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A B C D E F G H I J L M N O P Q R T U V W Z
ADJUSTABLE RATE MORTGAGE (ARM)
Interest rates on this type of mortgage are periodically adjusted up or down depending on a specified financial index.
AMORTIZATION
A method of equalizing the monthly mortgage payments over the life of the loan, even though the proportion of principal to interest changes over time. In the early part of the loan, the principal repayment is very low, while the interest payment is very high. At the end of the loan, the relationship is reversed.
ANNUAL PERCENTAGE RATE
The actual finance charge for a loan, including points and fees, in addition to the stated interest rate.
APPRAISAL
An expert opinion of the value or worth of a property.
ASSESSED VALUE
The value placed on property by a municipality for purposes of levying taxes. It may differ widely from appraised or market value.
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BALLOON PAYMENT
A large principal payment due all at once at the end of some loan terms.
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CAP
A limit on how much the interest rate can change in an adjustable rate mortgage.
CERTIFICATE OF TITLE
A document, signed by a title examiner, stating that a seller to buyer and documents are recorded.
CLOSING
The deed to property is legally transferred from seller to buyer and documents are recorded.
CLOSING SETTLEMENT
The written statement provided by the escrow company to each of the parties to the loan transaction showing the amounts received and the amounts paid out for various items.
COMMISSION
A fee (usually a percentage of the total transaction) paid to an agent or broker for services performed.
COMPARATIVE MARKET ANALYSIS (CMA)
A survey of attributes and selling process of comparable homes on the market or recently sold; used to help determine a correct pricing strategy for a seller's property.
CONTINGENCY
A condition in a contract that must be met for the contract to be binding.
CONTRACT
A binding legal agreement between two or more parties that outlines the conditions for the exchange of value (for example: money exchanged for title to property).
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DEED
A legal document that formally conveys ownership of the property from seller to buyer.
DOWN PAYMENT
A percentage of the purchase price that the buyer must pay in cash and may not borrow from a lender.
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EQUITY
The value of the property actually owned by the homeowner: purchase price, plus appreciation, plus improvements, less mortgage and liens.
ESCROW
A fund or account held by a third-party custodian until conditions of a contract are met.
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FIXED RATE MORTGAGE
Interest rates on this type of mortgage remain the same over the life of the loan. Compare to "adjustable rate mortgage."
FIXTURE
A recognizable entity (such as a kitchen cabinet, drape or light fixture) that is permanently attached to property and belongs to the property when it is sold.
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GOOD AND MARKETABLE TITLE
Ownership of a property which is free of competing claims and interests.
GOOD FAITH ESTIMATE
A written statement of the anticipated costs of completing a loan transaction which must be provided by a lender to a borrower within 72 hours of the submission of the loan application.
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HAZARD INSURANCE
Compensates for property damage from specified hazards such as fire and wind.
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INTEREST
The cost of borrowing money, usually expressed as a percentage rate.
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JUDGMENT LIEN
A general lien which applies to all property owned by a judgment debtor located in the county where the judgment is recorded.
JOINT TENANCY
A way in which two or more people may hold title to property together. Owning as joint tenants means each owner has an equal right to the entire property, that none of the owners may sell, bequeath or encumber their portion of the property without the consent of the other owners and that, in the event of the death of one of the owners, the surviving owners automatically retain title to the entire property by "Right of Survivorship". Compare with "tenants in common".
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LIEN
A security claim on property until a debt is satisfied.
LISTING CONTRACT
An agreement whereby an owner engages a real estate company for a specified period of time to sell property, for which, upon sale, the agent receives commission.
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MARKET VALUE
The price that is established by present economic conditions, location and general trends.
MARKET PRICE
The actual price at which property is sold.
MORTGAGE
Security claim by a lender against property until the debt is paid.
MULTIPLE LISTING SERVICE (MLS)
A system that provides to its members detailed information about properties for sale
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NOTE
A written instrument of indebtedness, promising to pay a certain person a particular sum of money upon stated terms.
NOTICE
Written warning to another of a person's intention to do something or take some (legal) action.
NOTICE OF DEFAULT
The written notice sent by a lender to a borrower stating that the borrower has not met his obligations under the loan contract and the lender may take legal action to enforce the agreement.
NOVATION
The substitution of a new person for one of the parties to an agreement, on consent of all people involved.
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ORIGINATION FEE
An application fee(s) for processing a proposed mortgage loan.
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PITI
Principle, interest, taxes and insurance, forming the basis for monthly mortgage payments.
POINT
One percent of the loan principle. It's charged in addition to interest and fees.
PREPAYMENT PENALTY
A fee paid by a borrower who pays off the loan before it is due.
PRINCIPLE
One of the parties to a contract; or the amount of money borrowed, for which interest is charged.
PROBATE
Divide or assess proportionately.
PURCHASE & SALE AGREEMENT
See "Contract"
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QUIT CLAIM DEED
A conveyance which releases any interest the conveying party may have in a property without any warranty as to that party's claim.
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REALTOR
A real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.
REAL ESTATE AGENT
A person licensed to negotiate and transact the sale of real estate.
REAL ESTATE BROKER
A salesperson that has enhanced their professional skills with additional industry education. A real estate broker helps buy and sell homes. A salesperson meet specific registration requirements and demonstrate a high level of professional conduct before achieving the status of a real estate broker.
REAL ESTATE SALES PROFESSIONAL
See "real estate agent" or "real estate broker".
RATE CAP
A limit of how much an interest rate can change in a variable of adjustable rate mortgage either in a given period or over the life of the loan.
RECORDING
The act of entering title instruments in the public records, thus giving notice to any interested parties of the existence of the instrument.
REFINANCE
To replace an existing and perhaps mature mortgage with a new mortgage on the same property. New mortgage may have different terms than the old one.
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TITLE
A document that indicates ownership of a specific property.
TITLE SEARCH
A detailed examination of the entire document history of a property title to make sure that there are no legal encumbrances.
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UNIT
A single dwelling within a larger complex: especially in condominium projects where the unit is the portion of the complex which is for the exclusive use of the owner of the unit.
UNENCUMBERED PROPERTY
Land that has no claims, liens or mortgages registered against it.
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VA LOAN
A loan on below market terms guaranteed by the Department of Veterans Affairs, given to former members of the armed forces.
VACANT LAND
Land that may be improved and developed but is not currently in use.
VARIABLE INTEREST RATE
An interest rate that may change according to change in the index rate. See "adjustable interest rate".
VOLUNTARY LIEN
A claim that is recorded/registered with consent of the owner.
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WAIVER
The voluntary giving up of a right or claim. A document to evidence such a relinquishment.
WASTE
Allowing or causing a property to suffer damage or undue wear and tear to the detriment of another person who has an interest in or claim to the property.
WETLANDS
Lands restricted for development as a result of their proximity to bodies of water and the fact that they are occasionally or often flooded. May also be environmentally sensitive.
WILL
A written statement of a person's wishes for the disposition of that person's estate after their death.
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ZONE
An area of a municipality to which certain rules, regulations, bylaws or ordinances apply.
ZONING BYLAW
A rule passed by the local government which regulates the use of property according to its location within the municipality, placement of structures on the property, maximum floor area, minimum lot area, minimum floor-to-lot area ratios, etc.
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