Acceleration Clause
A provision in a mortgage note that gives a lender the right to demand repayment of the entire balance of the loan under certain conditions, such as the failure to make timely payments or a transfer of the property.
Acknowledgement

1. Acknowledgement (creative arts), a statement of gratitude for assistance in producing a work.
2. Acknowledgement (law), a declaration or avowal of one’s own act, to give it legal validity.
3. Acknowledgement (social), a written thank you note expressing gratitude for gifts, assistance, or expressions of sympathy.

Abstract of title
An abstract of title is the condensed history of title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.
Acre
An acre is the name of a unit of area.
Additional Principal Payment
An amount paid by a borrower of more than the scheduled principal amount due. This type of payment reduces the remaining balance and shortens the term of the loan. Also called a “principal curtailment.”
Ad valorem Tax
An ad-valorem tax is a tax based on the assessed value of real estate or personal property.
Adjustable rate mortgage
An adjustable rate mortgage or variable rate mortgage is a loan secured on a property (house) whose interest rate and therefore monthly repayment vary over time.
Adjustment Date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).
Adjustment Period
For an adjustable rate mortgage, the time period between interest rate change dates, as stated in the mortgage note

Administration

1. In business, administration consists of the performance or management of transactions and other matters, and the making and implementing of major decisions.

1. Another sense involves the administration (giving or tendering) of the sacraments, justice, oaths, medicines etc.
2. 
   In some contexts, the term administration also refers to the executive branch under a specific president (or sometimes governor, mayor, or other local executive).

 

1. A system administrator, or sysadmin, is a person employed to maintain and operate a computer system or network or a company or other organization. System administrators are often members of an information technology department.

Adverse Possession
In real estate common law, adverse possession is a means of acquiring title to another’s real property without compensation, by, as the name suggests, holding the property in a manner that conflicts with the true owner’s rights.

Affordability Analysis
An estimation of a borrower’s ability to afford the purchase of a home and/or the payment on a loan. An affordability analysis may consider income, liabilities, the type of mortgage, the loan amount, purchase price, the expected closing costs, and other factors.

Agency real estate
A real estate broker is a party who acts an intermediary between sellers and buyers of real estate and attempts to find sellers who wish to sell and buyers who wish to buy.

Allodial title
Allodial title is a concept in some systems of property law. It describes a situation where real property (land, buildings, and fixtures) is owned free and clear of any encumbrances, including liens, mortgages and tax obligations. Allodial title is inalienable, in that it cannot be taken by any operation of law for any reason whatsoever.

Amortization or amortisation may refer to:
The gradual reduction of the mortgage debt through regularly scheduled payments over the term of the loan.

Amortization (business), the allocation of a lump sum amount to different time periods.
Amortized analysis, a technique used in analyzing the execution cost of algorithms.

Amortization Schedule
A time table for payment of a mortgage loan. An amortization schedule shows: the amount of each payment; the amount to be applied to principal and interest; and the remaining principal balance after each payment is made.

Apartment
An apartment is a self-contained housing unit that occupies only part of a building. Apartments may be owned (by an owner-occupier) or rented (by tenants).

Appraisal
A written estimate or opinion of a property’s value prepared by a qualified appraiser.

Appreciation
An increase in the value of an item (e.g., the increase in the market value of real estate).

Argus
Argus is a financial analysis program used in the commercial real estate industry. It is often used with Microsoft Excel to forecast cash flows and value for real estate properties.

Arrears
Arrears, or arrearages is a legal term for the type of debt accrued after missing an expected payment. Arrears accrue from the date upon the first missed payment. The term is often used to describe being late with rent, royalties (or other contractual payments), child support, or other legal financial obligation. The word is also used to describe entitlements earned, as in a job wage or salary.

Assessment
Assessment is the process of documenting, usually in measurable terms, knowledge, skills, attitudes and beliefs. This article covers educational assessment including the work of institutional researchers, but the term applies to other fields as well including health and finance.

Assessed Value
Typically the value placed on property for the purpose of taxation.

Assessor
A public official who establishes the value of a property for taxation purposes.

Asset
Anything of monetary value that is owned by a person or company. Assets include real property, personal property, stocks, mutual funds, etc.

Assignment of mortgage
A document evidencing the transfer of ownership of a mortgage from one person to another.

 

Assumption of mortgage
Assumption of mortgage is the purchase of mortgaged property whereby the buyer accepts liability for the debts that continues to exist. The seller remains liable to the mortgage lender (whether the lender is a commercial bank, thrift, credit union, mortgage banker or mortgage broker) unless the lender agrees to release him

Assumption Fee
A fee a lender charges a buyer who will assume the seller’s existing mortgage.

Automated Underwriting
An automated process performed by a technology application that streamlines the processing of loan applications and provides a recommendation to the lender to approve the loan or refer it for manual underwriting.

Balance Sheet
A financial statement that shows assets, liabilities, and net worth as of a specific date.
Balloon Mortgage
A mortgage in which the borrower’s monthly payments are amortized over a longer period than the actual term of the mortgage. As a result, at the end of the loan term, the borrower must pay off the remaining balance with a single lump sum payment or refinance the loan.
Balloon Payment
The final lump sum payment that is made at the maturity date of a balloon mortgage.
Bankruptcy
A legal proceeding that allows debtors to eliminate or restructure debts when they have financial difficulties.
Before-Tax Income
Income before tax is deducted. Also known as “gross income.”
Biweekly Payment Mortgage
A mortgage with payments due every two weeks (instead of monthly).
Bona fide
In good faith, without fraud.
Bridge Loan
A short-term loan secured by the borrower’s current home (which is usually for sale) that allows the proceeds to be used for building or closing on a new house before the current home is sold. Also known as a “swing loan.”
Broker
An individual or firm that acts as an agent between providers and users of products or services, such as a mortgage broker or real estate broker.
Buyer brokerage
Buyer Brokerage (or Buyer agency as it is also known) is the practice of real estate brokers (and their agents) representing a buyer in a real estate transaction. In most states, until the 1990s, buyers who worked with an agent of a real estate broker in finding a house were customers of the brokerage, since the broker represented only sellers.
Building Code
Local regulations that set forth the standards and requirements for the construction, maintenance and occupancy of buildings. The codes are designed to provide for the safety, health and welfare of the public.
Bundle of rights
The bundle of rights theory is a common way of explaining how rights in property are held. It is a theory and teaching tool, and thus is not subject to being either true or false - rather it is a means of organizing a large set of confusing and sometimes contradictory data.
Buy down
An arrangement whereby the property developer or another third party provides an interest subsidy to reduce the borrower’s monthly payments typically in the early years of the loan.

Cap
For an adjustable-rate mortgage (ARM), a limitation on the amount the interest rate or mortgage payments may increase or decrease.
Capital gain
In finance, a capital gain is profit that results from the appreciation of a capital asset from its purchase price. If the price of the capital asset has declined instead of appreciated, this is called a capital loss. Capital gains occur in both real assets, such as property, as well as financial assets, such as stocks r bonds.
Capitalization Rate
Capitalization Rate (or “Cap Rate”) is a measure of the ratio between the net income produced by an asset (usually real estate) and its capital cost (the original price paid to own the asset). The rate is calculated in a simple fashion as follows:
Net Income / Capital Cost = Capitalization Rate.
Cash-out Refinance
A refinance transaction in which the borrower receives additional funds over and above the amount needed to repay the existing mortgage, closing costs, points, and any subordinate liens.
Certificate of Deposit
A document issued by a bank or other financial institution that is evidence of a deposit, with the issuer’s promise to return the deposit plus earnings at a specified interest rate within a specified time period.
Chain of title
A chain of title is the sequence of historical transfers of title to a property. The “chain” runs from the present owner back to the original owner of the property. In situations where documentation of ownership is important, it is often necessary to reconstruct the chain of title. To facilitate this, a record of title documents may be maintained by a registry office or civic law notary.
Change Orders
A change in the original construction plans ordered by the property owner or general contractor.
Clear Title
Ownership that is free of liens, defects, or other legal encumbrances.
Cloud of title
The term Cloud on title refers to a deed (title to real property) which has been recorded but is in some way encumbered so it cannot be transferred until the problem has been resolved.
Closing
The process of completing a financial transaction. For mortgage loans, the process of signing mortgage documents, disbursing funds, and, if applicable, transferring ownership of the property. In some jurisdictions, closing is referred to as “escrow,” a process by which a buyer and seller deliver legal documents to a third party who completes the transaction in accordance with their instructions.
Closing cost
Real property in most jurisdictions is conveyed from the seller to the buyer through a real estate contract. The point in time at which the contract is actually executed and the title to the property is conveyed to the buyer is known as the “closing”. It is common for a variety of costs associated with the transaction (above and beyond the price of the property itself) to be incurred by either the buyer or the seller. These costs are typically paid at the closing, and are known as closing costs.
Closing Agent
The person or entity that coordinates the various closing activities, including the preparation and recordation of closing documents and the disbursement of funds. (May be referred to as an escrow agent or settlement agent in some jurisdictions.) Typically the closing is conducted by title companies, escrow companies or attorneys.
Closing Date
The date on which the sale of a property is to be finalized and a loan transaction completed. Often, a real estate sales professional coordinates the setting of this date with the buyer, the seller, the closing agent, and the lender.
Collateral
An asset that is pledged as security for a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan agreement.
Collection
The efforts a lender takes to collect past due payments.
Commercial property
The term commercial property includes business property (e.g. office buildings), industrial property, medical centers, hotels, malls, retail stores.
Commercial property is intended to be operated at a profit, either from capital gain or rental income.
Community property
Community property is a marital property regime that originated in civic law jurisdictions, and is now also found in some common law jurisdictions.
Comparables
Properties those are similar to the subject property. In real estate, a real estate agent checks the selling prices of comparables to help determine the value of a property he is appraising.
Commission
The fee charged for services performed, usually based on a percentage of the price of the items sold (such as the fee a real estate agent earns on the sale of a house).
Commitment Letter
A binding offer by a lender to loan money at a future date subject to the borrower’s compliance with stated conditions.
Common Areas
Those portions of a building, land, or improvements and amenities owned by a planned unit development (PUD) or condominium project’s homeowners’ association (or a cooperative project’s cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.
Condominium
A real estate project in which each unit owner holds title to an individual unit in a building, and an undivided interest in the common areas.
Construction Loan
A loan for financing the cost of construction or improvements to a property; the lender disburses payments to the builder at periodic intervals during construction.
Contingency
A condition that must be met before a contract is legally binding. For example, home purchasers often include a home inspection contingency; the sales contract is not binding unless and until the purchaser has the home inspected.
Contract
Real estate contract
A real estate contract is a contract for the purchase/sale, exchange, or other conveyance of real estate between parties. Real estate called leasehold estate is actually a rental of real property such as an apartment, and leases(rental contracts) cover such rentals since they typically do not result in recordable deeds. Freeehold (”More permanent”) conveyances of real estate are covered by real estate contracts, including conveying fee simple title, life estates, remainder estates, and freehold easements. Real estate contracts are typically bilateral contracts (i. e., agreed to by two parties) and should have the legal requirements specified by contract law in general and should also be in writing to be enforceable.
Conveyancing
Conveyancing is the act of transferring the legal title in a property from one person to another. The buyer must ensure that he or she obtains a good and marketable ‘title’ to the land; i.e., that the person selling the house actually has the right to sell it and there is no factor which would impede a mortgage or re-sale.
Conventional Mortgage
A mortgage loan that is not insured or guaranteed by the federal government or one of its agencies, such as FHA, VA or RHS. Contrast with “Government Mortgage.”
Co-operative Apartment
A cooperative (also co-operative or co-op) is a group of persons who join together or co-operate, to carry on an economic activity of mutual benefits.
Concurrent estate
A concurrent estate or co-tenancy is a concept in property law, particularly derived from the common law of real property, which describes the various ways in which property can be owned by more than one person at a given time.
Conversion Option
A provision of some adjustable-rate mortgage (ARM) loans that allows the borrower to change the ARM to a fixed-rate mortgage at specified times after loan origination.
Cooperative (Co-op) Project
A project in which a corporation holds title to a residential property and sells shares to individual buyers, who then receive a proprietary lease as their title.
Cost of Funds Index (COFI)
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the weighted monthly average cost of deposits, advances, and other borrowings of members of the Federal Home Loan Bank of San Francisco.
Credit Bureau
An independent agency that gathers and maintains information on the debts and repayment records of individuals and businesses.
Credit History
A record of an individual’s debts and repayment record. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.
Credit Life Insurance
A type of insurance that pays off a specific amount of debt or a specified credit account if the borrower dies while the policy is in force.
Credit Report
A document provided by a credit reporting agency containing information about an individual’s previous mortgage history, bank loans, credit cards, and public records dealing with financial matters.
Credit Score
A numerical value that ranks a borrower’s credit risk at a given point in time based on a statistical evaluation of information in the individual’s credit file that has been proven to be predictive of loan performance.
Creditor
A person to whom money is owed.

Debt
An amount owed to another.
Debt-to-Income Ratio
The relationship between a borrower’s total monthly debt payments (including proposed housing expenses) and his or her gross monthly income; this calculation is used in determining the mortgage amount that a borrower qualifies for.
Deed
The legal document conveying title to a property (i.e., transferring the ownership of real property from one party to another.)
Deed-in-Lieu of Foreclosure
The transfer of title from a borrower to the lender to satisfy the mortgage debt and avoid foreclosure. Also called a “voluntary conveyance.”
Deed of Trust
A legal document that conveys title to real estate to a disinterested third party (a “trustee”) who holds the title until the borrower has repaid the debt. In some states, this document is used in place of a mortgage
Default
The failure to make a scheduled payment or otherwise comply with the terms of a mortgage loan or other contract.
Depreciation
Depreciation is a reduction in the value of a currency in floating exchange rate.
Delinquency
Failure to make a payment when it is due. The condition of a loan when a scheduled payment has not been received by the due date, but generally used to refer to a loan for which payment is 30 or more days past due.
Discount Point
A fee paid by the borrower at closing to reduce the interest rate. A point equals 1 percent of the loan amount.
Down Payment
The amount of cash a buyer puts toward a purchase.
Double closing
A double closing is the simultaneous purchase and sale of a real estate property involving three parties: the original seller, an investor (middleman), and the final buyer.
Due-on-sale Clause
A provision in a mortgage that allows the lender to demand repayment in full of the outstanding balance if the property securing the mortgage is sold.

Earnest Payment
An earnest payment (sometimes called earnest money or simply earnest) is a deposit towards a purchase made by a buyer to demonstrate that the buyer is serious (earnest) about wanting to complete the purchase. When a buyer makes an offer to buy residential real estate, s/he generally signs a contract and pays $500 to $1000 in earnest money.
Easement
A right to the use of, or access to, land owned by another.
Employer-Assisted Housing
A program in which companies assist their employees in purchasing homes by providing assistance with the down payment, closing costs, or monthly payments.
Encroachment
The intrusion onto another’s property without right or permission.
Encumbrance
Any claim on a property, such as a lien, mortgage or easement.
Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders to make credit equally available without regard to the applicant’s race, color, religion, national origin, age, sex, or marital status; the fact that all or part of the applicant’s income is derived from a public assistance program; or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.
Equity
The owner’s interest in a property, calculated as the current fair market value of the property less the amount of existing liens.
Escrow
Escrow is a legal arrangement whereby an asset (often money, but sometimes other property such as art, a deed of title, website, or software source code) is delivered to a third party (called an escrow agent) to be held in trust or otherwise pending a contingency or the fulfillment of a condition or conditions in a contract.
Escrow Account
An account that a mortgage servicer establishes on behalf of a borrower to pay taxes, insurance premiums, or other charges when they are due. Sometimes referred to as an “impound” or “reserve” account.
Escrow Analysis
The accounting that a mortgage servicer performs to determine the appropriate balances for the escrow account, compute the borrower’s monthly escrow payments, and determine whether any shortages, surpluses or deficiencies exist in the account.
Escrow Payment
Escrow payment is the common term referring to the portion of a motgage payment that is designated to pay for real property taxes and hazard insurance.
Eviction
The legal act of removing someone from real property.
Estate (Law)
At common law, an estate is the totality of the legal rights, interests, entitlements and obligations attaching to property. In the context of wills and probate, it refers to the totality of the property which the deceased owned or in which some interest was held. It may also refer to an estate in land.
Estate for years
Leasehold’ is a form of property tenure where one party buys the right to occupy land or a building for a given length of time. A lease is a legal estate, leasehold estate can be bought and sold on the open market and differs from a tenancy where a property is let on a periodic basis such as weekly or monthly.
Exclusive Listing
A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.
Executor
A person named in a will and approved by a probate court to administer the deposition of an estate in accordance with the instructions of the will.

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by credit reporting agencies and specifies procedures for challenging errors on a credit record.
Fair Market Value
The price at which property would be transferred between a willing buyer and willing seller, each of whom has a reasonable knowledge of all pertinent facts and is not under any compulsion to buy or sell.
Fee Simple
Fee simple, also known as fee simple absolute, is an estate in land in common law. It is the most common way real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved for governments.
First Mortgage
A mortgage that is the primary lien against a property.
First Time Home Buyer
A person with no ownership interest in a principal residence during the three-year period preceding the purchase of the security property.
Fixed-Period Adjustable-Rate Mortgage
An adjustable-rate mortgage (ARM) that offers a fixed rate for an initial period, typically three to ten years, and then adjusts every six months, annually, or at another specified period, for the remainder of the term.
Fixed-Rate Mortgage (FRM)
A mortgage loan in which the interest rate does not change during the entire term.
Flood Certification Fee
A fee charged by independent mapping firms to identify properties located in areas designated as flood zones.
Flood Insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood hazard zones.
Foreclosure
The legal process by which a property that is mortgaged as security for a loan may be sold and the proceeds of the sale applied to the mortgage debt. A foreclosure occurs when the loan becomes delinquent because payments have not been made or when the borrower is in default for a reason other than the failure to make timely mortgage payments.
Forfeiture
The loss of money, property, rights, or privileges due to a breach of a legal obligation.
Fully Amortized Mortgage
A mortgage in which the monthly payments are designed to retire the obligation at the end of the mortgage term.

General Contractor
A person who oversees a home improvement or construction project and handles various aspects such as scheduling workers and ordering supplies.
Gentrification
Gentrification is a process in which low-cost, physically deteriorated neighborhoods experience physical renovation and an increase in property values, along with an influx of wealthier residents who displace the neighborhood’s original inhabitants.
Good Faith Estimate (GFE)
A form required by the Real Estate Settlement and Procedures Act (RESPA) that discloses an estimate of the amount or range of charges, for specific settlement services the borrower is likely to incur in connection with the mortgage transaction.
Greeen Belt
A Green Belt or Greenbelt is a policy or land use designation used in land use planning to retain areas of largely undeveloped, wild, or agricultural land surrounding or neighbouring urban areas.
Ground Rent
Payment for the use of land when title to a property is held as a leasehold estate (that is, the borrower does not actually own the property, but has a long-term lease on it).
Growing-Equity Mortgage (GEM)
A fixed-rate mortgage in which the monthly payments increase according to an agreed-upon schedule, with the extra funds applied to reduce the loan balance and loan term.

Hazard Insurance
Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other covered hazards or natural disasters.
Home Equity Line of Credit
A type of revolving loan, that enables a home owner to obtain multiple advances of the loan proceeds at his or her own discretion, up to an amount that represents a specified percentage of the borrower’s equity in the property.
Home Inspection
An examination of the construction, condition and internal systems of a home prior to purchase; satisfactory home inspection may be a condition of purchase.
Homeowner’s Insurance
A broad form of insurance coverage that combines hazard insurance with personal liability protection and other coverage.
Homeowner’s Warranty (HOW)
Insurance offered by a seller that covers certain home repairs and fixtures for a specified period of time.
Homeowners’ Association
An organization of homeowners residing within a particular area whose principal purpose is to ensure the provision and maintenance of community facilities and services for the common benefit of the residents.
Housing Expense Ratio
The percentage of a borrower’s gross monthly income that is devoted to housing costs.
Housing Tenure
Housing tenure refers to the financial arrangements under which someone has the right to live in a house or apartment. The most frequent forms are tenancy, in which rent is paid to a landlord, and owner occupancy. Mixed forms of tenure are also possible.
HUD-1 Settlement Statement
A document that lists all closing costs on a real estate purchase or refinance transaction. Also known as the “closing statement” or “settlement sheet.”

Immovable property
In all the civic law systems, immovable property is the equivalent of “real property” in common law systems, i.e. it is land or any permanent feature or structure above or below the surface.
Income Property
Real estate developed or purchased to produce income, such as a rental unit.
Interest Rate
An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. Interest rates are normally expressed as a percentage over the period of one year.
Interest
The fee charged for borrowing money, usually expressed as an annual percentage of the principal.
Internet Data Exchange
An Internet Data Exchange (IDX) is a real estate property search site which allows the public to conduct searches of approved Multiple Listing Service properties in a certain area.
Initial Interest Rate
The original interest rate for an adjustable-rate mortgage (ARM). Sometimes known as the “start rate.”
Installment
The regular periodic payment that a borrower agrees to make to a lender.
Installment Debt
A loan that is repaid in accordance with a schedule of payments for a specified term (such as an automobile loan).
Interest Accrual Rate
The percentage rate at which interest accumulates or increases on a mortgage loan.
Interest Rate Cap
For an adjustable-rate mortgage, a limitation on the amount the interest rate can change per adjustment or over the lifetime of the loan, as stated in the note.
Interest Rate Ceiling/floor
For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.
Investment Property
A property purchased to generate rental income, tax benefits, or profitable resale rather than to serve as the borrower’s primary residence. Contrast with “second home.”

Joint and several liability
Joint and several liability is a common law rule of liability, whereby a plaintiff may recover all the damages from any of the negligent defendants regardless of their individual share of the liability.
Judgment Lien
A lien on the property of a debtor resulting from the decree of a court.
Junior Mortgage
A loan that is subordinate to the primary loan or first-lien mortgage loan, such as a second or third mortgage.

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Land contract
Land contract (a.k.a. contract for deed or “installment sale agreement”) is a contract between the owner of the real property (called the “vendor” or the “seller”) and a person who wants to buy the property (the “vendee”, “contract purchaser”, “purchaser” or “buyer”)for an agreed-upon purchase price.
Land registration
In law, land registration is a system by which the ownership of estates in land, is recorded and registered, usually by government in order to provide evidence of title and to facilitate dealing. The Torrens title system is a widely used method for registering land, particularly in Commonwealth jurisdictions, replacing the deeds registration system.
Land trust
A land trust is an organization established to hold land and to administer use of the land according to the charter of the organization. A land trust is a useful way to manage complex divisions of the bundle of rights that people can own in real estate, and can be used to manage something as large and complex as a multi-state REIT, or as common and small as a single-family home.
Landlord
A landlord, or landlady, is the owner of a house, apartment, condominium, or real estate which is rented or leased to an individual or business, who is called the tenant.
Law
Agency (law)
Agency is an area of commercial law dealing with a contractual or quasi-contractual tripartite set of relationships when an Agent is authorised to act on behalf of another (called the Principal) to create a legal relationship with a Third Party. This branch of law separates and regulates the relationships between:Agents and Principals;
Agents and the Third Parties with whom they deal on their Principals’ behalf; and
Principals and the Third Parties when the Agents purport to deal on their behalf.
Late Charge
A penalty imposed by the lender when a borrower fails to make a scheduled payment on time.
Lease-Purchase Option
An option sometimes used by sellers to rent a property to a consumer, who has the option to buy the home within a specified period of time.
Typically, part of each rental payment is put aside for the purpose of accumulating funds to pay the down payment and closing costs.

Leasehold
Leasehold’ is a form of property tenure where one party buys the right to occupy land or a building for a given length of time. A lease is a legal estate, leasehold estate can be bought and sold on the open market and differs from a tenancy where a property is let on a periodic basis such as weekly or monthly.
Lien
A legal encumbrance or claim on property as security for a debt.
Liabilities
A person’s debts and other financial obligations.
Liability Insurance
Insurance coverage that protects property owners against claims of negligence, personal injury or property damage to another party.
Life estate
A life estate, at common law is an estate in real property that ends at death.
Lifetime Cap
For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate or monthly payment can increase or decrease over the life of the loan.
Liquid Asset
A cash asset or an asset that is easily converted into cash.
Liquidated Damages
Liquidated damages is a term used in the law of contracts to describe a contractual term which establishes damages to be paid to one party if the other party should breach the contract.
Lis pendens
Lis pendens is Latin for “suit pending.” This may refer to any pending lawsuit or a the specific situation with a public notice of litigation which has been recorded in the same location where the title of real property has been recorded.
Listing contract
A listing contract is a contract between a real estate broker (or his/her agent representatives, acting in the broker’s name) and a seller or sellers of real property to give the broker the right to offer the property for sale.
Loan Origination
The process by which a lender makes a loan which may include taking a loan application, processing and underwriting the application, and closing the loan.
Loan Origination Fee
A fee to cover some of the administrative costs of processing a loan. It is often expressed in points. One point is equal to 1 percent of the loan amount.
Loan-To-Value (LTV) Ratio
The relationship between the loan amount and the value of the property (the lower of appraised value or sales price), expressed as a percentage of the property’s value. For example, a $100,000 home with an $80,000 mortgage has an LTV of 80 percent.
Lock-in
An agreement in which the lender agrees to “lock-in” the borrower’s interest rate for a set period of time before closing

Market capitalization
Market Capitalization, often abbreviated to 0, is a measurement of corporate size that refers to the current stock price times the number of outstanding shares. This measure differs from equity value to the extent that a firm has outstanding stock options or other securities convertible to common shares.
Margin
For an adjustable-rate mortgage (ARM), the amount that is added to the index to determine the interest rate on each adjustment date, as stated in the note.
Maturity Date
The date on which a mortgage loan is scheduled to be paid in full, as stated in the note.
Mechanics lien
A mechanics’ lien is a hold on real property for the benefit of someone whose work or property improves the property. It is called by various names, including materialman’s lien, supplier’s lien, laborer’s lien, construction lien and others.
Merged Credit Report
A credit report issued by a credit reporting company that combines information from the three major credit repositories.
Mortgage
A mortgage is a method of using property (real or personal) as security for the payment of a debt.
Mortgage Broker
A mortgage broker acts as an intermediary who sources mortgages on behalf of individuals or businesses.
Mortgage life insurance
Mortgage Life Insurance refers to a insurance policy that guarantees repayment of a mortgage loan in the event of death or, possibly, disability of the mortgagor. Private Mortgage Insurance or PMI refers to protection for the lender in the event of default, usually covering a portion of the amount borrowed.
Multiple Listing Service
Multiple Listing Service (MLS) (also Multiple Listing System or Multiple Listings Service) is a database which allows real estate brokers representing
sellers under a listing contract to widely share information about properties with real estate brokers who may represent potential buyers or wish to cooperate with a seller’s broker in finding a buyer for the property.
Mortgage Insurance Premium (MIP)
The amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (PMI) company.
Mortgagee
The institution or individual to whom a mortgage is given; the lender.
Mortgagor
The owner of real estate who pledges property as security for the repayment of a debt; the borrower.
Multifamily Mortgage
A mortgage loan on a building with more than four dwelling units.
Multifamily properties
Typically, buildings with five or more dwelling units.

Negative Amortization
An increase in the balance of a loan caused by adding unpaid interest to the loan balance; this occurs when the payment does not cover the interest due.
Net Worth
The value of a company or individual’s assets, including cash, less total liabilities.
Niche real estate
A niche is specialised sector of the property market. Examples include income property, garden real estate, condos, equestrain property, vacation property, farm property, golf property, waterfront homes, beach houses and luxury homes. These are often categories in which potential buyers think about the property they seek.
Nonliquid Asset
An asset that cannot easily be converted into cash.
Note
A written promise to pay a specified amount under the agreed upon conditions.
Note Rate
The interest rate stated on a mortgage note, or other loan agreement.

Option
An option is a contract whereby one party (the holder or buyer) has the right but not the obligation to exercise a feature of the contract (the option) on or before a future date (the exercise date or expiry). The other party (the writer or seller) has the obligation to honor the specified feature of the contract. Since the option gives the buyer a right and the seller an obligation, the buyer has received Original Principal Balance.
The total amount of principal owed on a mortgage before any payments are made.
Origination Fee
A fee paid to a lender to cover the administrative costs of processing a loan application. The origination fee typically is stated in the form of points. One point is 1 percent of the mortgage amount.
Owner Financing
A transaction in which the property seller provides all or part of the financing for the buyer’s purchase of the property.
Owner Occupancy
An owner-occupier is a person who lives in a house that he or she owns. Owner-occupancy is therefore also called home ownership

Partial Payment
A payment that is less than the scheduled monthly payment on a mortgage loan.
Payment Change Date
The date on which a new monthly payment amount takes effect, for example, on an adjustable-rate mortgage (ARM) loan.
Payment Cap
For an adjustable-rate mortgage (ARM) or other variable rate loan, a limit on the amount that payments can increase or decrease during any one adjustment period.
Personal Property
Any property that is not real property.
PITI
An acronym for the four primary components of a monthly mortgage payment: principle, interest, taxes, and insurance (PITI).
PITI Reserves
A cash amount that a borrower has available after making a down payment and paying closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.
Planned Unit Development (PUD)
A real estate project in which individuals hold title to a residential lot and home while the common facilities are owned and maintained by a homeowners’ association for the benefit and use of the individual PUD unit owners.
Points
Points are a form of pre-paid interest. One point equals one percent of the loan amount.
Power of Attorney
A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.
Pre-Approval
A process by which a lender provides a prospective borrower with an indication of how much money he or she will be eligible to borrow when applying for a mortgage loan. This process typically includes a review of the applicant???s credit history and may involve the review and verification of income and assets to close.
Pre-Qualification
A preliminary assessment by a lender of the amount it will lend to a potential homebuyer. The process of determining how much money a prospective home buyer may be eligible to borrow before he or she applies for a loan.
Prepayment
Any amount paid to reduce the principal balance of a loan before the scheduled due date.
Prepayment penality
A fee that a borrower may be required to pay to the lender, in the early years of a mortgage loan, for repaying the loan in full or prepaying a substantial amount to reduce the unpaid principle balance.
Private Mortgage Insurance (PMI)
Insurance for conventional mortgage loans that protects the lender from loss in the event of default by the borrower.
Purchase and Sale Agreement
A document that details the price and conditions for a transaction. In connection with the sale of a residential property, the agreement typically would include: information about the property to be sold, sale price, down payment, earnest money deposit, financing, closing date, occupancy date, length of time the offer is valid, and any special contingencies.
Purchase Money Mortgage
A mortgage loan that enables a borrower to acquire a property.

Qualifying Guidelines
Criteria used to determine eligibility for a loan.
Qualifying Ratios
Calculations that are used in determining the loan amount that a borrower qualifies for, typically a comparison of the borrower’s total monthly income to monthly debt payments and other recurring monthly obligations.
Quality Control
A system of safeguards to ensure that loans are originated, underwritten and serviced according to the lender’s standards and, if applicable, the standards of the investor, governmental agency, or mortgage insurer.
Quit claim deed
A quit claim deed is a legal document by which a person releases or “quits” any claim that they may have had to property.

Rate Caps
For an adjustable rate mortgage loan, the maximum interest rate that may be charged, either at the time of each adjustment date or over the life of the loan.
Rate Lock
An agreement in which a lender “locks in” or guarantees an interest rate for a specified period of time prior to closing.
Real Estate Settlement Procedures Act (RESPA)
A federal law that requires lenders to provide home mortgage borrowers with information about transaction-related costs prior to settlement, as well as information during the life of the loan regarding servicing and escrow accounts. RESPA also, prohibits kickbacks and unearned fees in the mortgage loan business.
Real Property
Land and anything permanently affixed thereto — including buildings, fences, trees, and minerals.
Real estate broker
A real estate broker is a party who acts an intermediary between sellers and buyers of real estate and attempts to find sellers who wish to sell and buyers who wish to buy.
Real estate developer
A real estate developer or property developer makes improvements of some kind to real property, thereby increasing its value. The developer may be an individual, but is more often a partnership, limited liability company or corporation.
Real estate economics
Real estate economics is the application of economic techniques to real estate markets. It tries to describe, explain, and predict patterns of real estate prices, building production, and real estate consumption.
Real estate investments trust
A real estate investments trust or REIT is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes.
Recorder
The public official who keeps records of transactions that affect real property in the area. Sometimes known as a “Registrar of Deeds” or “County Clerk.”
Recording
The filing of a lien or other legal documents in the appropriate public record.
Refinance Transaction
The process of paying off one loan with the proceeds from a new loan using the same property as security.
Rehabilitation Mortgage
A mortgage loan made to cover the costs of repairing, improving, and sometimes acquiring an existing property.
Remaining Term
The original number of payments due on the loan minus the number of payments that have been applied.
Rent
Renting is an agreement where a payment is made for the temporary use of a good or property owned by another person or company.
Repayment Plan
An arrangement by which a borrower agrees to make additional payments to pay down past due amounts while still making regularly scheduled payments.
Rescission
The cancellation or annulment of a transaction or contract by operation of law or by mutual consent. Borrowers may have a right to cancel certain mortgage refinance transactions within three business days after closing, or for up to three years in certain instances.
Revolving Debt
Credit that is extended by a creditor under a plan in which (1) the creditor contemplates repeated transactions; (2) the creditor may impose a finance charge from time to time on an outstanding unpaid balance; and (3) the amount of credit that may be extended to the consumer during the term of the plan is generally made available to the extent that any outstanding balance is repaid.
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.
Rural Housing Service (RHS)
An agency within the U.S. Department of Agriculture (USDA), which operates a range of programs to help rural communities and individuals by providing loan and grants for housing and community facilities. The agency also works with private lenders to guarantee loans for the purchase or construction of single-family housing.
Risk
Risk is a concept which relates to human expectations. It denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or from some future event.

Sale-Leaseback
A transaction in which the buyer leases the property back to the seller for a specified period of time.
Second Mortgage
A mortgage that has a lien position subordinate to the first mortgage.
Secondary Mortgage Market
The market in which mortgage loan and mortgage-backed securities are bought and sold.
Secured Loan
A loan that is backed by property such as a house, car, jewelry, etc.
Security
The property that will be given or pledged as collateral for a loan.
Seller Take-Back
An agreement in which the seller of a property provides financing to the buyer for the home purchase.
Servicer
A firm that performs servicing functions, including collecting mortgage payments, paying the borrower’s taxes and insurance and generally managing borrower escrow accounts.
Servicing
The tasks a lender performs to protect the mortgage investment, including the collection of mortgage payments, escrow administration, and delinquency management.
Settlement
The process of completing a loan transaction at which time the mortgage documents are signed and then recorded, funds are disbursed, and the property is transferred to the buyer (if applicable). Also called closing or escrow in different jurisdictions.
Settlement Statement
A document that lists all closing costs on a real estate purchase or refinance transaction.
Single-Family Properties
One- to four-unit properties including detached homes, townhouses, condominiums, and cooperatives, and manufactured homes attached to a permanent foundation and classified as real property under applicable state law.
Soft Second Loan
A second mortgage whose payment is forgiven or is deferred until resale of the property.
Soldiers and Sailors Civil Relief Act
A federal law that restricts the enforcement of civilian debts against military personnel who may not be able to pay because of active military service.
Subordinate Financing
Any mortgage or other lien with lower priority than the first mortgage.
Specific Performance
In the law of remedies, an order of specific performance is an order of the court which requires a party to perform a specific act. While specific performance can be in the form of any type of forced action, it is usually used to complete a previously established transaction, thus being the most effective remedy in protecting the expectation interest of the innocent party to a contract.
Speculation
Speculation involves the buying , holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest.
Squatter’s right
In real estate common law, squatter’s right sometimes called as adverse possession is a means of acquiring title to another’s real property without compensation, by, as the name suggests, holding the property in a manner that conflicts with the true owner’s rights.
Stigmatized property
The term stigmatized property is a real estate business jargon that describes a normal house stigmatized because someone has been murdered or committed suicide in it. A house widely believed to be “haunted” is also a “stigmatized property”.
Survey
A precise measurement of a property by a licensed surveyor, showing legal boundaries of a property and the dimensions and location of improvements.
Sweat Equity
A borrower’s contribution to the down payment for the purchase of a property in the form of labor or services rather than cash.

Taxes and Insurance
Funds collected as part of the borrower’s monthly payment and held in escrow for the payment of the borrower’s state and local property taxes and insurance premiums.
Third-Party Origination
A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package a mortgage loan.
Title
A legal document evidencing a person’s right to or ownership of a property.
Title insurance
Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against losses arising from defects in the title not listed in the title report or abstract.
Title Search
A check of the public records to ensure that the seller is the legal owner of the property and to identify any liens or claims against the property.
Tenancy in common
Tenancy in common is the default form of concurrent estate, in which each owner, referred to as a tenant in common, is regarded by the law as each owning separate and distinct shares which may differ in size. This form of ownership is common where the co-owners are not married or have contributed different amounts to the acquisition of the property.
Tenancy by the entirety
Tenancy by entirety is a type of concurrent estate available only to married couples, wherein ownership of the property is treated as though the husband and wife are a single legal person.
Trade Equity
Real Estate or assets given to the seller as part of the down payment for the property.
Transfer Tax
State or local tax payable when title to property passes from one owner to another.
Two- to Four- Family Property
A residential property that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed; a loan secured by such a property is considered to be a single-family mortgage.

Underwriting
In mortgage lending, the process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower’s creditworthiness, ability to repay the loan, and the value of the property securing the loan.
Unsecured Loan
A loan that is not backed by collateral

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Walkthrough
A common clause in a sales contract that allows the buyer to examine the property being purchased at a specified time immediately before the closing, for example, within the 24 hours before closing.
Warranty deed
A general warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of rela estate and has a right to sell it to you.

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Yield spread premium
Yield Spread Premium, or YSP, is the cash rebate paid to a mortgage broker based on selling an interest rate above the wholesale par rate that the borrower qualifies for

 

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