An increase in the value of a property.
Appreciation
When ownership of a mortgage is transferred from one company or individual to another.
Assignment
A mortgage loan which requires the remaining balance be paid at a specific point in time.
Balloon Mortgage
Description of a title which is free of liens or legal questions as to ownership of the property.
“Clear”
The collateral in a home loan
The property itself
The adjustment date on an adjustable-rate mortgage.
The date the interest rate changes.
Deposit made by a potential buyer to show he/she is serious about buying a property.
Earnest Money Deposit (EMD)
A right-of-way which gives persons other than the owner access to or over a property.
Easement
A housing development created by dividing a tract of land into individual lots.
Subdivision
Contributions made to the construction or rehabilitation of a property with labor or services rather than cash.
Sweat equity
An adjustable rate mortgage with one interest rate for the first five or seven years and a different rate for the remainder of the term.
Two-step mortgage
Legal document evidencing a person’s right to or ownership of a property.
Title
Written document that transfers personal property from one owner to another.
Bill of sale
An oral or written agreement that is binding is a court of law.
Contract
Part of the purchase price of a property that the buyer pays in cash and does not finance with the mortgage
Down payment
Named in a will to administer an estate.
Executor/executrix
The greatest possible interest a person can have in real estate.
Fee Simple
Required for properties located in federally designated flood areas; type of insurance that compensates for physical property damage resulting from flooding.
Flood insurance
Individual conveying an interest in real property.
Grantor
Insurance that covers in the event of physical damage to a property from fire, wind, vandalism, or other hazards.
Hazard Insurance
A cash asset or asset easily turned into cash.
Liquid asset
Another term for the lender in a mortgage agreement.
Mortgagee
1% of the amount of the of the mortgage.
A point
Derived power from a legal document and grants someone complete or limited authority on behalf of another.
Power of Attorney
The amount borrowed or remaining unpaid, as well as the part of the monthly payment that reduces the remaining balance of a mortgage.
Principal
A written promise to repay a specific amount over a specified period of time.
Promissory note
Allows lender to demand payment, most commonly if the borrow defaults on the loan or transfers title to someone without informing the lender.
Acceleration Clause
Anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee.
Broker
Term used by appraisers to estimate the physical condition of the building; may be different from the building’s actual age.
Effective age
The difference between the fair market value of a property and the amount still owed on the mortgage and other liens.
Equity
An improvement that intrudes illegals on another’s property.
Encroachment
The person to whom an interest in real property is conveyed.
Grantee
A mortgage loan, usually in second position, which allows the borrower to obtain cash drawn against the equity in the property, up to a predetermined amount.
Home equity line of credit (HELOC)
A legal claim against a property that must be paid off when it is sold.
A lien
An agreement from a lender guaranteeing a specific interest rate for a specific time at a certain cost.
Rate lock-in
The right of the government to take private property for public use upon payment of its fair market value
Eminent Domain
A mortgage with a lien position subordinate to the first mortgage on a piece of property.
Second mortgage (junior lien)
A mortgage in which the interest rate adjusts periodically, according to corresponding fluctuations in an index.
Adjustable-rate mortgage (ARM)
A table showing how much of each mortgage payment is applied to interest and how much to principal. It also shows the gradual decrease of the loan balance to zero.
Amortization schedule
A mortgage in which you make payments every two weeks instead of once a month
Bi-weekly mortgage
The limitation of how much an adjustable rate mortgage may adjust over a six-month period, annual period, and over the life of a loan.
Cap
A provision in a mortgage which allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.
Due-on-Sale clause/provision
The sum total of all the real and personal property owned by an individual at time of death.
Estate
A written contract giving a licensed real estate agent the exclusive right to sell a property for a specified time.
Exclusive listing
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
Fair market value
A lender’s agreement to make a loan to a specific borrow on a specific property.
Firm commitment
A thorough inspection accomplished by a professional that evaluates the structural and mechanical condition of the property.
Home Inspection
Combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.
Homeowner’s Insurance
A property description which is recognized by law and is sufficient to locate and identify the property without oral testimony.
Legal description
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.
Maturity
The individual borrowing money in a mortgage agreement
Mortgagor
A fee that may be charged to a borrower who pays off a loan before it is due.
Prepayment penalty
Any real estate agent who is a member of a local real estate board affiliated with the National Association of Realtors
Realtor
The original amortization term minus the number of payments that have been applied.
Remaining term
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
A survey
Specializes in examining and insuring titles to real estate.
Title company
State or local tax payable when title passes from owner to another.
Transfer tax
Federal law requiring lenders to fully disclose in writing all terms and conditions of a mortgage.
Truth-in-Lending
The valuation placed on a property by a public tax assessor for purposes of taxation.
Assessed value
Document issued by the Veteran’s Administration that certifies a veteran’s eligibility for a VA loan.
Certificate of eligibility
An unwritten body of law based on general custom in England and used to an extent in some states.
Common law
A person to whom money is owed.
Creditor
Federal law requiring lenders as other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
Equal Credit Opportunity Act (ECOA)
An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low or moderate income family’s buying power and to decrease the total amount of cash needed to purchase a home. Participating borrowers are required to attend pre-purchase home-buyer education sessions.
Fannie Mae’s Community Home Buyer’s Program
Legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property.
Foreclosure
An individual’s financial obligations, to include long-term and short-term debt and any other amounts owed to others.
Liabilities
A value created according to a government formula intended to reflect the annual cost of borrowing, expressed as a percentage. It is always higher than the actual note rate on a loan.
Annual Percentage Rate (APR)
An individual qualified by education, training, and experience to estimate the value of real and personal property.
Appraiser
Final lump sum payment due at termination of a balloon mortgage.
Balloon payment
When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use.
Cash-out refinance
Time deposit held in a bank which pays a certain amount of interest to the depositor.
Certificate of deposit (CD)
Sometimes referred to as Homeowners Association Fees and are paid by the individual owners of condos or planned unit developments and are used to maintain the property and common areas.
Common area assessments
An amount owed to another
Debt
The decline in the value of property and an accounting term showing the declining monetary value of an asset.
Depreciation
The lawful expulsion of an occupant from real property.
Eviction
A loan in which the interest rate does not change during the loan term.
Fixed-rate
Typically referred to as a reverse annuity mortgage; this mortgage is unique in that instead of making payments to the lender, the lender makes payments to the mortgagor, allowing for the conversion of equity to cash. The loan does not have to be repaid until the borrower no longer occupies the property.
Home Equity Conversion Mortgage (HECM)
A written agreement between property owner and tenant laying out the terms of the agreement including payment and period of time.
Lease
The difference between the interest rate and the index on an adjustable rate mortgage.
A margin
Mortgage company which originates loans, then places them with a variety of other lending institutions with whom they usually have pre-established relationships.
Mortgage broker
The interest rate stated on a mortgage note
Note rate
PITI
Principal, interest, taxes, insurance
Reduces the principal on a loan before the due date and can result from a sales the owner’s decision to pay off the loan early, or foreclosure.
Prepayment
A written contract signed by a buyer and seller stating the terms and conditions under which a property will be sold.
Purchase agreement
A public official who keeps records of real property transactions in their area.
Recorder (a.k.a. “County clerk” and “registrar of deeds”)
Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.
Real property
In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
Right of survivorship
A loan backed by a security (collateral)
Secured loan
A mortgage or other type of lien that has a priority lower than that of a first mortgage.
Subordinate lien
Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.
Title insurance
An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. This guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.
Veteran’s Administration (VA)
A fixed-rate mortgage where the interest rate is reduced for a temporary period. The funds for this reduction can come from the seller, the lender, or another source. A lump sum is paid and held in an account used to supplement the borrower’s monthly payment.
“Buydown”
An additional individual who is both obligated on the loan and is on the title to the property.
Co-borrower
Real property where all the owners own the property, common areas and building together, with the exception of the interior of the unit to which they have title.
Condominium
An organization which gathers, records, updates, and stores financial and public records information about the payment records of individuals being considered for credit.
Credit repository
Failure to make mortgage payments when they are due.
Delinquency
Category of interest on real property which includes mortgages, easements, leases, or restrictions.
Encumbrance
A congressionally chartered, shareholder-owned company and the nation’s largest supplier of home mortgage funds
Federal National Mortgage Association (FNMA, or “Fannie Mae”)
Employer-sponsored investment plans allowing individuals to set aside tax-deferred-income for retirement or emergency purposes.
401(k) - private corporations
403B - non-profit organizations
Government owned organization created by congress on Sept. 1st, 1968; provides funds to lenders, specifically for VA/FHA loans.
Government National Mortgage Association (GNMA, or “Ginnie Mae”)
Jumbo loan limit (non-confirming loan threshold)
$417,000.00
Protects against claims against a property owner for negligence or bodily injury or property damage to another party.
Liability insurance
The percentage relationship between the amount of the loan and the appraised value of sales price (whichever is lower).
Loan to value (LTV)
Reports the raw data pulled from two or more of the major credit repositories.
Merged credit report
The total amount of principal owed on a mortgage before any payments are made.
Original principal balance
Limits the amount the interest rate can increase or decrease over the life of the mortgage.
Life cap
Given by a commercial bank or other financial institution for a certain time and certain amount.
Line of credit
A change in your mortgage without having to refinance.
Modification
The interest rate banks charge to their preferred customers. Changes are widely publicized in the new media and the same factors that influence this rate also affect interest rates of mortgage loans.
Prime rate
Legal document requiring a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.
A note
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage or graduated-payment mortgage.
Payment change date
Transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.
Quitclaim deed
The process of paying off one loan with the proceeds from a new loan using the same property as security.
Refinance
Amount of principal that has not yet been repaid.
Remaining balance
An arrangement to repay delinquent installments or advancements
Repayment Plan
[when given the] First opportunity to purchase a piece of property
Right of First Refusal
When a seller chooses to remain in the property after closing, typically giving the buyer compensation for the duration of the stay.
Sale-leaseback
Form of title where ownership does not pass to the survivors in the event of death
Tenancy in Common (remaining assets would be split between existing tenants)
Duties include: collecting principal/interest payments from borrowers, managing escrow accounts; these duties are usually acquired through purchase on the secondary market.
Loan Servicer
When a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.
Third-party origination
Fiduciary who holds or controls property property for the benefit of another
Trustee
Type of mortgage where buyer qualifies and is able to take over the seller’s mortgage.
Assurance mortgage
The transfers of title to a piece of property over the years
Chain of title
Property acquired by a married couple during the marriage and considered to be jointly owned.
Community property
Adjustable rate mortgage that allows the borrower to change the ARM to a fixed rate mortgage within a specified time.
Convertible ARM
In an effort to avoid foreclosure, an owner may provide the lender a:
Deed in lieu of foreclosure
Lender performs a calculation annually to make sure the correct amount of money for anticipated expenditures is being collected.
Escrow analysis
Report on the title of a property from the public records or an abstract of the title.
Examination of title
Consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one’s credit record.
Fair Credit Reporting Act
