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| ABANDONMENT | The voluntary relinquishment of rights of ownership or another interest(such as easement) by faliure to use the property, coupled with an intent to abandon (give up the interest). |
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| ABSORPTION RATE | The ratio of the number of properties in an area that have been sold against the number available. Used to show the volatility of a market. |
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| ABSTRACT OF JUDGEMENT | A summary of money judgement obtained in court. (When this summary or abstract is recorded in the county recorder's office, in some states the judgement becomes a lien on the debtor's property, both presently owned or after-acquired.) |
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| ACCELERATION CLAUSE | A provision in a mortgage that gives the lender the right to demand immediate payment of the outstanding loan balance under certain circumstances. Usually when the borrower defaults on the loan. |
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| ACCESSORY BUILDING | A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage. |
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| ACCRETION | The natural growth of a piece of land resulting from forces of nature |
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| ACRE | 43,560 square feet. A measurement of area. |
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| ACTUAL AGE | The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE |
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| ADJUSTMENT DATE | The date the interest rate changes on an adjustable rate mortgage. |
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| BACKFILL | The slope of the ground around a house |
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| BALL COCK VALVE | The valve inside a toilet tank that controls the filling of the tank. |
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| BALLOON MORTGAGE | A mortgage loan in which the monthly payments are not large enough to repay the loan by the end of the term. So at the end of the term, the remaining balance comes due in a single large payment. |
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| BALLOON PAYMENT | The final large payment at the end of a balloon mortgage term. |
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| BANKRUPTCY | A special proceeding under federal, or in some instances state, laws by which the property of a debtor is protected by the court and may be divided among the debtor's creditors and the debtor. |
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| BILL OF SALE | A physical receipt indicating the sale of property. |
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| BIWEEKLY MORTGAGE | A mortgage where you make "half payments" every two weeks, rather than one payment per month. This results in making the equivalent of 13 monthly payments per year, rather than 12, significantly reducing the time it takes to pay off a thirty year mortgage. |
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| BLANKET OR TRUST DEED | A mortgage or trust deed that covers more than one lot or parcel of real property, and often an entire subdivision. As individual lots are sold, a partial reconveyance from the blanket mortgage is ordinarily obtained. |
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| BLIGHTED AREA | Any region of a city or town that has fallen into disrepair or otherwise has become undesirable. |
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| BONA FIDE | Any genuine offer, made without intent to defraud or deceive. |
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| BRIDGING FINANCE | An interim loan made to facilitate the purchase of a new home before the buyer's current residence sells and its equity is available to fund the new purchase. |
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| BROKER | An individual who facilitates the purchase of property by bringing together a buyer and a seller. |
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| BUFFER ZONE | A segment of land between two disparate municipal zones which acts as a shield to keep one zone from encroaching upon the other. Often used to separate residential districts from commercial areas. |
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| CALL OPTION | A clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time. |
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| CAP | Associated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage. |
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| CAPE COD COLONIAL | A single-story house style made popular in New England. Often characterized by a steep roof with gables. |
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| CAPITAL | Accumulated goods and money which is most often used to generate additional income. |
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| CAPITAL EXPENDITURE | An outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life. |
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| CASH-OUT REFINANCE | Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash. |
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| CAVEAT EMPTOR | Literally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property. |
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| CERTIFICATE OF DEPOSIT | A document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution. |
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| DATE OF APPRAISAL | The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection. |
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| DEBT | An obligation to repay some amount owed. This may or may not be monetary. |
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| DEBT OF EQUITY RATIO | The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt. |
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| DEED | A document indicating the ownership of a property. |
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| DEED OF RECONVEYANCE | A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage. |
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| DEED OF RELEASE | A document which dismisses a lien or other claim on a property. |
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| DEED OF SURRENDER | A document used to surrender any claim a person has to a property. |
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| DEED OF TRUST | A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions. |
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| DEED-IN-LIEU (OF FORECLOSURE) | A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures. |
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| DEFAULT | The condition in which a borrower has failed to meet the obligations of a loan or mortgage. |
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| DELINQUENCY | The state in which a borrower has failed to meet payment obligations on time. |
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| DEPOSIT | Cash given along with an offer to purchase property, Also called EARNEST MONEY. |
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| DEPRECIATION | The natural decline in property value due to market forces or depletion of resources. |
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| DETACHED SINGLE FAMILY HOME | A single building improvement intended to serve as a home for one family. |
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| DISCOUNT POINTS | Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount. |
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| DISTRESSED PROPERTY | A mortgaged property which has been foreclosed on. |
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| DOWN PAYMENT | An amount paid in cash for a property, with the intent to mortgage the remaining amount due. |
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| DUE ON SALE PROVISION | A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property. |
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| DUPLEX | A single-building improvement which is divided and provides two units which serve as homes to two families. |
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| DWELLING | A house or other building which serves as a home. |
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| EARNEST MONEY DEPOSIT | A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer. |
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| EASEMENT | The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines. |
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| EAVE | The part of the roof that extends beyond the exterior wall. |
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| ECONOMIC DEPRECIATION | The decline in property value caused by external forces, such as neighborhood blight or adverse development. |
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| ECONOMIC LIFE | The amount of time which any income-producing property is able to provide benefits to its owner. |
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| EFFECTIVE AGE | The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age. |
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| EMINENT DOMAIN | The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property. |
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| ENCROACHMENT | A building or other improvement on one property which invades another property or restricts its usage. |
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| ENCUMBRANCE | A claim against a property. Examples are mortgages, liens and easements. |
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| ENERGY EFFICIENT RATIO | An efficiency rating system for air conditioning units that corresponds to the number of BTU's output per watt of electricity used. |
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| EQUAL CREDIT OPPORTUINITY ACT (ECOA) | U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc |
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| EQUITY | The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property. |
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| ESCROW | An independent third party, such as First American Title, who acts as the agent for buyer and seller, or for borrower and lender, carrying out instructions of both and disbursing documents and funds. Escrow closes and the transfer of property or document is completed upon fulfillment of certain conditions specified in the written instructions, whereupon the necessary deeds and other instruments are recorded. |
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| ESTATE | (1) The interest or nature of the interest which one has in property, such as a life estate, the estate of a decreased, real estate, etc. (2) A large house with substantial grounds surrounding it, giving the connotation of belonging to a wealthy person. |
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| EXECUTION | An order directing a sheriff, constable, marshal or court-appointed commissioner to enforce a money judgment against the property of a debtor. This officer, if necessary, may sell the property to satisfy the judgment. |
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| EXECUTOR | A person appointed in a will and affirmed by the probate court to cause a distribution of the decedent's estate in accordance with the will. (The one who makes the will is called a "testator.") If a woman is appointed, she is referred to as the "executrix." |
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| FEE SIMPLE | An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership. |
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| FILE AND USE | In most states, title insurers file rate schedules, title insurance policies and endorsement forms with the State Insurance Department or other state agency and then may use such items or rates starting within a specified period of time after filing. Rates so filed usually are mandatory. |
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| FIXED RATE MORTGAGE | A mortgage having a rate of interest which remains the same for the life of the mortgage. |
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| FORECLOSURE | The sale of property used as security for a debt after default in payment. |
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| FORFEITURE OF TITLE | A common penalty for the violation of conditions or restrictions imposed by the seller upon the buyer in a deed or other proper document. For example, a deed may be granted upon the condition that if liquor is sold on the land, the title to the land will be forfeited (that is, lost) by the buyer (or some later owner) and will revert to the seller. |
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| FULL DISCLOSURE | In real estate, revealing all the known facts which may affect the decision of a buyer or tenant. A broker must disclose known defects in the property for sale or lease. |
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| GOOD FAITH OR MORTGAGE SAVINGS clause | A clause in CC & R's which provides that " a violation thereof shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value." |
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| GOOD FAITH PURCHASER OR MORTGAGEE | A person who buys or lends in good faith, that is, without notice of any existing problem, where value is paid or lent. |
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| GRANT | A transfer of real estate, between individuals, by deed. A transfer of real estate from a sovereign is accomplished by patent or royal decree. |
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| GRANT DEED | One of the many types of deeds used to transfer real property. Contains warranties against prior conveyances or encumbrances. When title insurance is purchased, warranties in a deed are of little practical significance. |
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| GUARDIAN | A person appointed by a court to manage the person and/or property of one who is legally incompetent to handle his/her own affairs. |
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| HAZARD INSURANCE | Real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property. |
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| HOMESTEAD | A statutory protection from execution or the establishment of title by occupation of real property in accordance with the laws of various states or the Federal Government. |
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| IMDEMNITY | Insurance against possible loss or damage. A title insurance policy is a contract of indemnity. |
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| IMPOUNDS | A trust type of account established by lenders for the accumulation of borrower's funds to meet periodic payments of taxes, mortgage insurance premiums, and/or future insurance policy premiums, required to protect their security. |
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| IMPROVED LAND | Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures. |
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| IMPROVEMENT RATIO | The comparative value of an improved piece of land to its natural, unaltered state. |
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| IMPROVEMENTS | Any item added to vacant land with the intent of increasing its value or usability. |
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| INCOME APPROACH | The process of estimating the value of property by considering the present value of a stream of income generated by the property. |
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| INCOME PROPERTY | A piece of property whose highest and best use is the generation of income through rents or other sources. |
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| INDEPENDANT APPRAISAL | An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property. |
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| INSPECTION | The examination of a piece of property, its buildings or other amenities. |
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| INSURABLE TITLE | The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear. |
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| INTEREST RATE | A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds. |
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| INVESTMENT PROPERTY | Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time. |
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| JOINT TENANCY | A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners. |
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| JOISTS | Horizontal beams laid on edge to support flooring or a ceiling. |
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| JUCICIAL FORECLOSURE | A type of foreclosure conducted as a civil suit in a court of law. |
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| JUDGEMENT LIEN | A lien against the property of a judgment debtor. An involuntary lien. |
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| LALLY COLUMN | A concrete filled steel pipe used to support beams. |
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| LATE CHARGE | An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document. |
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| LATENT DEFECTS | Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects. |
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| LEASE | A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force. |
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| LEASE OPTION | A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment. |
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| LEASEHOLD ESTATE | A type of property ''ownership'' where the buyer actually has a long-term lease on the property. |
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| LEGAL DESCRIPTION | The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection. |
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| LENDER | The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts. |
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| LIABILITIES | A person's outstanding debt obligations. |
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| LIABILITY INSURANCE | Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party. |
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| LIEN | Any claim against a piece of property resulting from a debt or other obligation. |
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| LIFE CAP | A limit on how far the interest rate can move for an Adjustable Rate Mortgage. |
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| LINE OF CREDIT | An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion. |
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| LIQUID ASSET | Any asset which can be quickly converted into cash at little or no cost, or cash itself. |
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| LOAN | Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan. |
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| MAJOR DEFICIENCY | A deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair. |
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| MANUFACTURED HOUSING | Once known as ''mobile homes,'' manufactured housing is any building which has been constructed off site, then moved onto a piece of real property. |
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| MARGIN | The difference between the interest rate and the index on an adjustable rate mortgage. |
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| MARGIN LAND | Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property. |
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| MASTER ASSOCIATION | An umbrella organization that is made up of multiple, smaller home owner's associations. Often found in very large developments or condominium projects. |
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| MATURITY | The date on which the principal balance of a financial instrument becomes due and payable. |
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| MERGED CREDIT REPORT | A credit report derived from data obtained from multiple credit agencies. |
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| METES AND BOUNDS | A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin. |
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| METROPOLITAN AREA | The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity. |
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| MINERAL RIGHTS | The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land. |
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| MISREPRESENTATION | A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence. |
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| MORTGAGE | A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral. |
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| MORTGAGE BANKER | A financial institution that provides primary and secondary mortgages to home buyers. |
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| MORTGAGE BROKER | A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer. |
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| MORTGAGE INSURANCE | A policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments. |
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| MORTGAGE INSURANCE PREMIUM | A fee that is often included in mortgage payments that pays for mortgage insurance coverage. |
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| MORTGAGE LIFE INSURANCE | A policy that fulfills the obligations of a mortgage when the policy holder dies. |
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| MORTGAGEE | The entity that lends money in a real estate transaction. |
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| MORTGAGOR | The entity that borrows money in a real estate transaction. |
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| MULTI-FAMILY PROPERTIES | Any collection of buildings that are designed and built to support the habitation of more than four families. |
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| NATIONAL ASSOCIATION OF MASTER APPRAISER | A non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal. |
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| NATIONAL ASSOCIATION OF REAL ESTATE APPR | An organization founded in 1956 which promotes standards of professionalism in its members. |
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| NATURAL VACANCY RATE | The percentage of vacant properties in a given area that is the result of natural turnover and market forces. |
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| NEGATIVE AMORTIZATION | When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest. |
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| NEIGHBOURHOOD | A subsection of a municipality that has been designated by a developer, economic forces or physical formations. |
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| NEIGHBOURHOOD LIFECYCLE | The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle. |
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| NET LEASABLE AREA | The space in a development, outside of the common areas, that can be rented to tenants. |
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| NEW ENGLAND COLONIAL | An architectural style dating from early American history typified by a two-story building with clapboard siding. |
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| NO COST LOAN | Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it. |
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| NO POINT LOAN | A loan with no "points". The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan. |
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| NON-CONFORMING USE | The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use. |
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| NONLIQUID ASSET | Any asset which can not be quickly converted into cash at little or no cost. |
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| NOTE | A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time. |
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| NOTE RATE | The interest rate stated on a mortgage note. |
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| NOTICE OF DEFAULT | Formal written notice from a lender to a borrower that default has occurred. |
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| OBSOLESENCE | The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities. |
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| OCCUPANCY | A physical presence within and control of a property. |
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| OCCUPANCY RATE | The percentage of properties in a given area that are occupied. |
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| OCTOPUS RECEPTACLE | An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets. |
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| OFF-SITE IMPROVEMENTS | Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property. |
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| OFF-STREET PARKING | Designated parking spaces associated with a particular building or other structure which are not located on public streets. |
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