REAL ESTATE GLOSSARY
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
- ACCELERATION CLAUSE
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- ACCELERATED DEPRECIATION
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- ACRE FOOT
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- ADDENDUM
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- ADJUSTABLE RATE MORTGAGE
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- ADVERSE POSSESSION
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- A-FRAME DESIGN
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- AGENCY
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- ALIENATION CLAUSE
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- AMORTIZATION
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- ANNUAL PERCENTAGE RATE (APR)
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- APPRAISAL
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- AS IS CONDITION
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- ASSESSED VALUE
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- BACK UP OFFER
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- BALLOON FRAME CONSTRUCTION
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- BALLOON PAYMENT
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- BANKRUPTCY
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- BAY WINDOW
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- BILL OF SALE
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- BUILT INS
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- BUNDLE OF RIGHTS
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- BUY DOWN MORTGAGE
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- BUYERS MARKET
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- CAPITAL GAINS TAX
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- CAR PORT
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- CASEMENT
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- CATHEDRAL CEILING
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- CERTIFICATE OF OCCUPANCY
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- CHAIN OF TITLE
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- CHATTEL
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- CLOSING
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- CLOUD ON TITLE
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- COMMON AREA
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- COMPARATIVE MARKETING ANALYSIS (CMA)
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- CONDEMNATION
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- CONTINGENCY
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- CUL DE SAC
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- CURB APPEAL
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- DEED OF TRUST
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- DEFAULT
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- DEPRECATION
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- DISCLOSURE
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- DISCOUNT POINTS
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- DISTRESSED PROPERTIES
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- DOWNPAYMENT
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- DUE ON SALE CLAUSE
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- DUPLEX
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- EARNEST MONEY
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- EARTHQUAKE INSURANCE
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- EASMENT
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- EMINENT DOMAIN
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- ENCROACHMENT
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- ESCROW
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- EVICTION
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- EXECUTOR
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- FANNIE MAE
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- FEDERAL HOUSING ADMINISTRATION (FHA)
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- FIRST MORTGAGE
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- FIXER UPPER
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- FIXTURE
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- FLASHING
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- FOREBEARANCE
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- FORECLOSURE
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- FOR SALE BY OWNER (FSBO)
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- FREDDIE MAC
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- FULLY AMORTIZED RATE MORTGAGE
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- GABLE ROOF
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- GEORGIAN STYLE
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- GOOD FAITH ESTIMATE
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- GRACE PERIOD
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- GRADUATED PAYMENT MORTGAGE (GPM)
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- GRANTEE
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- GRANTOR
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- GROSS INCOME
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- GROUP HOME
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- Hazard Insurance
- A contract between purchaser and an insurer, to compensate the insured for loss of property due to hazards, damage, hail, fire, etc.
- HOA
- Home owners association
- Home Equity Loan
- A fixed or adjustable rate loan obtained for a variety of purposes, secured by the equity in your home. Interest paid is usually tax-deductible. Often used for home improvement or freeing of equity for investment in other real estate or investment.
- Home Warranty
- A service contract that covers a major housing system--for example, plumbing or electrical wiring--for a set period of time from the date a house is sold. The warranty guarantees repairs to the covered system and is renewable. A basic, one year Buyer's warranty costs $295 to $350 with additional coverage available for garage door openers, spas, swimming pools, sprinkler system and other appliances.
- Homeowners' Insurance
- A type of insurance policy designed to protect homeowners from financial losses related the ownership of real property. In addition to covering losses due to vandalism, fire, hail, etc. (hazard insurance), most policies also provide theft and liability coverage. Flood related damage requires a separate flood insurance policy or rider.
- Implied Easement
- When the owner of two or more adjacent properties sells a part thereof, he or she grants by implication all those apparent and visible easements which are necessary for the reasonable use of the property granted.
- Impound Account
- A trust account established to set aside funds for future needs relating to a parcel of real property. Many mortgage lenders require an impound account to cover future payments for taxes, assessments, private mortgage insurance and insurance in order to protect their security from defaults and tax liens. In the case of FHA loans, many lenders require a tax reserve of six months and an insurance reserve of one year. When the property is sold and the buyer assumes the seller's mortgage, the lender does not usually return the escrow account balance to the owner. The sum remains with the lender, and it is the responsibility of the buyer and seller to prorate the balance between them. Impound accounts are required for FHA loans, and although VA regulations do not require an impound account for taxes and insurance premiums on GI loans, many lenders customarily require that such accounts be established and maintained.
- Improvement
- Any structure, usually privately owned, erected on a site to enhance the value of the property--for example, building a fence or a driveway. A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street or sewer.
- Intestate
- Dying without leaving a legal will.
- Joint Tenancy
- A form of property ownership by two or more persons in which the joint tenants have one and the same interest, arising by one and the same conveyance, commencing atone and the same time and held by one and the same possession.
- Judicial Foreclosure
- A method of foreclosing upon real property by means of a court supervised sale. After an appraisal, the court determines an upset price below which no bids to purchase will be accepted.
- Junior Mortgage
- A mortgage which is subordinate in right or lien priority to an existing mortgage on the same realty, such as a second mortgage.
- KIOSK
- A small structure usually constructed of wood with one or more sides open and typically used as a newsstand, photo film center or ice cream stand.
- Leasehold Estate
- A tenant's right to occupy real estate during the term of the lease. This is a personal property interest.
- Lessee
- One who contracts to rent, occupy, and use property under a lease agreement; a tenant.
- Lessor
- An owner who enters into a lease agreement with a tenant; a landlord.
- Lien
- A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation. Ex: judgments, taxes, mortgages, deeds of trust, etc.
- Loan-To-Value Ratio
- The amount of money borrowed in relation to the total market value of a property. Expressed as the loan amount divided by the property value.
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- Mechanics Lien
- A lien created by statute which exists against real property in favor of persons who have performed work or furnished materials for the improvement of the real property.
- Metes and Bounds
- A term used in describing the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles. Metes (length or measurements) and Bounds (boundaries).
- Mile
- 5,280 feet.
- Negative Amortization
- Paying less than the actual amount owed on a loan will result in an increase in loan balance. Negative amortization frequently occurs in Pay Option ARMS.
- Nonconforming Loan
- Also known as a Jumbo Loan. This refers to mortgage loan that exceeds $417,000 (2006) and does not conform to FNMA and FHLMC guidelines. These loans usually carry higher interest rates.
- Notary Public
- A public officer who is authorized to witness and verify certain documents (e.g., contracts, deeds, mortgages). Also, an affidavit may be sworn before this public officer.
- Option
- A right given to purchase or lease a property upon specified terms within a specified time. If the right is not exercised, the option holder is not subject to liability for damages. If the holder of the option exercises it, the grantor of option must perform the option's requirements.
- Partially Amortized Mortgage Loan
- The payments do not repay the loan over its term and thus a lump sum (balloon) is required to repay the loan.
- Participation Mortgage
- A loan secured by real property, with a stated interest
- Percentage Lease
- A lease of property in which the rent is based upon the percentage of the sales volume made on the specific premises. There is usually a clause for a minimum rent as well.
- Personal Property
- Any property which is not real property. Examples include furniture, appliances, clothing, jewelry, artwork, etc.
- Points
- 1 point is equal to 1% of the loan value, paid at closing. Points can be loan origination fees or "discount points" which reduce the interest rate of the loan (you are actually paying a finance charge up front). When a lender, for example, quotes a rate of 8 1/2% with 1 + 1 points, 1 point is for the origination fee and 1 point is for the discount fee.
- Power of Attorney
- A written instrument duly signed and executed by an individual which authorizes an agent to act on his behalf to the extent indicated in the document.
- Prequalification
- The first stage of a mortgage application where the lender will run a basic credit report and determine your debt to income ratio in order to see how much mortgage you qualify for.
- PMI (Private Mortgage Insurance)
- Required on virtually all conventional loans with less than 20% downpayment. Although the payments for PMI are included in your mortgage payment, it protects the lender should you default on the loan. On FHA loans, you will pay a MIP (Mortgage Insurance Premium) which accomplishes the same purpose.
- Real Property
- Land and any permanent fixtures on it, including buildings, trees and minerals.
- Reconveyance
- When a borrower completely pays off the mortgage, the property is reconveyed to them from the lender.
- Refinancing
- The process of replacing an older loan with a new mortgage that has better terms.
- Sale and Leaseback
- A transaction in which, typically, an owner sells his improved property and as part of the same transaction signs a long-term lease and remains in possession.
- Tenants In Common
- Two or more owners who share interest in a specific property.
- Title
- A legal document that provides evidence of a person's right to or ownership of a property.
- Title Search
- Checks all the records relating to the property to determine whether the seller can sell the property, and can do so free of liens.
- Underwriting
- The process of verifying data and approving a loan.
- Unlawful Detainer Lawsuit
- A lawsuit that a landlord must file and win before he or she can evict a tenant (also called an "eviction" lawsuit).
- Variable Interest Rate
- A fluctuating interest rate that can go up or down depending on the going market rate.
- Wrap-Around Mortgage
- A second mortgage, which is subordinate to but includes the face value of the first mortgage.
