HomesWEB, Real Estate Glossary and Mortgage Terms, Consumer Resources

Word (727)	Definition
Abstract of judgment, law	The summary of a court judgment that creates a lien against a property when filed with the county recorder.
Accelerated cost recovery system	A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.
Accelerated depreciation	A bookkeeping method that depreciates property faster in the early years of ownership.
Acceleration Clause	A clause contained in a note & trust deed which gives the beneficiary or payee the right to declare the entire payment of any balance due upon an event such as a sale or transfer of title to Real Property.
Acceptance	The seller's written approval of a buyer's offer.
Accommodation Recording	The recordation of an instrument without consideration and without assumption of responsibility for correctness or validity.
Accretion	The gradual addition to the shore or bank of a waterway by deposits of sand or silt.
Active solar system	A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.
Actual age	The number of years a structure has been standing.
Add-on interest	The interest a borrower pays on the principal for the duration of the loan.
Addendum	An addition or change to a contract.
Additional principal payment	Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan.
Adjustable Rate Mortgage (arm)	Also regarded as a Variable Rate Mortgage. A Mortgage with an interest rate that may be adjusted up or down, depending on its terms, conditions or specific index.
Adjusted cost basis	The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.
Adjustment period	The amount of time between interest rate adjustments in an adjustable-rate mortgage.
Administrator	A person given authority to manage and distribute the estate of someone who died without leaving a will.
Administrator's deed	A legal document that an administrator of an estate uses to transfer property.
Adverse use	The access and use of property without the owner's consent.
Aeolian soil	Soil that is composed of materials deposited by the wind.
Affiant	A person who makes a sworn statement.
Affirmation	A substitution for an oath granted to people based on religious reasons.
Agency	A relationship that can be created by one or more persons in which one is authorized to act for another. In a Real Estate listing or sales transaction, a disclosure of Agency Relationships lawfully must be signed by all parties.
Agency closing	The process by which a lender uses a title company or other firm as an agent to complete a loan.
Agent	A person licensed by the state to conduct real estate transactions.
Agreement of sale	A document the buyer initiates and the seller approves that details the price and terms of the transaction.
Alienation clause	A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.
Allowances	Budgets offered by builders of new homes for the purchase of carpeting and fixtures.
Alternative mortgage	Any home loan that does not conform to a standard fixed-rate mortgage.
Amendment	An instrument containing any changes or modifications which the parties agree, after the initial escrow instructions have been executed by the parties.
Amenities	Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments.
American Society of Home Inspectors	The American Society of Home Inspectors is a professional association of independent home inspectors.
Amortization	Provision for the payment of a debt as to both principal and interest is paid in equal installments over a period of time.
Amortization tables	Mathematical tables that lenders use to calculate a borrower's monthly payment.
Annual	Any kind of plant that must be planted every year.
Annual mortgagor statement	A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest.
Annual Percentage Rate (APR)	The finance charges for a loan, including points and other loan fees, that are charged in addition to interest on the loan.
Annuity	The payment of a fixed sum to an investor at regular intervals.
Anticipatory breach	A communication that informs a party that the obligations of the original contract will not be fulfilled.
Application	A document that details a potential borrower's income, debt and other obligations to determine credit worthiness.
Application fee	The fee that a lender charges to process a loan application.
Appraisal	An opinion of fair market value of both land and improvements on it. This is not to be confused with a Comparative Market Evaluation which an Agent may make.
Appraisal fee	The fee that an appraiser charges to estimate the market value of the property.
Appraisal report	A detailed written report on the value of a property based on recent sales of comparable sites in the area.
Appraised value	An opinion of the current market value of a property.
Appreciation	An increase in the value of a home or other property..
Appurtenance	Anything belonging to or incidental to land and considered part of Real Property.
Arbitration	A method of resolving a dispute in which a third party renders a decision.
As-is condition	The purchase or sale of a property in its existing condition.
Asking price	A seller's initial price for a property.
Assessed Value	The value of property for taxation purposes.
Assessment	The estimated value of a piece of real estate or a levy placed on property in addition to taxes.
Assessment rolls	A list of taxable property compiled by the assessor.
Assessments	Special or local levies upon property in the immediate vicinity of an improvement. Assessments can be imposed by governmental entities such as flood control districts, street lighting or air pollution districts which serve the area.
Assets	Items of value which include cash, real estate, securities and investments.
Assignment	The transfer, in writing, of a person’s interest to another person of an asset, such as an assignment of stock, a deed of trust or a lease.
Assignor	A person who transfers rights and interests of a property.
Assumable mortgage	A mortgage that can be transferred to another borrower.
Assumption (of a mortgage or deed of trust)	An agreement by one party to another to pay an obligation previously owed by another. For example, the assumption of an existing trust deed loan by a new owner may occur when a property is sold.
Assumption clause	A provision that allows a buyer to take responsibility for the mortgage from a seller.
Assumption fee	The charge imposed by the existing lender when a buyer assumes the seller’s existing loan.
Attorney-in-fact	An agent authorized to act for another (see power of attorney)
Average price	The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes.
Back-to-back escrow	Arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time.
Backup offer	A secondary bid for a property that the seller will accept if the first offer fails.
Balance sheet	A statement that shows the assets, liabilities and net worth of an individual.
Balloon loan	A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principal.
Balloon Payment	A final installment payment in most cases much larger than the preceding payments on a promissory note.
Balloon-frame construction	A type of framing used in two-story homes in which studs extend from the ground to the ceiling of the second floor.
Bankruptcy	A proceeding in which an insolvent debtor can obtain relief from payment of certain obligations. Bankruptcies remain on a credit record for seven years and can severely limit a person's ability to borrow.
Bargain sale	The sale of a piece of property for less than market value.
Basis Point	A basis point is one one-hundredth of one percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points.
Before-tax income	Total income before taxes are deducted.
Beneficiary	In a deed of trust the lender is designated as the beneficiary. He obtains the benefit of the security.
Beneficiary Statement	The statement or report from the lender setting forth the terms and conditions of the loan already of record, such as amounts still owed, interest rate, monthly payment, etc.
Beneficiary’s Demand	The payment required by the beneficiary under the note or deed of trust before authorizing a reconveyance, the lien on title to property created by a deed of trust.
Bequest	Personal property given to a person through a will.
Betterment	An improvement that increases a property's value as opposed to repairs that maintain the value.
Bidding war	Offers from multiple buyers for a piece of property. Agents also sometimes compete to list a house for sale.
Bilateral contract	A contract in which the parties involved give mutual promises. Also called "reciprocal" contracts.
Bill of sale	A document that attests to the transfer of or transfer of ownership of personal property.
Binder	A memorandum of agreement to issue insurance giving temporary coverage until a formal policy is issued.
Biweekly mortgage	A mortgage that requires payments every two weeks and helps repay the loan over a shorter term.
Blanket insurance policy	A policy that covers more than one person or piece of property.
Blanket mortgage	A mortgage that covers more than one property owned by the same borrower.
Blighted area	A neighborhood that has deteriorated.
Blue sky laws	Regulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks.
Board of Equalization	A state board charged with ensuring that local property taxes are assessed in a uniform manner.
Boilerplate	Form language used in deeds, mortgages and other documents. Details can be added by individual parties.
Bona fide	A legal term that refers to actions or persons that are honest and in good faith.
Bond	An agreement that insures one party against loss by acts or defaults of another party.
Book value	The value of a property as a capital asset based on its cost plus any additions, minus depreciation.
Borough	A section of a city that has authority over local matters.
Boulevard	A street lined with trees or constructed with a landscaped median.
Boundary	The dividing line between two adjacent properties.
Breach of contract	The failure to perform provisions of a contract without a legal excuse.
Breach of covenant	The failure to obey a legal agreement.
Breach of warranty	A seller's inability to pass clear title to a buyer.
Breezeway	A roofed passageway with open sides.
Bridge loan	A short-term loan for borrowers who need more time to find permanent financing.
Broker	A person licensed by the state to deal in real estate.
Brokerage	The act of bringing together two or more parties in exchange for a fee or commission.
Broom clean	The ideal condition of a building when it is turned over to an owner or tenant.
Builder upgrades	Extra house features or better finishing materials that a builder offers.
Building and loan association	An organization that raises money to helps its members purchase real estate or construct a building.
Building code	A comprehensive set of laws that controls the construction or remodeling of a home or other structure.
Building inspector	A city or county employee who enforces the building code and ensures that work is correctly performed.
Building line or setback	Guidelines that limit how close an owner can build to the street or an adjacent property.
Building moratorium	A halt on home construction to slow the rate of development.
Building permit	A permit issued by a local government agency that allows the construction of home or renovation of a house.
Building restrictions	Regulations that limit the manner in which property can be used.
Bundle of rights	The various interests or rights an owner has in a property.
Bungalow	A small one-story house or cottage.
Buy-down mortgage	A home loan in which the lender receives a premium as an inducement to reduce the interest rate during the early years of the mortgage.
Buyer broker	A real estate broker who exclusively represents the buyer's interests in a transaction and whose commission is paid by the buyer rather than the seller.
Buyer's market	A slow real estate market in which buyers have the advantage.
Buyer's remorse	An emotion felt by first-time homebuyers after signing a sales contract or closing the purchase of a house.
by-law	A rule adopted for the internal government of a corporation.
Bylaws	The rules and regulations that a homeowners association or corporation adopts to govern activities.
C.C. & R.’s (Covenants, conditions and restriction	Usually applied to Condominims: Those matters that inhibit the use or other regulations placed against properties by an inclusion on a prior deed.
Call option	A clause in a loan agreement that allows a lender to ask for the balance at any time.
Cancellation clause	A clause that details the conditions under which each party may terminate the agreement.
Cape Cod style	A wood-frame or shingled house with a steep roof and several windows projecting from the second floor.
Capital	Money used to create income, such as funds invested in rental property.
Capital expenditure	The cost of making improvements on a property.
Capital gains	Profits an investor makes from the sale of real estate or investments.
Capital gains tax	A tax placed on the profits from the sale of real estate or investments.
Capital improvement	Any improvement that extends the life or increases the value of a piece of property.
Capitalization	A mathematical formula that investors use to compute the value of a property based on net income.
Capitalization rate	The percentage rate of return estimated from the net income of a piece of property.
Cash flow	The amount of cash a rental property investor receives after deducting operating expenses and loan payments from gross
Cash-out refinance	The refinancing of a mortgage in which the money received from the new loan is greater than the amount due on the old loan. The borrower can use the extra funds in any manner.
Cashier's check	A check the bank draws on itself rather than on a depositor's account.
Caveat	A formal notice, that asks a court to suspend action until the party which filed the challenge can be heard.
Caveat emptor	A legal principle derived from Latin than means "let the buyer beware."
Cavedium	A courtyard or atrium.
Central business district	The area of a city where most large businesses are located.
Certificate of Deposit (CD)	A document which shows that the bearer has a specified amount of money on deposit with a bank, stock-brokerage firm or other financial institution.
Certificate of deposit index	An index based on the interest rates on six-month CDs. It used to determine the interest rate for some adjustable-rate
Certificate of eligibility	A document issued by the Veterans Administration that verifies the eligibility of a veteran for a loan program.
Certificate of occupancy	A document which states that a home or other building has met all building codes and is suitable for habitation.
Certificate of sale	A document issued at a judicial sale, which entitles the buyer to receive a deed after court confirmation of the purchase of the
Certificate of title	A written opinion on the status of a piece of property based on an examination of the public record.
Chain of title	A chronological list of documents comprising the record history of title to a specific parcel of real property.
Change frequency	The adjustment schedule on an adjustable-rate mortgage.
Change order	A modification of the construction contract to authorize a change in the work, an adjustment in the amount of the contract or a change in the contract time. The owner, architect and contractor must sign the change.
Chattel	Personal property such as furniture, clothing or a car.
Chattel mortgage	A lien on personal property used as collateral for a loan.
City Reports	The requirement of a special report to be issued in connection with the sale of property, usually processed through the Department of Building and Safety Some-times, but not often an inspection is involved.
Classified property tax	A tax that varies in rate depending on the use of the property.
Clear title	A property that does not have liens, defects or other legal encumbrances.
Closing	The final procedure in which documents are signed and recorded, and the property is transferred.
Closing costs	Expenses incidental to the sale of real estate, including loan, title and appraisal fees.
Closing Statement	Settlement of the escrow. (1) The seller’s statement gives an accounting of the sales price paid less the charges assessed to the seller and any pay-offs made on behalf of the seller. (2) The buyers statement shows the deposits made, the loan(s) received or assumed, and any credits less the sales price, loan costs, insurance, pro-rata items and charges usually paid for by the buyer.
Cloud on title	An invalid encumbrance on real property.
Cluster development	A method of squeezing more homes into less space.
Co-housing	Individual housing units that are clustered around a common building where residents share cooking and other activities.
Co-insurance	Coverage that involves the use of two or more insurers..
Co-maker	A person who signs a promissory note with the borrower and assumes responsibility for the loan.
Co-signer	A second party who signs a promissory note and takes responsibility for the debt.
Codicil	A change to a will that adds or subtracts provisions or clarifies portions of the document.
Collateral security	Additional security that a borrower supplies to obtain a loan.
Collection	The series of steps a lender takes to bring a delinquent mortgage up to date.
Collusion	The action of two or more people to break the law.
Colonia	Unincorporated communities along the U.S.-Mexico border.
Commercial bank	A financial institution that provides a broad range of services, from checking and savings accounts to business loans and
Commercial property	An area that is zoned for businesses.
Commingling	The mixing of money held in trust with other funds.
Commission	The negotiable percentage of the sales price of a home that is paid to the agents of the buyer and seller.
Commitment	A pledge, promise, or firm agreement, such as a title insurer’s contractual obligation to insure title to real property.
Commitment fee	The fee a lender charges for promising to make a loan.
Common area	An area inside a housing development that is owned by all residents.
Common law	A body of laws based on custom, usage and rulings by courts in various jurisdictions.
Common-area assessments	Fees paid by the owners of a condominium project or planned-unit development to maintain, repair, improve or operate common
Common-interest development	A project composed of individually owned units that share usage and financial responsibility for common areas.
Community Property	Property acquired after marriage by either a husband and/or wife, other than by gift, or as in heir, legatee or devisee.
Community Reinvestment Act	A federal law that encourages financial institutions to loan money in the neighborhoods where minority depositors live.
Commute	The distance and time it takes a person to reach the workplace.
Comparables	Properties used as comparisons to determine the value of a certain property.
Comparative market analysis	An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.
Competent	A term for a buyer who is legally fit to enter into a sales contract.
Compound interest	The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan.
Condemnation	The process the government uses to take private property for public use without the consent of the owner.
Conditional commitment	A promise by a lender to make a loan if the borrower meets certain conditions.
Condominium	A multifamily or other structure in which units are individually owned and in which owners of the units also own an undivided interest in common areas.
Condominium conversion	The change in title from a single owner of an entire project or building to multiple owners of individual units.
Consent judgment	A binding written agreement between two parties to have a judgment entered and recorded.
Conservator	A court-appointed guardian.
Consideration	Anything that is legal, has value and induces a person to enter into a contract.
Construction budget	The funding that an owner arranges for the construction of a project.
Construction documents	Drawings and specifications from an architect that provide detailed requirements for the construction of a project.
Construction to permanent loan	The conversion of a construction loan to a longer-term traditional mortgage after construction has been completed.
Consumer Credit Counseling Service (CCCS)	A nationwide, nonprofit organization that helps consumers get out of debt and improve their credit profile. National headquarters: 8701 Georgia Avenue., Suite 507, Silver Springs, MD 20910. Phone: (800) 388-2227.
Contemporary style	A design that features streamlined shapes, large unadorned windows and industrial materials.
Contiguous lots	Pieces of property that are adjoined.
Contingency	Dependent upon conditions or events specified but not yet accomplished. A property may be sold contingent upon the seller or buyer meeting a predetermined condition mutually agreed upon.
Contingency listing	A property listing with a special condition attached.
Contingent fee	A fee that must be paid if a certain event occurs.
Contract	An agreement between two or more parties that creates or modifies an existing relationship.
Contract for deed	A contract in which the seller agrees to defer all or part of the purchase price for a specified period of time.
Contract of sale	An agreement entered into for the purchase of real property where title remains in the seller’s name until all conditions of the contract have been fulfilled.
Contract to purchase	A contract the buyer initiates which details the purchase price and conditions of the transaction and is accepted by the seller. Also known as an agreement of sale.
Contractor	The individual who contracts for the construction of a home or project.
Contractual lien	A voluntary obligation such as a mortgage or trust deed.
Controlled growth	Any restrictions imposed on the amount or type of new development in an area.
Conventional Loan	A mortgage loan not connected by a guarantee by the Veterans Administration (VA) or insured by the Federal Housing Administration(FHA).
Convertible adjustable-rate mortgage	A mortgage which starts as an adjustable-rate loan, but allows the borrower to convert the loan to a fixed-rate mortgage during a specified period of time.
Conveyance	A written document that transfers title to an asset from one person to another. A deed and an assignment are both conveyances, as is a bill of sale.
Conveyance tax	A tax imposed on the transfer of real property.
Cooperating broker	A real estate broker who finds a buyer for a property that another broker has listed.
Cooperative corporation	A business trust that holds the title to a cooperative residential building and grants occupancy rights to shareholders in the
Cooperative mortgages	Any loans related to a cooperative residential project.
Cooperative project	A project in which a corporation holds title and sells shares representing individual units to buyers who then receive a proprietary lease as their title.
Corner influence	The effect on the value of a property because it is situated on a corner or near a corner.
Corporate relocation	An arrangement by which employers pay to transfer and move employees.
Corrective work	Necessary or desired repairs to remedy problems uncovered by a home or specialized inspection.
Cost-plus contract	A construction contract that determines the builder's profit based on a percentage of the cost of labor and materials.
Counteroffer	A response to an offer.
Covenant	A legal assurance or promise in a deed or other document, or implied by the law.
Covenants, conditions and restrictions (CC&Rs)	Rules and regulations for a development, such as acceptable landscaping or improvements that can be made to individual
Crawl space	The space between the ground and the first floor of a home, usually no higher than four feet.
Creative financing	Innovative home-financing arrangements that help sell a property.
Credit	The money a lender extends to a buyer for a commitment to repay the loan within a certain time frame.
Credit history	A record of an individual's current and past debt payments.
Credit life insurance	Insurance that pays off a mortgage in the event of the borrower's death.
Credit rating	The degree of credit worthiness assigned to a person based on credit history and financial status.
Credit report	A credit bureau report that shows a loan applicant's history of payments made on previous debts. Several companies issue credit reports, but the three largest are Trans Union Corp., Equifax and Experian (formerly TRW ).
Credit repository	Large companies that gather financial and credit information from various sources about individuals who have applied for
Credit union	Nonprofit cooperative organizations that provide banking and financial services, including mortgages, home improvement loans and home equity loans, to their members.
Creditor	An individual or institution to whom a debt is owed.
Cross-bridging	The strengthening of a structure by bracing cross members between beams.
Cul de sac	A street or alley that is closed at one end.
Curable defect	A deficiency in a property that is easy or inexpensive to fix, such as chipping paint.
Curb appeal	The first impression of a house as seen from the street.
Days on the market	The period of time a property is listed for sale until it is sold or taken off the market
Debt	Any amount one person owes to another.
Dedication	The donation of land for public use by its owner.
Deed	A written document which conveys ownership of real property from one person to another.
Deed of trust	A three party security document conveying land, secured by the performance of an obligation, such as the repaying of a loan. Also called a Trust deed. Trust deeds are usually used in the state of California.
Deep-seal floor drain	A drain used to dispose of water from the basement floor to a sewer line.
Default	Failure to perform a duty, promise or to pay an obligation.
Deferred maintenance	Any repair or maintenance of a piece of property that has been postponed, resulting in a decline in property value.
Delinquent mortgage	A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings.
Demand	Demands are orders for funds. If a seller’s loan is to be paid in full through escrow, the Escrow Officer must request and receive a written demand for payment in order to use the documents necessary to release the loan.
Density test	An analysis of soil to determine if the surface can support the foundation of a house.
Deposit	Money given by the buyer with an offer to purchase property. Also called earnest money.
Depreciation	The decline in value of a piece of property.
Design/build	A project in which the owner contracts directly with an individual or company to perform design and construction.
Digital images	Images that are incorporated into house listings to give potential buyers a view of the property.
Disability insurance	An insurance policy which covers an individual's ability to produce income.
Disclosure	A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.
Discount points	Fees that a borrower pays at the time the lender makes the loan. A point equals 1 percent of the total loan amount.
Distressed property	Property that is in poor physical or financial condition.
Document needs list	A list of documents a lender requires when a potential submits a loan application.. The required documents range from paycheck stubs to credit card statements.
Documentary transfer tax	A tax on recorded transfers of title of real property.
Domed ceiling	A hemispherical ceiling that projects upward without support.
Domicile	A person's primary or permanent home.
Down Payment	The amount of cash or percentage of the purchase price paid by the buyer in cash, not borrowed from the lender.
Draw	A payment made to subcontractors or suppliers from a construction loan.
Dropped ceiling	A flat ceiling built lower than the original ceiling.
Dual agency	A relationship in which a real estate agent or broker represents both parties in a transaction.
Due on sale clause	A clause in a promissory note or deed of trust calling for automatic maturity and payoff of the loan in the event of sale or transfer or title to the property.
Due-on-sale clause	Standard language in a mortgage which states that the loan must be paid when a house is sold.
Duplex	A structure that consists of two separate family units.
Dutch colonial style	A design that features barn-like gambrel roof, a ground-level front porch, and dormers.
Early occupancy	The condition in which buyers can occupy the property before the sale is completed.
Earnest Money	An amount of money given as part of the purchase price of the property to bind the agreement between the buyer and seller. (Initial Deposit)
Earthquake insurance	A policy that provides coverage against damage to a home from an earthquake.
Easement	A right or interest in the property of another entitling the easement holder to some use, privilege or benefit, such as the right to cross over another person’s property to reach yours.
Effective age	The age of a structure estimated by its condition rather than its actual age.
Effective gross income	Additional income that a lender considers when assessing the loan application of a potential borrower.
Eminent domain	The government's right to condemn private land for public use, such as the routing of a public highway.
Employer-assisted housing	Programs which help employees purchase homes through special plans developed with lenders.
Encroachment	Fences or other structures that extend into the property of another owner.
Encumbrance	A claim or lien on a property which complicates the title process.
End loan	The conversion from a construction loan to permanent financing a condominium buyer secures after all units in a project have been completed.
Endorser	A person who signs over ownership of property to another party.
Environmental impact statement	A government-mandated evaluation of all aspects and effects a development will have on the environment of a proposed site.
Environmentally friendly home construction	A method of construction that utilizes recycled materials.
Equal Credit Opportunity Act.	A federal law that prohibits a lender or other creditor from refusing to grant credit based on the applicant's sex, marital status, race, religion, national origin or age. The law also prohibits a creditor from refusing to grant credit because the applicant receives public assistance.
Equifax	Equifax Credit Information Services, Inc., is one of the "Big Three" credit-reporting bureaus that operate nationwide. Address: P.O. Box 740249, Atlanta, GA 30374.
Equity	Market value of property actually owned by the property owner. This is often figured by a purchase price less the amount of all loan or others liens on the property.
Errors and omissions insurance	A policy that pays for any mistakes a builder or architect makes in a project.
Escrow	A transaction in which an impartial third party acts as an agent for the buyer and the seller, or the borrower and the lender, in carrying out instructions, delivering papers and documents and dispersing funds.
Escrow account	An account that a lender or mortgage servicer establishes to hold funds for the payment of expenses such as homeowners insurance and property taxes. Also known as an impound account.
Escrow agent	A neutral third party who ensures that all conditions of a real estate transaction are met.
Escrow analysis	A lender's periodic examination of an escrow account to determine if the lender is withholding enough funds from a borrower's monthly mortgage payment to pay for expenses such as property taxes and insurance.
Escrow closing	Escrow closes when all conditions of a real estate transaction are met and the title of the property is transferred to the buyer.
Escrow company	Firms that act as neutral third parties to ensure that all conditions that the buyer, seller and lender establish in a real estate transaction are met.
Escrow payment	Funds that a mortgage servicer withdraws from a borrower's escrow account to pay property taxes and insurance.
Estate	The total assets of a person, including real property, at the time of death.
Eviction	A legal procedure to remove a tenant for reasons including failure to pay rent.
Examination of title	An inspection by a title company of public records and other documents to determine the chain of ownership of a property.
Exception	An interest in real property which is excluded from the conveyance and remains with the grantor or which had been excluded in a prior conveyance such as oil and mineral rights.
Exclusive listing	A contract that gives an agent the exclusive right to market a property for a specific period of time.
Executor	A person appointed to carry out the instructions in a will. If there is no will, a probate court will appoint an executor.
Experian	Experian, formerly known as TRW Information Systems & Services, is one of the "Big Three" credit-reporting bureaus. Address: 505 City Parkway West, Orange, CA 92868.
Fair Credit Billing Act	A federal law that governs credit and charge card billing errors. If a credit or charge card company violates any provision, consumers can sue to recover damages.
Fair Credit Reporting Act.	A federal law passed in 1971 that regulates the activity of credit bureaus. It is designed to prevent inaccurate or obsolete information from staying in a consumer's credit file and requires credit bureaus to have reasonable procedures for gathering, maintaining and disseminating credit information. The act also requires credit bureaus to show a consumer their credit file if the consumer presents proper identification, although the bureau reserves the right to charge a fee for doing so.
Fair Debt Collection Practices Act.	A federal law passed in 1977 which outlaws debtor harassment and other types of collection practices. The act regulates collection agencies, original creditors who set up a separate office to collect debts, and lawyers hired by the creditor to help collect overdue bills. An original creditor--the company or individual that originally granted the credit--is not covered by the act, but may be covered by similar measures approved by state governments.
Fair Housing Act	Landmark federal law passed in 1965 and amended in 1988 that makes it illegal to deny rent or refuse to sell to anyone based on race, color, religion, sex or national origin. The 1988 amendment expanded the protections to include family status and
Fannie Mae	The official name of the Federal National Mortgage Association, it is a congressionally chartered, shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
Farmer's Home Administration	A U.S. Department of Agriculture agency that provides credit to farmers and rural residents.
Federal Home Loan Mortgage Corporation, law	The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac. The company buys mortgages from lending institutions, pools them with other loans and then sells shares to investors.
Federal Housing Administration (FHA)	This government agency operates a variety of home-loan programs. Its most popular is the Sec. 203(b), program, which provides low-rate mortgages to buyers who make a down payment as small as 3 percent.
Federal National Mortgage Association	Now officially dubbed Fannie Mae, this federally chartered agency buys mortgages from lending institutions, pools them with other loans and sells shares to investors.
Federal Reserve Board	A group of economists and other experts who set the nation's monetary policy. Its chief tool to control inflation is the power to control interest rates.
Federal Trade Commission	The government agency responsible for regulating a variety of companies and industries, from credit bureaus and collection agencies to timeshare operators and certain types of creditors. National headquarters: Sixth and Pennsylvania Avenue NW, Washington, D.C. 20580. Phone: (202) 326-2222.
Fee Simple	Absolute ownership of real property.
Fee simple defeasible	The owner of the property holds a fee simple title contingent upon certain conditions.
FHA loans	Mortgages that are insured by the Federal Housing Administration. The FHA's 203(b) loan program provides low-rate mortgages to buyers who make a down payment as small as 3 percent. The agency also operates loan plans for investors and purchasers of rural property.
Fiduciary duty	The relationship of trust that buyers and sellers expect from a real estate agent. The term also applies to legal and business relationships.
Field changes	Modifications made on the construction site that do not match blueprints.
Filled land	An area where the ground has been raised by adding dirt, gravel or other fill material.
Finder's fee	A fee in any amount that is paid to someone.
Firm commitment	A promise made by a lender when it agrees to loan money for the purchase of property.
First mortgage	The primary mortgage on a property that has priority over all other voluntary liens.
Fixed installment	The monthly payment on a home loan.
Fixed Rate Mortgage	A loan for which the interest rate or regular monthly payment does not change during the term of the loan.
Fixed time	The specific weeks in a year an owner of a timeshare arrangement has access to accommodations.
Fixed-rate mortgage	A home loan with an interest rate that will remain at a specific rate for the term of the loan. About 75 percent of all home mortgages have fixed rates.
Fixer-upper	A house that needs refurbishment or remodeling It usually sells at a below-market price.
Fixture	Personal property that is considered part of real property because it has been affixed in a manner that to remove it would cause damage to the property.
Flat fee	A set fee charged by a broker instead of a commission.
Flood insurance	Hazard coverage that is required in designated flood areas.
Flood plain	Flat, flood-prone areas located along waterways.
Florida rooms	Enclosed porches built on the side or back of a home.
For Sale By Owner (FSBO)	The owner acts as the agent to avoid paying a sales commission.
Forbearance	A course of action a lender may pursue to delay foreclosure or legal action against a delinquent borrower.
Foreclosure	The sale of real property given to secure performance on an obligation after the oblation has been breached.
Forfeiture	The relinquishing of property rights by a delinquent borrower.
Freddie Mac	The common name for the Federal Home Loan Mortgage Corporation, a congressionally chartered institution that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
Free-market lots	Owners of these types of lots may hire any builder to construct their home.
French doors	Two adjoining doors inlaid with glass that open from the middle.
Frontage	The portion of property that borders a roadway or body of water.
Fully amortized adjustable-rate mortgage	A mortgage that amortizes, or pays down, the balance of a loan.
Gag rules	A provision in contracts signed by new buyers that prohibits the owners from publicizing complaints about the builder.
General contractor	The person who hires all of the subcontractors and suppliers for a project.
General plan	A government's long-range land-use plan.
Gift	A cash gift a buyer receives from a relative or other source. Lenders usually require a "gift letter" stating that the money will not have to be repaid.
Girders	Crossbeams that support floor joists.
Good-faith estimate	An estimate from an institutional lender that shows the costs a borrower will incur, including loan-processing charges and inspection fees.
Government National Mortgage Association	Commonly known as Ginnie Mae, this agency buys home loans from lenders, pools them with other loans and sells shares to investors. Ginnie Mae differs from its cousins, Fannie Mae and Freddie Mac, in that it only purchases loans backed by the federal government.
Grace period	A specified amount of time to make a loan payment after its due date without penalty.
Graduated-payment mortgage (GPM)	A mortgage that requires a borrower to make larger monthly payments over the term of the loan. The payment is unusually low for the first few years but gradually rises until year three or five, then remains fixed.
Grantee	The person(s) or entity acquiring title to real property by a deed. (Buyer)
Grantor	The person(s) or entity transferring title to real property by a deed. (Seller)
Gross income	The total income of a household before taxes or expenses are subtracted.
Ground rent	The amount of money paid for the use of a piece of property when it is a leasehold estate.
Group home	A single-family residence used as a living space for unrelated, developmentally disabled or mentally disabled people.
Growing-equity mortgage	A fixed rate mortgage that increases payments over a specific period of time. The extra funds are applied to the principal.
Guarantee mortgage	A loan guaranteed by a third party, such as a government institution.
Hazard insurance	This provision of homeowners insurance covers damage by fire, wind or other disaster. It is required by all lenders before a loan is approved.
High density	The concentration of housing units in a specific area or on a specific property.
High-rise	Any building higher than six stories.
Historic preservation	The physical rehabilitation of a historic home or building, and the movement of the same name begun in the 1960s in the U.S. to preserve and protect landmarks and urban neighborhoods.
Historic structure	A home or building listed in the National Register of Historic Places and certified as historic by the U.S. Secretary of the Interior.
Home equity conversion mortgage	Loans made to older owners who want to convert equity into money. Because borrowers are qualified on the basis of the value of their home, e, the loan is not the same as a home equity loan. Also known as reverse mortgages.
Home equity loan	A loan that allows owners to borrow against the equity in their homes.
Home inspection	An examination of a home's construction, condition and internal systems by an inspector or contractor prior to purchase.
Home Protection Policy	A service policy that provides limited protection against failure of the basic systems of plumbing, heating, electrical and other components on a home. Available in a variety of coverages and costs.
Home rule	The power of a local government to adopt its own land-use regulations.
Home warranty	A type of insurance that covers repairs to certain parts of a house and some fixtures.
Homeowners' association	A group that governs a modern subdivision or planned community. An association collects monthly fees from all owners to pay for maintenance of common areas, handle legal and safety issues, and enforce the covenants, conditions and restrictions set by the developer.
Homeowners' insurance	This insurance includes hazard coverage for any damages that may affect the value of a house, in addition to personal liability and theft coverage.
Homeowners' warranty	Special insurance policies that cover certain home repairs for a specified amount of time.
Homestead	A dwelling in which an owner or head of household resides which can be protected to a limited extent from forced sale by a recorded "Declaration of Homestead”
Homesteading	A document that to protects some of a home's equity from lawsuits.
Housing discrimination	The illegal practice of denying an individual or group the right to buy or rent a home based on race, color, religion, national origin, sex, disability or family status.
Housing expense ratio	The percentage of gross monthly income devoted to housing costs.
HUD-1 Uniform Settlement Statement	A closing statement or settlement sheet that outlines all closing costs on a real estate transaction or refinancing.
Impact fees	Fees collected from developers of new homes to pay for schools, parks and other facilities.
Implied warranty of habitability	Court cases which determined that all new homes are assumed to be fit for human habitation and meet all building codes.
Impound Account	A savings account held in trust by the lender in which the borrower is required to place monthly payments for taxes, insurance and/or other purposes.
Impounds	A portion of the monthly mortgage payment that is placed in an account and used to pay for hazard insurance, property taxes and private mortgage insurance.
In-file credit report	Computer-generated reports drawn from credit repositories that are generally regarded as objective histories.
Income property	Property that is not occupied by the owner but is used to generate income.
Incurable defect	A defect in a property that cannot be fixed, such as an adjacent hazardous waste site, or that would cost too much to repair relative to the value of the property.
Indemnity agreement	A warranty backed up with a written guarantee of payment on a matter in question.
Index	Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills.
Individual Retirement Account	Tax-deferred savings accounts that allow people to accrue retirement funds.
Inflation	This event occurs when there is more money available than there are goods and services to be purchased. Mortgage rates, which are determined by the marketplace and the actions of the Federal Reserve Board and Wall Street, are sensitive to
Infrastructure	The roads, schools, parks, utilities, bridges and communications systems in a community.
Initial interest rate	The original interest rate on an adjustable mortgage.
Inspection report	An examination of a home's exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roofing and interior.
Installment contract	A purchase agreement in which the buyer does not receive title to the property until all installments are paid.
Insurable title	Title to property that a company agrees to insure against defects and disputes.
Insurance	Owners and buyers can purchase various types of insurance: hazard, private mortgage and earthquake. The policies guarantee compensation for specific losses.
Insurance binder	A temporary insurance arrangement usually put in force until a permanent policy can be obtained.
Interest	The cost of borrowing money, usually charged as a percentage over time.
Interest accrual rate	The rate at which interest accrues on a mortgage.
Interest rate	The sum, expressed as a percentage, charged for a loan. Interest payments on most home loans are tax-deductible.
Interest rate buy-down plans	For cash-short buyers, some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer's monthly obligation.
Interest rate caps	A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period.
Interest rate ceiling	The highest interest a lender can charge for an adjustable-rate mortgage.
Interest-only loan	The pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment.
Inventory List	A detailed signed statement listing all personal property to be included in a purchase.