[glossary]
0-9
- (PUD) Planned Unit Development
- A Zonning designation for property developed at the conventional development, sometimes with improvements clustered between open , common areas. Uses may be Residential, Commercial or Industrial.
A
- APR
- Annual Percentage Rate, The Total Finance Charge (Interest, Loan, Fees,Points) Expressed as a percentage of the Loan Amount.
- ARM
- Adjustable Rate Mortgage : A Mortgage with and Interest Rate that Changes Over Time in line with movements of the index. ARM are also known as VRMs Variable Rate Mortgages.
- Addendum
- An Attachment to a Contract that Modifies the Terms and Conditions of the Original Contract.
- Adjustment Period
- The Length of Time between Interest Rate Changes on an ARM. For Example a Loan with an Adjustment Period on one Year is Called a one-year ARM, meaning the Rates can Change Once a year.
- Affidavit
- A Sworn Statement in Writing.
- Amortization
- Repayment of a loan in Equal Installments of Principal and Interest. Rather than Interest Only Payments.
- Appraisal
- A Valuation of Property, Usually Performed by Authorized Licensed Person.
- Assesment
- The Imposition of a Tax, Charge or Levy Usually According to Established Rates.
- Assessor
- A Public Official Who Evaluates Property For The Purpose of Taxation.
- Assumption of Mortgage
- A Buyers to Agreement to Assume The Liability Under an Existing Note that is Secured by a Mortgage or Deed of Trust, it Must be Approved by The Lender.
B
- Balloon Payment
- A lump Sum Principal Payment Due at The End of Some Mortgage or other Long-Term Loans.
- Binder
- Sometimes Referred as an Offer to Purchase or an Earnest Money Deposit Request. A Binder is The Acknowledgment of a deposit and a written agreement to enter into a Contract For the Sale of Real Estate.
C
- CC & R’s
- Covenants Conditions and Restrictions. A Document That Controls the Use, Requirements and Restrictions of a Property.
- CRB(Certified Residential Broker)
- To be Certified, A Broker must be a Member of the National Association of Realtors, and have Five Years experience as a licensed Broker and have completed five required Residential Division Courses.
- Cap
- The Limit on How Much an Interest Rate or Monthly Payment can Change, either at Each Adjustment or Over the Life of The Mortgage.
- Certificate of Reasonable Value (CRV)
- A Document That Establish The Maximum Value and Loan Amount for a VA Guaranteed Mortgage.
- Chain of Title
- A Term Applied to the past Series of Transactions and Documents Affecting the Title to a Particular Parcel of Land.
- Closing Statements
- The Financial Disclosure Statement that Accounts for all of the Funds Received and Expected at the Closing, Including Deposits for Taxes, Hazard Insurance and Mortgage Insurance.
- Condominium
- A form of Real Estate Ownership Where the Owner Receives Title to a Particular Unit and has a Proportionate Interest in Certain Common Areas. The Unit Itself is Generally a Separately Owned Space Whose Interior Surfaces( Walls, Floors, Ceilings) Serve as Boundaries.
- Contingency
- A Condition that Must be Satisfied Before a Contract is Binding. For Example, The purchase contract may be Contingent Upon Buyer Obtaining Financing.
- Conversion Clause
- A provision in some ARMs that Enables the Buyers to Change ARM to a Fixes-Rate Loan, usually after the first Adjustment Period. the new Fixed Rate is Generally set at the Prevailing Interest Rate for Fixed-Rate Mortgages. Usually costs extra money.
- Conveyance
- An Instrument by which Title is Transferred, A Deed. Also the Act of Transferring Title.
- Cooperative
- A Form of Multiple Ownership in which a Corporation or Business Trust entity holds Title to a Property and grants Occupancy Rights to Shareholders by means of Proprietary Leases of Similar Arrangements.
D
- Deed
- A written Document by which the ownership of land is transferred from one person to another.
- Due-on-Sale Clause
- An Acceleration Clause that requires Full Payment of a Mortgage of Deed of Trust when the secured property changes Ownership.
E
- Earnest Money
- The Portion of the down Payment delivered to the Seller or Escrow Officer by The Buyer with a written offer as Evidence of Good Faith.
- Easement
- An Interest in land owned by another that entitles its holder to a specific limited use, such as laying a sewer, Putting up Electric Power Lines or crossing the property driveway.
- Encumbrance
- A lien, A liability or charge upon a parcel of Land.
- Escrow
- A Procedure in which a Third Party acts as a Stakeholder for both the Buyer and the Seller, carrying out both parties instructions and assuming responsibilities for handling all the paperwork and distribution of Funds.
F
- FEDERAL NATIONAL MORTGAGE ASSOCIATION (Fannie Mae)
- A Privately owned corporation created by Congress to support the secondary Mortgage Market. It Purchases and sells residential mortgages insured by FHA or Guaranteed by the VA, as well as Conventional Home Mortgages.
- FHA Loan
- A Loan Insured by the Insuring Office of the Department of Housing and Urban Development: The Federal Housing Administration.
- Fee Simple
- An Estate in which the Owner has unrestricted power to dispose of the property as he wishes, including leaving by will or inheritance. It is the greatest interest a person can have in Real Estate,.
- Finance Charge
- The total cost a borrower must pay, directly or indirectly to obtain Credit according to Regulation Z.
G
- GRI ( Graduate Realtor Institute)
- A professional designation granted to a member of the National Association of Realtors who has successfully completed three courses covering Law, Finance and Principles of Real Estate.
- Graduated Payment Mortgage
- A Residential Mortgage with monthly payments that start at low level and increase at a predetermined time.
- Grantee
- A person who acquires and interest in land by deed, gratn or other Written Instrument.
- Grantor
- A person who by a written Instrument, Transfers to another an interest in Land.
H
- HUD 1
- A Form settlement (Closing) statement required by the US Department of Housing and Urban Development Department(HUD) where federally related mortgages are being made on residential properties. It is a Balance Sheet showing the source of Funds and the distribution of funds in connection with the Purchase and/or Mortgage of Residential Property.
- Home Inspection Report
- A qualified Inspector’s report on a property’s overall condition. The Report usually includes an evaluation of both the structure and the Mechanical Systems.
- Home Warranty Plan
- Protection against failure of Mechanical systems within the property.
I
- Improvements
- Those Additions to raw lands tending to increase value, such as buildings streets, sewer and others.
- Indemnity
- To make payment for a loss.
- Index
- A measure of Interest Rate changes used to determine changes in an ARM’s interest Rate over the term of the Loan.
- Ingress
- The right to enter a tract of land. Often used interchangeable with access.
J
- Join Tenancy
- An equal undivided ownership of property by two or more persons. Upon death of any owner, the survivors take the decedent’s interest in the property.
- Judgement
- A decree of a court. In practice this is the “lien” or charge upon the lands of a debtor resulting from the court’s award of money to a creditor.
K
L
- Lenders Policy
- A form of title insurance policy, which insures the validity, enforceability and priority of a lender’s lien. This form does not provide protection for the owner.
- Lien
- A legal gold for claim of a property as security for a debt or a charge.
- Loan Commitment
- A written promise to make a loan for a specified amount on specific terms.
- Loan-to-value Ratio
- The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.
- Lot
- A part of a subdivision or block having fixed boundaries ascertainable by reference to a plat or survey.
M
- Margin
- The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.
- Mechanics Lien
- A lien is allowed by statute to contractors, laborers and material suppliers on buildings or other structures upon which work has been performed or materials supplied.
- Metes and Bounds
- A descrption of land by courses and distances.
- Mortgage Life Insurance
- A type of term life insurance often bought by mortgagors. the coverage decreases as the mortgage balance declines. If the borrower dies while the policy is in force, the debt is automatically covered by the insurance proceeds.
N
- Negative Amortization
- Negative Amortization occurs when monthly payments fail to cover the interest cost. The interest that is not covered is added to the unpaid balance, which means that even after several payments, you could owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that are not high enough to cover the Interest.
- Note
- The instrument evidencing the indebtedness secured by a security instrument such as a mortgage.
O
- Origination Fee
- A fee or charge for work involved in evaluation, preparing and submitting a proposed mortgage loan. The fee is limited to 1% for VHA and VA loans.
- Ownership
- The right to possses and use property to the exclusion of others.
P
- PITI
- Principal Interest Taxes and Insurance.
- Point
- An amount equal to 1 % of he principal amount of the investment note. The lenders assesses Loan discounts points at closing to increase the yield on the mortgage to a position competitive with other types of investments.
- Policy
- A written contract of title insurance
- Power of Sale
- A clause in a will, mortgage, deed of trust or trust agreement authorizing the sale or transfer of land in accordance with the terms of the clause.
- Power or Attorney
- An instrument authorizing another to act on one’s behalf as his of her agent or attorney.
- Prepayment Penalty
- A fee charges to a mortgagor who pays a loan before it is due. this is NOT allowed for FHA or VA Loans.
- Private Mortgage Insurance(PMI)
- Insurance written by a private company protecting the lender against loss if the borrower defaults on the mortgage.
- Purchase Contract.
- A written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions. Also called a sales contract or sales agreement, earnest/ nest money contract or agreement for sale.
Q
R
- Real Estate Broker
- Broker is an Intermediary, an Agent Who Represent a Buyer or a Seller in a Real Estate Sale or Purchase.
- Real Property
- Land, together with fixtures, improvements and appurtenances.
- Realtor
- A real estate broker or associate active. A local real estate board affiliated with National Association of Realtors.
- Regulation Z
- The set of rules governing consumer lending issued by the Federal Reserve Bank of Governors in accordance with the Consumer Protection Act.
- Right of Way
- The right which one has to pass across the land of another. An Easement.
S
- Set Back Lines
- Those lines which delineate the required distances for the location of structures in rlation to the perimeter of the property.
- Survey
- The process of measuring land to determine size, location and physical description and the resulting drawing or map.
T
- Tenancy in Common
- A type of joint ownership of property by two or more persons with no right of survivorship.
- Title
- The evidence of right which a person has to the ownership and possession of land. Commonly considered as a history of rights.
- Title Insurance Policy
- A policy that protects the buyer, the mortgagee or other party against losses.
- Tract
- A particular parcel of Land.
- Trust
- A property right held by one as fiduciary for the benefit of another.
- Trustee
- A person holding property in a Trust as a fiduciary for the benefits of another.
U
V
- VA Loan
- A loan that is partially guaranteed by the Veterans Administration and made by a private lender.
- Variable Rate Mortgage
- A loan in which the Interest Rate fluctuates with the cost of funds or some other index.
- Vendor
- A seller of real property under land contract.
- Vest
- To pass to a person an immediate right or interest
- Vestee
- A non-legal term used by title insurers to indicate the owner of legal property in a policy or report.
W
- Warranty
- A promise by the grantor of real property that he or she is the owner and will be responsible to the buyer if title is other than represented.
- Will
- A written document providing for the distribution of property owned by a person after his or her death.
X
Y
Z
B