is doing so of their own free will (usually attached to legal documents).
43,560 square feet of land.
The volume needed to cover an acre of land one foot deep.
The precise age of a building since its construction.
An addition or change to an existing contract. Sometimes known as a rider.
Additional Principal Payment
Extra money included in a regular mortgage payment to reduce the amount of principal to be paid later.
Adjustable Rate Mortgage (ARM)
A type of mortgage that has an interest rate that can change depending on the fluctuations of the index rate.
Adjusted Cost Basis
The cost of improvements the seller has made to their property. This is deducted from the sale price of the home to determine if the seller has made a profit.
Adjustment Period / Adjustment Interval
The period or interval of time between interest rate adjustments on an adjustable rate mortgage.
A person who is given the authority to settle and/or distribute the estate of a person who died without a will.
A legal document used by an administrator to distribute property.
Acquiring a property by living on or using it, even though the property's title is owned by someone else. Oftentimes called squatting.
A person who makes a sworn statement.
A written contract that states that a specific person (usually a real estate agent) has authority to act on behalf of someone else (usually either the buyer or seller).
The completion of a loan by a person or organization who has been given agency by the original lender.
A man or woman who has been licensed to buy or sell real estate.
The boundary agreed to by two or more property owners when the original boundary line is in dispute.
Agreement of Sale
A legal document that lists all the terms of a property transaction, including price. Must be signed by both the seller and the buyer.
A mortgage provision that states the original borrower must pay back the entire loan once the mortgaged property is transferred or sold.
The right to the air space above an owned property.
A cost estimate for the installation or repair of non-essential items in or around a property.
ALTA (American Land Title Association) Owner's Policy
An expanded title insurance policy that protects against extraordinary circumstance such as unclaimed water and mineral rights or unrecorded easements.
Any mortgage that deviates from the standard fixed-rate loan.
A change to a specific section of a legal document without altering the rest of it.
Items that aren't essential to live in a property, but make it more attractive (i.e., a dishwasher, an indoor swimming pool, etc.).
American Society of Home Inspectors
A professional association whose members inspect homes for potential buyers.
The process of making regular payments on both the principal and interest of a mortgage until the loan is completely repaid.
A math table used to calculate payments on an amortized loan.
A loan or mortgage that is to be paid off via amortization.
An electrical current's strength.
Annual Mortgagor Statement
A yearly statement sent to a mortgage borrower that details how much of that year's payments went to the principal and interest on a loan.
Annual Percentage Rate (APR)
The total yearly cost of a mortgage or a loan, including interest, points, and other fees.
A form of communication that is made when a person believes they are about to break (or breach) the terms of a contract or other legal document.
A fee charged by a loan lender to process an application.
An estimate of the value of a property as of a particular date, generally done by a professional appraiser.
Fee charged by the appraiser to make an appraisal.
A document that shows the relative value of a property as compared to similar properties in the area.
An estimate of the current value of a property, general made by an appraiser.
An increase in the value of a property from the time it is purchased.
An attorney authorized to close properties and make opinions on titles. These individuals are generally authorized by title insurance companies.
Anything specifically left behind on a property by a seller to be used by the buyer.
A property that is to be sold in its current condition.
The initial price set by a property's seller.
The value of a property as determined by a tax assessor. A property's assessed value is used to determine the amount of property taxes the owner must pay.
A local tax placed on a property in addition to its existing taxes. Assessments are generally used by local governments to improve the neighborhood.
A list of taxable properties.
Items of positive value, such as stocks, real estate, and cash.
To transfer interest or rights of a property to a particular person(s).
The person(s) who receives a transfer of rights or interest of a property.
The person(s) who transfers the interest or rights of a property.
A mortgage that can be transferred from one borrower to another.
A provision in a seller's mortgage that allows the property's next owner to assume the payment schedule laid out in that mortgage.
A fee assessed in order to transfer an assumable mortgage from a seller to a buyer.
Court seizure of property in order to repay an outstanding debt.
Attorney in Fact
An agency relationship that specifies that a particular person has power of attorney.
Back Title Letter
A letter sent to an attorney that allows them to examine a property's title for insurance purposes.
Back to Back Escrow
The process of selling one property while simultaneously buying another.
A bid that a seller will accept if their first choice offer falls through.
A written statement that shows the net worth of a person or organization.
A loan whose amortization does not work out to the entire sum of the loan. In this case, a large (or balloon) payment is made at the end.
A mortgage that has a short, fixed-rate period interest in which small amounts are payable each month. The payment at the end of this mortgage is the outstanding amount of the loan.
A stipulation of Federal Law that allows an insolvent debtor to receive relief from creditors. A Trustee is assigned to sell off the debtors assets in order to repay the debts. Bankruptcy appears on your credit report for seven years after the initial declaration.
A property that is put up for sale for less than current market value.
One one-hundreth of a percent, or .01%.
The total of a person's salary, investments, etc., before taxes are assessed.
A person who receives a benefit, usually cash or property.
Property given to a beneficiary through a last will and testament.
An addition or improvement to a property that increases its value (i.e., a second bathroom).
Competing bids for the same property.
See Reciprocal Contract
Bill of Sale
The document that transfers property from one person to another.
A document from a title insurance company stating that they will insure a property under a specific set of guidelines.
A mortgage that requires payment every two weeks.
A single mortgage that covers two or more properties.
A house that is close to its original condition. Like new.
Board of Equalization
A state organization that makes certain property taxes are assessed fairly and uniformly.
Standard wording on mortgages and other documents.
An agreement or amount of money that protects a person from losses or defaults by another person.
A property's value, based on cost plus additions, minus depreciation.
Breach of Contract/Covenant
Failure to follow the regulations set up in a contract or covenant.
Breach of Warranty
The inability of a seller to pass along a clear title to a buyer.
When an owner is bringing in enough rental income to match their expenses, they have reached the break-even point.
A short-term loan given to a buyer so that they can gain time to fully finance their mortgage.
A person who is licensed to deal in real estate. Also, a person who can help a buyer find mortgage financing.
Laws and regulations that dictate how a property can be built or remodeled.
Disallowing new construction, usually to increase the value of existing properties.
A permit that allows new homes to be built, or existing homes to be renovated.
Building Restriction Line
An imaginary line that represents the size limit for a building.
A mortgage in which the interest rate is lowered to attract buyers. This is usually accompanied by a small price increase.
A real estate agent who represents buyers exclusively.
A market advantageous to buyers, with many properties for sale and not many people to purchase them.
Mild depression that occasionally occurs with first-time homebuyers after they have closed on a property.
Rules and regulations that govern a corporation or an association. Usually seen with co-ops and condominiums.
A mortgage provision that allows a buyer to find out their balance at any time.
A mortgage provision that details how the interested parties may cancel the document.
A limit on how high the monthly interest on an adjustable rate mortgage can be risen.
Spending money in order to improve a property.
The profit made from selling investments, whether they are stocks or real estate.
Capital Gains Tax
A tax placed on capital gains.
Increasing the value of a property through capital expenditure.
A formula used to estimate a property's value based on net income.
The capitalization of a property, expressed as a percentage.
The cash income generated from renters living in an owned property, minus operating expenses, outstanding loans, etc.
A check made out from a bank's own account.
Taking out a loan in order to completely pay off a previous loan, and still having additional funds to take care of other financial matters.
Latin for "let the buyer beware." Always a sound principle when purchasing real estate.
Certificate of Deposit (CD)
A document that confirms a person has deposited money in an account. Usually used with banks.
Certificate of Deposit Index
An index based on the rates of six-month certificates of deposit. The interest on some adjustable rate mortgages is determined with this index.
Certificate of Eligibility
A certificate given to qualified veterans that proves they are eligible for a VA loan.
Certificate of Occupancy
A certificate that states a particular property is suitable to be lived in.
Certificate of Sale
A certificate that states a buyer is entitled to a property's deed.
Certificate of Satisfaction
A certificate issued once the terms of a lien, deed of trust, or mortgage are satisfied.
Certificate of Title
A certificate that summarizes the title on a particular property.
Chain of Title
The record of owners of a particular property.
The frequency of rate changes on an adjustable rate mortgage.
A mortgage that uses a person's chattel as collateral.
A legal claim filed on behalf of a specified group of people.
Classified Property Tax
A tax levied on property that varies on how it is classified to be used.
A property's title that is free from liens or other legal proceedings.
The final meeting in which ownership of a property changes hands from seller to buyer.
Fees associated with the transfer of property from seller to buyer.
The day on which a closing takes place.
A statement that details the final monetary agreement between the seller and the buyer, including the fees which each party has paid.
Cloud on Title
A claim or other legal proceeding which clouds the marketability of a particular property's title.
Any kind of insurance that involves more than one insurance company.
Providing additional security (such as chattel) in order to get a loan.
Steps taken by a mortgage issuer to bring outstanding payments up to date.
A property that has been zoned for commercial usage.
An occasionally negotiable fee paid to a real estate agent or broker for their services, generally a fixed percentage of the property's price.
A written promise by a loaning institution that they will provide a mortgage, under specific conditions for a precise period of time.
A fee charged for making a commitment.
An area within a property that is equally owned by all its residents.
Common Area Assessments
Fees paid to maintain or improve a property's common area.
A property comprised of individual units that share a common area(s).
Property acquired by joint effort of a married couple or other state-recognized partnerships.
Community Reinvestment Act
A federal law that encourages local lenders to loan to neighborhood applicants.
Properties similar to the one currently being sold.
Comparative Market Analysis
The estimated value of a property, based on sales of comparables.
Interest that is added onto existing interest.
Government takeover of a property against the owner's will, usually because the property is unsuitable to be lived in.
A commitment granted by a loaning institution, as long as the person receiving the commitment meets certain stated conditions.
A property that is split into individually owned units, with the owners all having a stake in the common areas.
Changing the title on a property so that instead of being owned by a single person, each unit in the building is individually owned.
A court-appointed guardian or committee that acts on behalf of a property's owner when the owner is unfit to manage their own affairs (i.e., a minor).
Consumer Credit Counseling Service (CCCS)
A nonprofit organization that helps people get themselves out of debt.
Properties that are attached or directly adjacent to each other.
A property for sale with a specific contingency attached.
A fee that must be paid only if a certain contingency arises.
A legally binding agreement between two or more parties.
Contract for Deed
A contract in which a property's seller agrees to defer part or all of the price for a specific period of time. The seller retains the property's title until the buyer has paid the entire purchase price.
Contract to Purchase
See Agreement of Sale.
A person who is under contract to build a new property or to make improvements to an existing property.
A voluntary contract or other legal obligation.
Restrictions placed on development in a specific area.
A loan made by a bank or other institution for the purchase of a property.
A provision in a convertible adjustable-rate mortgage that details the conditions under which the mortgage can be converted.
Convertible Adjustable-Rate Mortgage
A loan that begins as an adjustable-rate mortgage, but can be converted to a fixed-rate mortgage within certain time constraints.
Transfer of a property's title.
A tax imposed on a conveyance.
A property split into individually owned units. Unlike a condominium, a person in a cooperative owns shares in a corporation that owns the building. The amount of monthly payments generally dictates how many shares a person has.
The corporation that owns a cooperative on behalf of its shareholders.
A mortgage granted to a cooperative property.
The effect of a street corner's proximity to the value of a property.
Work needed to fix flaws in a property.
A person who signs a promissory note with a borrower. This person is responsible for paying the loan if the initial borrower cannot.
The method an appraiser uses to determine how much an improvement will cost, minus any depreciation.
A contract in which the builder determines the cost based on labor and materials, then adds a certain percentage to insure they make a profit.
A response to an offer.
Ownership of a property by more than one person.
A written agreement promising certain acts.
Covenants, Conditions and Restrictions (CC&Rs)
A set of rules that lay out what tenants of condominiums and cooperatives can and cannot do in terms of improvements, and what obligations the tenants must fulfill while owning a unit within the property.
Unique financing arrangements meant to make a property more enticing to buyers.
Money lent to a buyer in order to make a purchase, which must be repaid.
A person or organization that extends credit.
Credit Life Insurance
Life insurance that pays off a mortgage in the event the borrower dies.
The ability of a person to pay off debts incurred by receiving credit.
A report that details a person's prior history of paying off debts incurred by receiving credit.
A property defect that is relatively easy or cheap to repair.
The ratio of monthly payments on long-term debts divided by gross income, usually expressed as a percentage.
A legal document that conveys ownership of a property.
Deed of Trust
A legal document that allows a lender to foreclose on a property should a person not be able to meet their mortgage payments.
Failure to meet the conditions set forth in a legal document (i.e., not making monthly mortgage payments).
Interest that does not require immediate payment. Generally this interest is added to the balance of the loan.
Property maintenance that has been put off, usually resulting in a lower value.
A judgment rendered in favor of a person who has sold off a foreclosed property, but has not made enough capital to cover their costs. The judgment allows the property's seller to collect the balance from the previous owner.
A mortgage given to a buyer who is already behind on other payments.
The transfer of a deed from one owner to the next.
An initial cash outlay towards the purchase of a property.
A decline in value of a property from its original price.
A document that lays out the physical dimensions of a property. Not to be confused with blueprints, which are more detailed.
A document that lists any potential defects of a property (i.e., asbestos insulation, failing appliances, etc.)
A property in poor shape.
Document Needs List
A list of documents needed by a lending institution in order to process a mortgage application.
The interest in a property retained by the spouse of a deceased partner.
The difference between the purchase price of a property and a mortgage, to be paid up front.
A real estate agency that represents both the seller and buyer in a transaction.
A provision in a mortgage that states that a buyer must pay the entire outstanding balance should they sell the property being mortgaged.
A property spread over two floors.
Being able to move into a property before the official sale is completed.
Money accompanying an offer to purchase. See deposit.
The temporary or permanent right for a third party to use a property for a specific purpose (i.e., power lines).
The estimate age of a property, if the actual age cannot be established.
Effective Gross Income
Additional income (other than base salary) taken into consideration by a mortgage lender.
The right of the government to take over private property for public use, with monetary compensation to be made to the owner.
Company programs that assist their employees in purchasing property.
Couples who are looking for a smaller property because their children have moved out of their previous home.
A physical portion of a property that extends onto another property (i.e., a driveway).
A lien or other claim against a property.
A person who signs over their property to another person.
Environmental Impact Statement
A government-mandated statement that details the environmental impact the construction of a new property will incur.
Equal Credit Opportunity Act (ECOA)
A federal law that prohibits lenders from discriminating against potential buyers on the basis of their race, sex, marital status, religion, age, national origin or the fact that they are currently receiving public assistance.
The current value of a property to its owner, minus outstanding mortgage payments or other debts.
Joint ownership between the occupant of a property and another investor. Each receives a portion of tax write-offs, and any profit made from the later sale of the property is split between them.
Errors and Omissions Insurance
Insurance that protects against mistakes made by a builder when constructing a new property.
Property that transfers to the state if its owner dies without a will or heirs.
A party other than a buyer or seller who holds documents and moneys for property transactions until closing.
An account opened for a buyer to deposit money to cover expenses such as property taxes or homeowners insurance.
The person in charge of an escrow account.
An analysis of an escrow account to determine if a buyer has enough money set aside to cover expenses such as property taxes or homeowners insurance.
The closing of an escrow account once a property has officially changed hands from seller to buyer.
A company that specializes in handling escrow accounts.
A deduction from an escrow account to pay expenses such as property taxes or homeowners insurance.
Total assets of a person who is recently deceased.
Legal proceedings to evict a tenant. Most evictions occur when a tenant fails to pay rent.
Examination of Title
A title company's inspection of public records to determine a property's entire ownership history.
A property that is being shown by one particular real estate agent or agency.
The person appointed to carry out the terms of a will and distribute the items of estate. If a person dies without a will, the courts generally appoint an executor.
A female executor.
Fair Credit Billing Act
A federal law that allows consumers to sue credit card companies to recover funds lost due to billing errors.
Fair Credit Reporting Act
A federal law that allows consumers easy access to their credit reports, and to request changes if any information is outdated or inaccurate. The law also states who besides the consumer may have access to this information.
Fair Debt Collection Practices Act
A federal law that provides guidelines for creditors to follow in collecting outstanding debts.
Fair Housing Act
A federal law that makes it illegal to refuse to sell a property based on a potential buyer's race, religion, national origin, family status, color, or disability.
The Federal National Mortgage Association. The association buys mortgages from lenders and sells them on the secondary mortgage market.
Federal Home Loan Mortgage Corporation
A corporation that buys mortgages from lenders and sells shares to investors. Also known as Freddie Mac.
Federal Housing Administration (FHA)
A government agency that provides mortgages to qualified buyers for a small down payment.
Federal National Mortgage Association
See Fannie Mae.
Federal Reserve Board
An economic committee that controls inflation by raising and lowering interest rates, which directly influences the interest rate on mortgages.
Federal Trade Commission
A government agency in charge of regulating certain companies and industries, including some mortgage lenders.
The maximum amount of interest a person can have in a property.
Fee Simple Defeasible
A person holding fee simple title to a property, with certain stated conditions.
A loan insured by the Federal Housing Administration.
The belief that a property's physical aspects will influence the life of its owner.
Any relationship of trust between two or more parties (i.e., a real estate agent and a potential buyer).
A statement of property improvements that are subject to liens.
A fee paid to a person for finding a suitable property for a buyer.
The primary mortgage, which must be paid off before all other property debts.
A monthly mortgage payment.
A mortgage whose interest rate remains fixed throughout its entire term.
The specific amount of time an owner of a timeshare can use the property.
Any property that requires a significant amount of maintenance, but is still habitable.
Anything permanently affixed to a property (i.e., a toilet).
A set fee charged by a real estate agent in lieu of a percentage of a property's sale value.
A delay in foreclosure proceedings or other legal proceedings against a delinquent borrower.
The process by which a lender sells off the property of a delinquent borrower in order to pay off the balance of a mortgage or other loan.
The loss of property rights by a delinquent mortgage borrower.
For Sale By Owner
A property being sold through its owner instead of a real estate agent.
See Federal Home Loan Mortgage Corporation.
The portion of a property that faces a street.
Fully Amortized Adjustable-Rate Mortgage
Any adjustable-rate mortgage that completely pays off the balance of a loan.
Fully Indexed Note Rate
The index of an adjustable rate mortgage plus the gross margin.
A contract provision that prevents property owners from publicly complaining about that property's builder.
The contractor in charge of hiring subcontractors and suppliers during any construction process.
The long-range plans for land usage by the local or federal government.
General Warranty Deed
A grantor's guarantee that a property's title is free of liens or other debts.
A monetary sum given by a buyer's relative or other source for purchasing a property that does not need to be repaid.
See Government National Mortgage Association.
Good Faith Estimate
An estimate of costs a mortgage lender gives to a potential buyer which includes all foreseen fees.
Government National Mortgage Assocation
An agency that buys mortgages from lenders and sells them in shares along with other federally backed loans. Also known as Ginnie Mae.
The time in which a mortgage payment can be made after its due date without incurring a late fee.
Graduated-Payment Mortgage (GPM)
A mortgage that requires larger payments over time until it reaches certain point, when payments then remaining fixed.
A person receiving an interest in a property.
The person giving up interest in a property.
A park located in the vicinity of a property.
A household's total income before expenses.
The points added to the current index value of an adjustable rate mortgage when it is adjusted to its new rate.
When a property's owner grants a long-term lease to a buyer, who may use the property as they see fit. At the end of the lease, the property rights revert back to the owner.
Money paid for usage of a leasehold estate.
A fixed-rate mortgage whose payments increase over time in order to pay down the principal.
A mortgage guaranteed by someone other than the lender, usually a government institution.
A person appointed by the court to oversee the affairs of a minor.
Insurance that protects against common hazards such as fire or winds. It is generally required by all lenders before a mortgage is approved.
A gap between properties that is not included in the description of either property.
A building over six stories tall.
The preservation of historic structures.
A property certified as historic by the Secretary of the Interior, and listed in the National Register of Historic Places.
Home Equity Conversion Mortgage
A mortgage made to allow borrowers to convert property equity into cash without having to sell their property. Payments are made to the borrower on a monthly basis, and the mortgage becomes due if the borrower sells their property.
Home Equity Loan
A loan that allows property owners to borrow against their property's equity. This loan is paid out in one lump sum, and is usually repaid in installments.
An association that collect fees and oversees maintenance of common areas in a community.
Insurance that typically includes hazard insurance, and protects a property from damages that may adversely affect a property's value.
A special insurance policy that is issued for a limited period of time, usually to cover improvements or repairs as they are being done.
The power of local government to create their own general plan.
A document that protects a certain amount of a property's equity against the claims of creditors.
A special insurance policy that covers unforeseen repairs to certain property items.
Denying a person the right to own property based on their race, color, religion, sex, national origin, family status or disability.
Housing Expense Ratio
See debt-to-income ratio.
Fees paid by property developers to finance community parks, schools, etc.
Implied Warranty of Habitability
A court case that determines new properties are suitable for human habitation.
The portion of a borrower's mortgage payment that is used to pay for items such as hazard insurance, property taxes, etc.
The value of a property, estimated from the income it generates.
A property that a buyer uses to generate income rather than provide housing.
A defect in a property that would cost more than the value of that property to fix.
Protection against a specific event that allows for compensation should the event occur.
Any financial table used to set the interest rate on adjustable rate mortgages.
Individual Retirement Account (IRA)
A tax-deferred account that allows individuals to save money for their retirement.
Significant property development in a previously established area.
Individual property developments in a previously established area.
An economic event that occurs when there is more money than items to be purchased generally marked by high interest rates.
Ingress and Egress
The ability to cross over an easement, but not to park on it.
Initial Interest Rate
The first interest rate on an adjustable rate mortgage.
Initial Note Rate
The initial rate of a note, usually less than the index rate. Applies only to adjustable rate mortgages.
A report that lists all the details of a property inspection, including the condition of the property's exterior, electrical system, plumbing and items pertinent to determining the value of the property.
A contract in which a buyer does not own the property until they have completely paid for it.
A property's title that is insured against certain legal disputes, liens or other claims.
Any policy that provides compensation against a specific type of loss.
A temporary insurance policy that serves until a permanent policy is granted.
Insured Closing Letter
A document that provides a mortgage lender with indemnity should the funds from a loan be misappropriated by the closing agent.
A fee property buyers must pay in order to receive a mortgage, usually expressed as a percentage of the mortgage.
A loan whose payments only goes toward the interest on the loan, leaving the principal unchanged.
The amount charged for a loan, expressed as a percentage.
Interest Rate Buy-Down Plan
A plan in which a property's seller advances cash from the sale to the buyer in order to buy-down the monthly mortgage payments.
Interest Rate Cap
Interest Rate Ceiling
The highest amount of interest that can be charged on an adjustable rate mortgage.
A loan granted during the construction of a property until a permanent loan is found.
An estate without a will.
See income property.
When two or more people are liable for the terms of a mortgage.
Joint Ownership Agreement
An agreement that details the rights and responsibilities of two or more co-owners of a property, even if only one person actually lives there.
Property ownership between two or more people, all of whom live on the property. The property automatically passes onto the co-owner(s) if one of the others is deceased.
A lien placed on a property by a court of law.
A foreclosure handled by a court of law.
A loan higher than those insured by such organizations as Fannie Mae.
Any mortgage that is of lesser priority than the first mortgage.
See contract for deed.
A property's exterior surroundings.
A fee imposed when a mortgage payment is not made on schedule.
Any mortgage payment made after it is due.
Any defect in a property that is not immediately noticable.
An agreement that lays out the terms to a tenant in a property owned by someone else.
A long-term agreement that allows a tenant property rights under the provision of a lease.
A lease that allows the renter to purchase the property after a certain amount of a time, for a fixed price.
Any bank or similar institution that offers mortgages and other loans.
A negative reflection on a property's title, such as a prior zoning violation.
A description of a property recognized by a court of law.
Letter of Intent
A document stating that a buyer intends to purchase a property by a certain date for a fixed price.
Purchasing a property with only a 5 to 10 percent down payment.
Any debts or financial obligations that count against a potential buyer's gross income.
An insurance policy that protects property owners from personal injury and other liability lawsuits.
A claim laid against a property. Liens must be removed from a property's title before it can be sold.
A cap on an adjustable rate mortgage that states how high the interest rate can rise over the life of the loan.
The right of a person to own a property for their entire life.
A partnership of individuals with one person making the majority of the decisions.
Any asset that can be converted into cash in a short period of time.
A sum of money given to a particular party if the terms of a property transaction are violated. For instance, a buyer may state beforehand that their liquidated damages will cover the amount of their initial deposit.
A document showing that there is pending litigation against a property's title.
A property placed on the market by a listing real estate agent.
The number of properties for sale in a given real estate market.
An agreement in which two unrelated and unmarried people purchase a property.
A property in which the owner both lives and works.
A preliminary form that must be filled out by potential property buyers that details their basic financial information, the property being mortgaged, and the amount of the loan.
Loan Application Fee
A fee charged to process a loan application.
A commitment from a lender to furnish a mortgage or other loan.
A person who works at a loaning institution (i.e., a bank) who processes loans and loan applications.
Loan Origination Fee
A fee charged by loan institutions when granting mortgages, usually expressed as points on the amount of the loan.
Loan Processing Fee
A fee charged by loaning institutions to gather information to help them process a loan application.
The time period in which a mortgage or other loan must be repaid. Most mortgages have 15 to 30-year terms.
Loan-to-Value Ratio (LTV)
The percentage value of a property as compared to the amount of a mortgage, expressed as a percentage.
A guarantee that a mortgage's interest rate will be the same at the end of the loan approval process as it was in the beginning. Especially sought after when interest rates are fluctuating.
An offer for a property that is significantly below its listed price.
A mortgage or other loan that requires very little evidence of assets or income.
Low Down Payment Loan
A mortgage or other loan that requires only a small down payment on the part of the buyer.
The age at which a person is no longer considered a minor.
Prefabricated properties such as trailer homes.
A monthly fee paid by members of a homeowners' association to finance the upkeep of a property's common areas.
The amount in percentage points that a mortgage lender adds to an adjustable rate mortgage.
The conditions in the real estate market that affect a property's price.
The value of a property given the current market conditions.
A property's title that can be accepted by a buyer without liens or other outstanding claims.
A mortgage or other loan that falls within 5 percent of a property's loan-to-value ratio.
A lien filed against a property's title by an unpaid contractor.
A property price that falls in the middle of prices for other properties in the same neighborhood.
Median Credit Report
A credit report that garners its information from the major credit-reporting companies.
The process in which a neutral third party is brought in to settle a dispute.
Metes and Bounds
A method of describing a property by distances and directions.
Any area that has a broad spectrum of property prices.
Any property development that has more than one use (i.e., both residential and commercial).
Any change in a mortgage or other loan.
A legal document that states that a certain amount of money is being used to purchase a property. If the loan is not paid back according to the terms set forth in the document, the loan is forfeit, and the property may be seized in order to pay it back.
Mortgage Acceleration Clause
A clause in a mortgage that allows a mortgagee to demand the entire remaining sum of the loan.
Any institution that grants mortgages using their own money.
Any institution that directs potential property buyers to appropriate mortgage lenders.
Insurance usually required by mortgage lenders when a buyer is making a down payment of less than 20 percent of the property value. The insurance protects the lender should the buyer default on the mortgage.
A deduction granted by the Internal Revenue Service that allows mortgagors to deduct the interest paid on a mortgage.
Mortgage Life Insurance
A life insurance policy that pays off the remainder of a property's mortgage should its owner die.
The person or institution granting a mortgage.
The person being granted a mortgage so that they may purchase a property.
A person looking to purchase a property as quickly as possible.
A person looking to sell a property as quickly as possible.
Any property currently ready for a buyer to move in.
Any buyer who is looking to purchase a larger property than the one they currently own.
Any property with one mortgage that contains several dwellings (i.e., an apartment building).
Any mortgage on a multi-dwelling property that contains more than four units.
Multiple Listing Service (MLS)
A listing of all properties for sale in a particular area, with the exception of those that are for sale by owner.
Municipal Housing Inspector
Any locally-approved inspector who assures that new property construction meets municipal requirements.
A seller basing the price of their property on items that need to be fulfilled (i.e., buying another property). This may add to (or subtract from) the property's asking price.
Monthly mortgage payments that are not large enough to pay off accrued interest, which actually increases the mortgage's principal.
Net Cash Flow
Any investment property that produces a profit after expenses.
Net Effective Income
Gross income after income taxes are deducted.
The amount of a person's assets after total liabilities have been deducted.
No Cash-Out Refinance
A new mortgage that covers all the costs and fees of an old mortgage, but doesn't contribute more than 1 percent cash to the new loan.
A mortgage that does not require documentation of income and other assets.
A mortgage clause that states that the mortgage cannot be assumed by another buyer without first receiving permission from the lender.
Any asset that cannot be quickly converted to cash.
Non-Recurring Closing Costs
Any one-time closing cost (i.e., title insurance).
Any person authorized by law to certify signatures and documents.
A legal document signed by a buyer to repay the stated amount of a loan by a certain date.
The interest rate set forth in a note.
Notice of Default
A legal document that states that a mortgagor is in default, and that further legal action is most likely forthcoming.
A monetary proposal for a property, usually from the buyer to seller.
A property open to be viewed by the general public.
Any property given to several real estate brokers to list simultaneously.
A right exercised by a buyer to keep an offer to purchase a property open for a certain amount of time.
Any agreement not made in writing. Oral agreements are not usually considered legally binding.
Original Principal Balance
The amount of principal on a mortgage before payments have begun.
See loan origination fee.
A property transaction in which the owner agrees to finance some or all of the purchase price.
Any officially designated plot of land.
The division of land between acrimonious co-owners. Also, an interior wall.
Any immediately obvious property defect (i.e., not having any windows).
The limit on the amount a monthly payment can increase on an adjustable rate mortgage.
The amount needed to pay-off a mortgage in full.
Interest that accrues daily.
Any item in a dwelling not considered a fixture.
An inspection of a property for the presence of common pests (i.e., mice, termites, roaches, etc.)
A property lot with a narrow strip connecting it to a nearby street.
Principal, Interest, Taxes and Insurance. These four items are combined to calculate a buyer's monthly housing expense.
A community originally developed with a certain plan in mind (i.e., a retirement community).
A map that outlines how a piece of land is to be developed into lots and streets.
A fee charged by a mortgage lender, typically at closing. Each point is worth one percent of a loan's total principal (i.e., a point on a $150,00 loan would $1,500).
Any mortgage institution that finances a loan with its own money and does not sell that mortgage on the secondary market. Thus, the mortgage remains in that institution's portfolio.
The point at which a property's buyer has closed a deal and received the keys to their new home.
Power of Attorney
A document stating that a certain individual is an attorney in fact, and may act on behalf of someone else.
A document stating that a buyer will be able to obtain a mortgage for a specified amount.
Expenses such as taxes that are paid before they are due.
Interest paid before it is due.
A financial penalty tacked onto mortgages that are paid off before they are due.
An assessment by a mortgage lender that a potential buyer will be able to secure a loan. Not considered as valuable as a pre-approval letter.
Any property that is sold before it is actually built.
The range a buyer is willing to pay for a property.
The best interest rate a lender can offer for a short-term loan.
The base amount of a mortgage, minus interest.
Principle of Conformity
The notion that the more a property conforms to those around it, the more likely it is to appreciate in value.
Principle of Progression
The notion that high-value properties will bring up lower-valued properties around them.
Principle of Regression
The notion that numerous low value properties will bring down the value of nearby higher-valued properties.
Private Mortgage Insurance (PMI)
See mortgage insurance.
The legal process to prove the validity of a will.
The sale of a property whose owner has died, with proceeds either split amongst surviving relatives or used to pay off any outstanding debts.
A note that promises payment of a specific amount on demand, which can be transferred much like a check.
The official boundary line of a property.
A local tax assessed on those who own property of approximately 1.5 percent of the property's value.
Property Tax Deduction
The federal tax law that permits property owners to deduct their property taxes from their income tax return.
The value of a property based on how much a buyer will pay for it at a specific point in time.
A percentage of purchase fees that must be paid by either the buyer or seller of a property at the closing, usually agreed upon beforehand.
A sale or auction open to the general public.
A list buyers make of property defects that need to be fixed before closing.
An agreement detailing the purchase price and other relevant details of a property transaction.
Purchase Money Mortgage (PMM)
A mortgage given from buyer to seller as part of a property's purchase price.
A ratio used by a mortgage lender to determine how much a buyer can afford to borrow.
A lawsuit brought to remove a lien or other claim from a property title.
A document releasing a person from any interest they may hold in a property.
A mortgage that includes a clause entitling a property buyer to a one-time interest reduction without having to go through the process of refinancing.
Land and anything physically attached to it (i.e., an apartment building, a barn, etc.).
Real Estate Agent
A person who has a state license to assist buyers and sellers in property transaction and is generally paid by commission.
Real Estate Attorney
Any attorney who specializes in real estate affairs.
Real Estate Broker
In essence, the Ph.D. of real estate agents. Brokers must pass much more stringent tests than agents, and are usually only consulted if the agent is encountering difficulty in a transaction. They generally also receive a portion of the commission made by the agents beneath them.
Real Estate Investment Trusts (REIT)
A trust, much like a mutual fund, that buys interest in properties rather than companies. Investors can buy shares of a REIT on most major stock exchanges.
Real Estate Settlement Procedures Act (RESPA)
The federal law that allows buyers and sellers to be aware of the various settlement charges associated with buying a property.
See real estate.
Any real estate broker who is a member of the National Association of Real Estate Brokers.
Any real estate agent or broker who is a member of the National Association of Real Estate Realtors.
A contract in which both signing parties promise to take an action for the other.
The cancellation of a mortgage or other contract by law or the mutual consent of those involved.
The transfer of a property's title once the buyer has completely paid off its mortgage.
The local public official in charge of keeping the records for all property transactions.
Filing a document with the proper government agency.
A fee charged by a real estate agent or mortgage lender to have a property's sale placed in the public record.
The illegal practice of denying a loan or insurance based on an applicant's ethnicity or current neighborhood.
Replacing an old mortgage or loan with one that has more favorable terms.
A provision in the federal Truth-in-Lending Act that requires a property buyer to be informed in writing of all the costs associated with acquiring credit.
A mortgage that includes money to repair a property in addition to the sale price.
A discounted rate given by a title insurance company when they have previously insured the same title within the past ten years.
An interest in a property that is put off until another interest is terminated.
The amount of principal remaining on a mortgage.
The amount of time left on a mortgage.
An insurance policy that covers the cost of replacing a renter's possessions.
Rent Loss Insurance
An insurance policy that covers the loss of rent income should a property be rendered uninhabitable.
A plan offered by mortgage lenders to assist delinquent borrowers in making their payments rather than taking them to court.
Replacement Reserve Fund
Money reserved by homeowners' associations to replace furniture and other items located in common areas.
The process of seizing a property by a mortgage lender when a buyer is extremely delinquent in payments.
The future value of a property, based on the current or future development of a neighborhood.
Funds set aside by homeowners' organizations to pay for any major future repair or improvement.
A mortgage or other loan that has been renegotiated with different terms.
Return on Investment (ROI)
The profit a property generates from its initial investment.
See home equity conversion mortgage.
A conveyance provision that allows the previous property owner to regain the property under certain circumstances.
Right of First Refusal
An agreement that a property owner will make with another party to allow them the chance to buy or rent a property before it is placed on the market.
Right to Recission
A provision in the Truth-in-Lending Act that allows a buyer to cancel a mortgage or other loan within three days of signing it.
The rights of an owner of property located adjacent to water.
A property arrangement in which the buyer agrees to lease back the property to the seller for a period of a time.
A contract that details the terms of a property sale.
Small Business Administration.
A mortgage taken out after a first mortgage that ranks second in payment priority.
The market used by mortgage lenders to sell mortgages as securities to increase their liquid assets.
A loan backed by collateral.
A section of property designated as collateral.
A real estate agent who represents sellers exclusively.
A market advantageous to sellers, with not many properties for sale and many buyers.
A company that collects mortgage payments and oversees escrow accounts.
See building restriction line.
A statement that documents exactly what has been paid and by whom.
Seventy-Two Hour Clause
If a buyer has to sell a property before being able to purchase a new one, the seller of the new property must furnish them with seventy-two hours notice should a better offer be presented. If the buyer cannot sell their old property by then, the seller can accept the better offer.
A mortgage that allows the lender or other specified party to take a portion of the buyer's profit (if any) once a property is sold.
A transaction in which more than two or more buyers purchase a property, with one co-owner using it as a residence and the other(s) using it as an investment.
An additional assessment imposed by a local government or homeowners' association to procure extra money for neighborhood improvements.
Special Deposit Account
A stipulation in a rehabilitation mortgage that a special account must be made in which part of the mortgage money is deposited. This account is later used to pay contractors as they repair the property.
Special Warranty Deed
A deed in which the seller of a property warrants that the property's title is unimpaired, but that he warranty that title before his ownership.
A legal action filed in order to insure the complete performance of a contract.
The amount of livable space in a property, measured in square feet.
Standard Payment Calculation
The calculation used to determine the monthly payments amounts so that a mortgage can be paid off in equal installments.
A property that falls in the low end of a buyer's price range.
Statute of Limitations
The time in which a law suit can be legally filed.
A mortgage that allows for a gradual increase in the interest rate over its first few years.
Dividing a piece of undeveloped land into lots and streets, with the eventual goal being to build properties on all the lots.
A situation in which a buyer takes control of a property title that has a lien on it, but they do not agree to be responsible for that lien.
Any mortgage that isn't the first mortgage.
Improving or refurbishing all or part of a property, not because it will increase the value, but because it's something the owner wants to do.
A fee charged by utility companies to begin service.
A lien placed on a property for non-payment of back taxes.
The sale of a property by the government in order to collect back taxes.
Any investment that defers or reduces taxes (i.e., real estate or individual retirement accounts.)
Any property whose interior needs to be significantly rebuilt.
A mortgage that has a low initial interest rate in order to entice property buyers.
Tenants by the Entirety
Usually refers to a husband and wife living in the same property. If one spouse dies, the surviving spouse inherits the property. There also needs to be a consensus should the property have to be sold to pay off one partner's debts.
Tenants in Common
Two or more people who own a property without an established right of survivorship. Occasionally, if one partner dies, their interest may not be given to the co-owner(s).
An estate with a will.
A man who has drawn up a last will and testament.
A woman who has drawn up a last will and testament.
A lending institution that originates a mortgage for another institution, who then grants the mortgage to a buyer.
The purchase of only a percentage of a property. Thus, the buyer may only occupy that property for a particular period of time. Generally used with vacation homes.
A legal document that provides proof of property ownership.
An institution that ensures a property title is free from liens and other claims, and also provides title insurance.
An insurance policy that protects a buyer should someone else claim title to a property.
A possible danger in transferring a property title from seller to buyer.
An examination of local records to provide proof positive of a title's owner, and to be certain that there are no liens or other claims against the property.
A real estate agent or broker who sells a large number of properties.
Total Expense Ratio
Percentage of monthly debt payments versus gross income.
Assets given to a seller in lieu of, or in addition to, cash.
Purchasing a property that is less expensive than your current one.
Purchasing a property that is more expensive than your current one.
Transfer of Ownership
The legal transfer of a property from seller to buyer.
A tax assessed on a transfer of ownership, usually by local government.
A security issued and backed by the U.S. Treasury Department.
One possible index used to determine the interest rate on adjustable rate mortgages.
A right to a property held by another, either written or implied.
An account used by a real estate agent, broker, or escrow agent to hold funds for either a property seller or buyer.
A person who has holds a trust.
A federal law that requires a mortgage lender to disclose the annual percentage rate to a prospective buyer after they have applied for the loan.
A mortgage that begins with one interest rate for the first five to seven years, then is adjusted to reflect current market conditions for the remainder of the loan.
A process by which mortgage lenders assess the risk of a potential property buyer, and adjust their loan terms accordingly.
A person who asserts a claim to a property or estate after its owner has died intestate.
An unidentified spouse who may claim the right to a property.
A deed that has been transferred from seller to buyer without being noted in the public records.
A mortgage not backed by collateral.
Charging interest on a mortgage or other loan higher than is allowed by law.
A Department of Veterans Affairs program that allows qualified veterans to secure a mortgage with little or no down payment.
An interest rate that is subject to fluctuation.
Variable Rate Mortgage (VRM)
See adjustable rate mortgage.
Verification of Deposit (VOD)
A document signed by a potential property buyer's bank that verifies that the buyer's account and balance.
Verification of Employment (VOE)
A document signed by a potential property buyer's employer that verifies the buyer's employment and salary.
A lien willingly taken on by a property owner.
The voluntary relinquishment of a right.
The final examination of a property by its buyer before closing.
A legal document assuring a specified action in the future.
A deed that promises a property's title is free of liens or other claims.
A deed that has been improperly recorded.
A legal document that specifies how a person's estate is to be handled after their death.
A mortgage that contains not only the amount to be loaned to purchase a property, but also the remaining balance of that property's previous mortgage.
The local regulation of land usage.
A one-time change in an area's zoning law.