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The REAL ESTATE DICTIONARY
is a compilation of terms commonly used in the real estate and
title insurance industry. The definitions are based on English
Common Law, and while generic, may not be exactly applicable
in all states. Please check with a local real estate attorney
prior to making any decisions.
A
B
C D
E F
G H
I J
K L M
N O
P Q R
S T U
V W
X Y Z
Index
Defined words are capitalized
- ABSTRACT
- The notes made by a title
examiner based on his examination of the land records. These
notes are a concise summary of the transactions affecting
the property. The title agency produces a BINDER
from the information in the abstract.
- ACCELERATION
CLAUSE
- A condition in a real estate
financing instrument giving the lender the power to declare
all sums owing lender immediately due and payable upon the
happening of an event, such as the sale of the property,
or a delinquency in the repayment of the note.
- ACCRETION
- The buildup of land from
natural forces such as wind or water.
- ACKNOWLEDGEMENT
- As a verb, the confirmation
by a party executing a legal document that this is his signature
and voluntary act. This confirmation is made to an authorized
officer of the Court or notary public who signs a statement
also called an acknowledgment.
- ACRE
- 43,560 square feet of land.
- ADJUSTMENT
INTERVAL
- On an adjustable rate mortgage,
the time between changes in the interest rate and/or monthly
payment, typically one, three or five years, depending on
the index.
- ADDENDUM
- A form/document added to
a contract or agreement also known as a Rider.
- ADJUSTABLE
RATE MORTGAGE (ARM)
- A mortgage loan which bears
interest at a rate subject to change during the term of
the loan.
- ADMINISTRATOR
- A person appointed by the
Court to settle the estate of a person who dies without
a will. The feminine form is Administratrix. Compare, EXECUTOR.
- ADVERSE
POSSESSION
- A claim made against land
titled in another person based on open, notorious and hostile
possession and use of the land to the exclusion of the titled
owner.
- AGENCY
- A relationship in which the
agent is given the authority to act on behalf of another
person (Principal).
- AGREEMENT
- A meeting of minds.
- AIR
RIGHTS
- The right to the air space
above the real property.
- ALTA OWNER'S
POLICY (American Land Title Association )
- A type of title insurance
policy issued by title insurance companies which expands
the risks normally insured against under the standard type
policy to include unrecorded mechanic's liens; unrecorded
physical easements; facts a physical survey would show ;
water and mineral rights; and rights of parties in possession,
such as tenants and buyers rights under unrecorded instruments.
- AMENDMENT
- A change to the correct or
alteration to the original document/agreement without changing
its principal essence.
- AMORTIZED
LOAN
- A loan to be repaid, interest
and principal, by a series of regular payments that are
equal or nearly equal, without any special balloon payment
prior to maturity.
- AMORTIZATION
- The periodic principal pay
down of a loan.
- ANNUAL PERCENTAGE
RATE (A.P.R.)
- Is a interest rate reflecting
the cost of a mortgage as a yearly rate. This rate is likely
to be higher than the stated note rate or advertised rate
on the mortgage, because it takes into account point and
other credit cost. the APR allows home buyers to compare
different types of mortgages based on the annual cost for
each loan.
- APPRAISAL
- An estimate of the value
of property, made by a qualified professional called an
"appraiser". Most states require licenses. Various
lenders have their own lists of approved appraisers.
- APPROVED
ATTORNEY
- An attorney authorized by
a title insurance company to handle closings and render
title opinions.
- APPURTENANCE
- Anything attached to the
land or used with it passing to the new owner.
- ASSESSMENT
- A local tax levied against
a property for a specific purpose, such as a sewer or street
lights.
- AS IS CONDITION
- What you see is what you
get. Seller does not make any guarantees or warrantees as
to the physical condition of the property.
- ASSIGN
- To transfer interest.
- ASSIGNEE
- One who receives an assignment
or transfer of rights. An assignment of a contract transfers
the right to buy property.
- ASSIGNOR
- The one who assigns to another
person.
- ASSUMPTION
- The agreement between buyer
and seller where the buyer takes over the payments on an
existing mortgage from the seller. Assuming a loan can usually
save the buyer money since this is an existing mortgage
debt, unlike a new mortgage where closing cost and new,
possibly higher, market-rate interest charges will apply.
- ATTACHMENT
- Seizure of property through
Court process to repay a debt.
- ATTORNEY
IN FACT
- A type of agency relationship
where one person holds a POWER
OF ATTORNEY allowing him to execute legal documents
on behalf of another. Decisions made by the attorney in
fact are binding on the principal.
- BALLOON
(payment) mortgage
- Usually a short-term fixed-rate
loan which involves small payments for a certain period
of time and one large payment for the remaining amount of
the principal at a time specified in the contract.
- BANKRUPTCY
- A provision of Federal Law
whereby a debtor surrenders his assets to the Bankruptcy
Court and is relieved of the future obligation to repay
his unsecured debts. A Trustee in Bankruptcy administers
the assets, selling them to pay as much of the debt as possible.
If your seller is in bankruptcy, the Trustee in Bankruptcy
owns the property and is the party to sign the contract
and make decisions. After bankruptcy, the debtor is discharged
and his unsecured creditors may not pursue further collection
efforts against him. Secured creditors, those holding deeds
of trust or judgment liens, continue to be secured by the
property but they may not take other action to collect from
the debtor.
- BENCHMARK
- A permanent reference mark
for surveyors.
- BENEFICIARY
- A person named to receive
a benefit from a TRUST. A contingent
beneficiary has conditions attached to his rights, usually
someone else must die first.
- BID
- An offer.
- BINDER
- A title insurance binder
is the written commitment of a title insurance company to
insure title to the property subject to the conditions and
exclusions shown on the binder.
- BLANKET
MORTGAGE
- A mortgage covering at least
two pieces of real estate as security for the same mortgage.
This sort of loan is more common for commercial property
or "special case" loans.
- BOND
- An amount of money, often
posted with the Court, to guarantee against loss as a result
of a possible claim. For example, if there is a LIEN
against the property, the owner may post a bond and the
lien is removed from the property and the parties argue
over the money rather than the property.
- BREACH OF
CONTRACT
- Failure to perform provisions
of a contract.
- BROKER.
- An individual in the business
of assisting in arranging funding or negotiating contracts
for a client buy who does not loan the money himself. Brokers
usually charge a fee or receive a commission for their services.
- BUILDING
RESTRICTION LINE
- A required set-back a certain
distance from the road within which no building may take
place. This restriction may appear in the original plat
of subdivision, restrictive covenants or by building codes
and zoning ordinances.
- BUY-DOWN
- When the lender and/or the
home builder subsidized the mortgage by lowering the interest
rate during the first few years of the loan. While the payments
are initially low, they will increase when the subsidy expires.
These are sometimes used to qualify borrowers for a loan
amount that they would not otherwise qualify for but will
be able to pay in subsequent years as their income increases.
- BUYER'S
MARKET
- Market where there is more
properties available for sale than interested buyers.
- BY-LAWS
- Rules and regulations governing
an association orcorporation.
- CAPITAL
GAINS
- Profit earned from a sale
of real estate.
- CAPITALIZATION
- A method used to estimate
value of a property based on the rate of return on investment.
- CASHFLOW
- The amount of cash derived
over a certain period of time from an income-producing property.
The cash flow should be large enough to pay the expenses
of the income producing property (mortgage payment, maintenance,
utilities, etc.)
- CAVEAT
EMPTOR
- Buyer beware. The buyer must
inspect the property and satisfy himself it is adequate
for his needs. The seller is under no obligation to disclose
defects but may not actively conceal a known defect or lie
if asked.
- CERTIFICATE
OF ELIGIBILITY
- The document given to qualified
veterans which entitles them to VA guaranteed loans for
homes, business, and mobile homes. certificates of eligibility
may be obtained by sending DD-214 (Separation Paper) to
the local VA office with VA form 1880 (request for Certificate
of Eligibility)
- CERTIFICATE
OF OCCUPANCY
- A certificate issued by a
local governmental body stating that the building is in
a condition to be occupied.
- CERTIFICATE
OF SATISFACTION
- A document signed by the
Noteholder and recorded in the land records evidencing release
of a DEED OF TRUST, MORTGAGE
or other lien on the property.
- CERTIFICATE
OF TITLE
- A written opinion by an attorney
setting forth the status of title to the property as shown
on the public records. The certificate does not certify
as to matters not of record and affords no protection unless
the author was negligent. Compare, TITLE
INSURANCE.
- CHAIN
OF TITLE
- The series of transactions
from GRANTOR to GRANTEE
as evidenced in the land records.
- CHATTEL
- Personal property.
- CLASS
ACTION
- A claim brought up on behalf
of a group of people.
- CLOSING
- The meeting between the buyer,
seller and lender or their agents where the property and
funds legally change hands. Also called settlement. closing
costs usually include an origination fee, discount points,
appraisal fee, title search and insurance, survey, taxes,
deed recording fee, credit
- CLOUD
ON TITLE
- An evidence of encumbrances.
- CC&R's
- Covenants, conditions, and
restrictions.
- The basic rules establishing
the rights and obligations of owners of real property within
a subdivision or other tract of land in relation to other
owners within the same subdivision or tract and in relation
to an association of owners organized for the purpose of
operating and maintaining property commonly owned by the
individual owners.
- COINSURANCE
- When more than one insurance
company shares the risk of a particular transaction or series
of transactions. Lenders may require co-insurance on large
commercial projects.
- COLLATERAL
- Property pledged to secure
a loan.
- CONDEMNATION
- Taking of private property
for a public use through exercise of the power of EMINENT
DOMAIN. The Constitution protects against taking without
fair compensation.
- CONDOMINIUM
- A system of individual FEE
SIMPLE ownership of portions (units) in a multi-unit
structure, combined with joint ownership of common areas.
Each individual may sell or encumber his own unit. Compare,
COOPERATIVE.
- CONSERVATOR
- Also called a Committee or
Guardian, a person designated by the Court to protect and
preserve the property of someone who is not able to manage
their own affairs. Examples include the mentally incompetent,
minors and incarcerated persons.
- CONSTRUCTION
LOAN
- A short term interim loan
to pay for the construction of buildings or homes. These
are usually designed to provide periodic disbursements to
the builder as he progresses. These are generally done by
lenders with offices local to the site of the construction.
This enables the lender or their agent to monitor the progress
of the construction.
- CONTRACT
- A legally enforceable agreement
between two parties.
- CONTRACT
FOR DEED
- Also known as a Land Contract
or Land Installment Contract. A method of financing where
title remains in the Seller's name until the Buyer has paid
the full purchase price. A Contract for Deed will normally
trigger the DUE ON SALE CLAUSE
in a DEED OF TRUST or MORTGAGE
but Veterans Administration regulations specifically allow
Contracts for Deed without invoking the DUE
ON SALE CLAUSE.
- CONVENTIONAL
LOAN
- A mortgage not insured by
FHA or guaranteed by the VA.
- COOPERATIVE
-
 A
system of individual ownership of stock in a corporation
that in turn, owns the structure. Each owner has an exclusive
right to use his individual unit and must pay his portion
of the debt encumbering the entire building. Compare, CONDOMINIUM.
- COST
APPROACH
- A method used by an appraiser
to estimate replacement cost of improvements less depreciation.
- COTENANCY
- Ownership in the same land
by more than one person. See, TENANTS
IN COMMON, JOINT TENANTS,
TENANTS BY THE ENTIRETY.
- COVENANT
- A written agreement or restriction
on the use of land or promising certain acts. Homeowner
Associations often enforce restrictive covenants governing
architectural controls and maintenance responsibilities.
However, land could be subject to restrictive covenants
even if there is no homeowner's association.
- CREDIT
REPORT
- A report documenting the
credit history and current status of a borrower's credit
standing.
- DEBT-TO-INCOME
RATIO
- The ratio, expressed as a
percentage, which results when a borrower's monthly payment
obligation on long-term debts is divided by his or her gross
monthly income. See housing expenses-to-income ratio.
- DEED
- The written document conveying
real property. The Deed must be executed (signed), ACKNOWLEDGED,
and DELIVERED to the Grantee. Once
recorded at the Courthouse, the original piece of paper
is not needed to convey title in the future.
- DEED
OF TRUST
- A voluntary lien to secure
a debt deeding the property to Trustees who foreclose, sell
the property at public auction, in the event of default
on the Note the Deed of Trust secures. Compare, MORTGAGE.
- DEFAULT
- Failure to meet legal obligations
in a contract, specifically, failure to make the monthly
payments on a mortgage.
- DEFERRED
INTEREST
- When a mortgage is written
with a monthly payment that is less than required to satisfy
the note rate, the unpaid interest is deferred by adding
it to the loan balance. Seenegative amortization
- DEFICIENCY
JUDGMENT
- If the foreclosure sale does
not bring sufficient proceeds to pay the costs of sale and
the note in full, the holder of the note may obtain a judgment
against the maker for the difference.
- DELIVERY
- The final, unconditional
and absolute transfer of a DEED to the
Grantee so that the Grantor may not revoke it. A Deed, signed
but held by the Grantor, does not pass title.
- DOWER
- A spouse's interest in the
property of a deceased spouse.
- DOWN
PAYMENT
- Money paid to make up the
difference between the purchase price and the mortgage amount.
- DUAL
AGENCY
- Representation of opposing
parties (buyer and seller) at the same time in the same
transaction. This situation most often refers to cases where
the Realtor is the agent for both parties.
- DUE
ON SALE CLAUSE
- A clause in the MORTGAGE
that makes the loan non-assumable by providing the noteholder
may call the loan immediately due and payable upon a sale
or conveyance of an interest in the property. The FNMA/FHLMC
form provides that a lease of more than three years or a
lease with an option to buy also triggers this provision.
- EARNEST
MONEY
- A good faith deposit.
- EASEMENT
- The right to use the land
of another for a specific limited purpose. Examples include
utility lines, driveways, and INGRESS
AND EGRESS. Easements can be temporary or permanent.
- EMINENT
DOMAIN
- The power of the state to
take private property for public use upon payment of just
compensation.
- ENCROACHMENT
- The physical intrusion of
a structure or improvement on the land of another. Examples
include a fence or driveway over the property line.
- ENCUMBRANCE
- Any lien, liability or charge
against a property.
- EQUAL CREDIT
OPPORTUNITY ACT
(ECOA)
- Is a federal law that requires
lenders and 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.
- EQUITY
- The difference between the
fair market value and current indebtedness, also referred
to as the owner's interest. The value an owner has in real
estate over and above the obligation against the property.
- EQUITY
SHARING
- A form of joint ownership
between an owner/occupant and an owner/investor. The investor
takes depreciation deductions for his share of the ownership.
The occupant receives a portion of the tax write-offs for
interest and taxes and a part of his monthly payment is
treated as rent. The co-owners divide the profit upon sale
of the property. Compare, JOINT
OWNERSHIP AGREEMENT.
- ESCHEAT
- Property that reverts to
the state when an individual dies without heirs and without
a will.
- ESCROW
- A disinterested third party
holds funds or documents on behalf of others and subject
to their instructions.
- EXECUTOR
- A person named in a will
to carry out its terms and administer the estate. The feminine
form is Executrix. Compare, ADMINISTRATOR.
- FEE
SIMPLE
- The absolute total interest
in real property. Compare, LIFE ESTATE,
REVERSION.
- FEDERAL HOME
LOAN MORTGAGE CORPORATION
- A affiliate of the Federal
Home loan Bank which creates a secondary money market in
conventional residential loans and in FHA and VA loans by
purchasing mortgage loans from members of the Federal Reserve
System and the Federal Home Loan Bank Systems.
- FIDUCIARY
RELATIONSHIP
- A relationship of trust and
confidence between principal and agent; lawyer and client;
doctor and patient; etc..
- FINANCING
STATEMENT
- Lenders record financing
statements to evidence personal property, such as a new
furnace, siding or windows, is subject to a lien.
- FIXTURE
- An item of personal property
attached to real property so that it can not be removed
without damage to the real property. A FIXTURE
becomes part of the real property.
- FORECLOSURE
- The process by which a lender
sells property securing a loan in order to repay the loan.
Under a DEED OF TRUST, foreclosure
is by public auction after appropriate advertisement. A
MORTGAGE may require the lender
to obtain Court approval prior to sale.
- FULLY
INDEXED NOTE RATE
- As related to adjustable
rate mortgages, the index value at the time of application
plus the gross margin stated in the note.
- GENERAL
WARRANTY DEED
- The Grantor warrants title
against all claims.
- GRANTEE
- The person receiving an interest
in property. Compare, GRANTOR
- GRANTOR
- The person granting, selling
or giving up an interest in property. Compare, GRANTEE.
- GRADUATED
PAYMENT MORTGAGE
(GPM)
- A type of flexible-payment
mortgage where the payments increase for a specified period
of time and then level off.
- GROSS
INCOME
- Income before expenses
- GROSS
MARGIN
- With regard to an adjustable
rate mortgage, an amount expressed as percentage points,
stated in the note which is added to the current index value
on the rate adjustment date to establish a new note rate.
- GROUND
LEASE
- The owner grants a long term
lease of the land (usually 99 years) and allows the lessee
to build and use the land as agreed. At the end of the term,
the land and all improvements revert to the owner.
- GUARDIAN
- One appointed by the Court
to administer the affairs of a minor. A guardian ad litem
is appointed to protect one's interest in a particular legal
action. See, CONSERVATOR.
- HAZARD
INSURANCE
- A form of insurance in which
the insurance company protects the insured from specified
losses, such as fire, windstorm and the like.
- HIATUS
- A gap or space left between
two parcels of land and not included in the legal description
of either parcel. Similar terms are Gaps and Gores.
- HOMESTEAD
DEED
- A declaration filed in the
land records that an individual is asserting his homestead
exemption. That exemption allows one to protect some assets
(amount varies by state) against the claims of creditors.
- HOUSING
RATIO
- The ratio, expressed as a
percentage, which results when a borrower's housing expenses
are divided by his/her gross monthly income. See debt-to-income
ratio.
- IMPOUND
- That portion of a borrower's
monthly payments held by the lender or servicer to pay for
taxes, hazard insurance, mortgage insurance, lease payments,
and other items as they become due. Also known as reserves.
- INCOME
APPROACH
- A method used by an appraiser
to estimate the value of a property by calculating it's
generated income.
- INDEMNITY
- A protection against actual
loss or damage as a result of the matter mentioned. An indemnity
is not an absolute guarantee that something won't happen,
it states the terms under which an actual loss will be compensated.
- INDEX
- A published interest rate
against which lenders measure the difference between the
current interest rate on an adjustable rate mortgage and
that earned by other investments (such as one- three-, and
five-year U.S. Treasury security yields, the monthly average
interest rate on loans closed by savings and loan institutions,
and the monthly average costs-of-funds incurred by savings
and loans), which is then used to adjust the interest rate
on an adjustable mortgage up or down.
- INGRESS
AND EGRESS
- Applied to EASEMENTS, meaning
the right to go in and out over a piece of property but
not the right to park on it.
- INSURABLE
TITLE
- Title subject to a defect
or claim which a title insurance company is willing to insure
against. Compare, MARKETABLE
TITLE.
- INSURED
CLOSING LETTER
- An Indemnity given to a lender
from a title insurance company, agreeing to be responsible
if the closing agent does not follow the lender's instructions
or misappropriates the loan proceeds. Lender's usually require
an insured closing letter be on file for each settlement.
- INTERIM
FINANCING
- A construction loam made
during completion of a building or a project. A permanent
loan usually replaces this loan after completion.
- INITIAL NOTE
RATE
- With regard to an adjustable
rate mortgage, the note rate upon origination. This rate
may differ from and is usually less than the fully indexed
rate.
- INTESTATE
- An estate without a Will.
Compare, TESTATE
- JOINT
OWNERSHIP AGREEMENT
- An agreement between owners
defining their rights, ownership, monetary obligations and
responsibilities. This could be between and investor and
an occupant or the occupants. If an investor is involved,
the investor does not take depreciation deductions and none
of the occupant's payment is deemed rent for tax purposes.
Compare, EQUITY SHARING.
- JOINT
TENANTS
- Two or more persons own a
property. Joint tenants with the common law right of survivorship
means the survivor inherits the property without reference
to the decedent's will. Creditors may sue to have the property
divided to settle claims against one of the owners. Compare,
TENANTS IN COMMON, TENANTS
BY THE ENTIRETY.
- JUDGMENT
LIEN
- A judgment is a lien against
all real property owned by the judgment debtor in the county
where the judgment is docketed (recorded).
- JUMBO
LOAN
- a loan which is larger (more
than $207,000 as of 1/1/96) than the limits set by the Federal
National Mortgage Association and the Federal Home
Loan Mortgage Corporation. Because jumbo loans cannot
be funded by these two agencies, they usually carry a higher
interest rate.
- JUNIOR
MORTGAGE
- Mortgage of lesser priority
than the prior recorded mortgage.
- LAND
CONTRACT
- See, CONTRACT
FOR DEED.
- LEASE
HOLD ESTATE
- Tenants right of possession
for a specific period of time under a lease agreement. (Common
in Hawaii.)
- LIEN
- A claim or charge against
property. Property is said to be encumbered by a lien and
the lien must be removed to clear title.
- LIFE CAP
- With regard to an adjustable
rate mortgage, a ceiling the note rate cannot exceed over
the life of the loan.
- LIFE
ESTATE
- The right to use, occupy
and own for the life of an individual. Compare, FEE
SIMPLE.
- LOAN-TO-VALUE
RATIO (LTV)
- The relationship between
the amount of the mortgage loan and the appraised value
of the property expressed as a percentage.
- LIS
PENDENS
- Recorded document showing
a pending litigation filed in the court. These show up on
the preliminary title report and must be dealt with when
transferring ownership or refinancing.
- LOAN
APPLICATION
- The loan application is the
source of information on which the lender bases a decision
to make the loan; defines the term of the loan, gives the
name(s) of the borrower(s) , place of employment, salary,
bank accounts and credit references, and describes the real
estate that is to be mortgaged. It also stipulates the amount
of the loan being applied for and the repayment terms.
- MAJORITY
- The age at which a person
may handle his own affairs.
- MARGIN
- The amount a lender adds
to the index on an adjustable rate mortgage to establish
the adjusted interest rate.
- MARKETABLE
TITLE
- Title without defects or
claims so as to be readily accepted without fair or reasonable
doubt. Compare, INSURABLE TITLE.
- MARKET
VALUE
- The highest price that a
buyer would pay and the lowest price a seller would accept
on a property. Market value may be different from the price
a property could actually be sold for at a given time.
- MECHANIC'S
LIENS
- The right of an unpaid contractor,
laborer or supplier to file a lien against property to recover
the value of his work
- METES
AND BOUNDS
- A means of describing land
by directions and distances rather than reference to a lot
number. Generally used when land has not been subdivided
into lots.
- MORTGAGE
- A voluntary lien filed against
property to secure a debt, usually a loan. To foreclose,
the lender must often institute a court action and the borrower
may have the right to reclaim the property after foreclosure.
Compare, DEED OF TRUST.
- MORTGAGE
INSURANCE
- Money paid to insure the
mortgage when the down payment is less than 20 percent.
See private mortgage insurance, FHA mortgage insurance.
- MORTGAGEE
- The lender
- MORTGAGOR
- The borrower or homeowner
- NEGATIVE
AMORTIZATION
- Occurs when your monthly
payments are not large enough to pay all the interest due
on the loan. This unpaid interest is added to the unpaid
balance of the loan. the danger of negative amortization
is that the home buyer ends up owing more than the original
amount of the loan.
- NET
EFFECTIVE INCOME
- The borrower's gross income
minus federal income tax.
- NET WORTH
- The difference between total
assets and total liabilities.
- NON
ASSUMPTION CLAUSE
- A statement in a mortgage
contract forbidding the assumption of the mortgage without
the prior approval of the lender. Note: The signed obligation
to pay a debt, as a mortgage note.
- NON-PERFORMING
LOAN
- A loan in default, usually
referred by lenders to pending foreclosures.
- NOTE
- A written promise to pay
a certain sum of money at a certain time. A negotiable note
starts"Pay to the order of" and is transferable
by endorsement similar to a check.
- NOTARY
PUBLIC
- One authorized by law to
acknowledge and certify documents and signatures.
- OFFER
- A proposal; after acceptance
it becomes a contract.
- OPTION
- A right given for a consideration
to keep an offer to purchase or lease open for specific
time.
- PARTITION
- The forced division of land
among parties who were formerly co-owners. A partition suit
may ask to divide the land or if that is not practical,
sell the land and divide the proceeds.
- PAY-OFF
AMOUNT
- A total balance, amount of
a full payment on existing loan or lien.
- PLAT
- A map showing the division
of piece of land with lots, streets and, if applicable,
common area.
- PIPESTEM
LOT
- A lot connected to a public
street by a narrow strip of land. Usually several adjacent
pipestems are combined to form one driveway with each owner
having a mutual-reciprocal easement to use and maintain
the driveway to the street.
- PITI
- Principal, Interest, Taxes
and Insurance. Also called monthly housing expense.
- POINTS
(loan discount points)
- Prepaid interest assessed
at closing by the lender. Each point is equal to 1 percent
of the loan amount (e.g., two points on a $100,000 mortgage
would cost $2,000).
- POWER
OF ATTORNEY
- A written document authorizing
another to act on his behalf as an ATTORNEY
IN FACT. One does not need to be a licensed attorney
to act as an attorney in fact but, power of attorney forms
are powerful legal documents that should be used only under
advice of a licensed attorney at law.
- PREPAYMENT
PENALTY
- An additional charge imposed
by the lender for paying off a loan before the due date.
- PRIME
RATE
- The most favorable interest
rate charged by lenders on a short term loans to qualified
customers.
- PRIVATE MORTGAGE
INSURANCE (PMI)
- In the event that you do
not have a 20 percent down payment, lenders will allow a
smaller down payment - as low as 3 percent in some cases.
With the smaller down payment loans, however, borrowers
are usually required to carry private mortgage insurance.
Private mortgage insurance will usually require an initial
premium payment and may require an additional monthly fee
depending on you loan's structure.
- PROBATE
- Court process to prove a
valid will.
- PROMOSSORY
NOTE
- A written unsecured note
promising to pay a specified amount of money on demand,
transferable to a third party.
- PUBLIC
SALE
- Sale, auction open to the
public.
- PURCHASE MONEY
MORTGAGE (PMM)
- Seller financing as a part
of the purchase price.
- QUIET
TITLE
- A suit brought to remove
a claim or objection on title.
- QUITCLAIM
DEED
- A deed releasing whatever
interest you may hold in a property but making no warranty
whatsoever. Compare, SPECIAL
WARRANTY DEED and GENERAL
WARRANTY DEED
- REALTOR
- A member of National Association
of Realtors.
- REISSUE
RATE
- A discounted rate for title
insurance when the title was previously insured with an
owner's title insurance policy issued within the last ten
years.
- RECISION
- The cancellation of a contract.
With respect to mortgage refinancing, the law that gives
the homeowner three days to cancel a contract in some cases
once it is signed if the transaction uses equity in the
home as security.
- RECORDING
FEES
- Money paid to the lender
for recording a home sale with the local authorities, thereby
making it part of the public records.
- REFINANCE
- Obtaining a new mortgage
loan on a property already owned. Often to replace existing
loans on the property.
- REMAINDER
- An interest in land that
is postponed until the termination of some other interest
such as a LIFE ESTATE. Compare,
FEE SIMPLE.
- RESPA
- short for the Real Estate
Settlement Procedures Act. RESPA is a federal law that allows
consumers to review information on known or estimated settlement
cost once after application and once prior to or at a settlement.
The law requires lenders to furnish the information after
application only.
- REVERSION
- A provision in a conveyance
that the land will return to the grantor upon the happening
of an event or contingency. Compare, FEE
SIMPLE.
- RIPARIAN
RIGHTS
- The rights of an owner of
land adjacent to water.
- SBA
- Small Business Administration.
- SECONDARY
MARKET
- A market for the purpose
of purchase and sale of existing mortgages usually at discounted
prices to provide greater liquidity to the mortgagee/lender.
- SECOND
MORTGAGE
- A mortgage recorded after
a First mortgage, ranks second in priority.
- SPECIAL
ASSESSMENT
- Additional tax imposed by
the local government for public improvements such as new
streets, etc..
- SPECIAL
WARRANTY DEED
- The seller warrants he has
done nothing to impair title but makes no warranty before
his ownership. Compare, GENERAL
WARRANTY DEED and QUITCLAIM
DEED.
- SPECIFIC
PERFORMANCE
- A legal action to complete
the performance of a contract.
- STATUTE
OF LIMITATIONS
- The time period to file a
law suit to enforce a claim or it is barred by law.
- SUBDIVISION
- Dividing land into lots and
streets. The owner signs a PLAT and
Deed of Resubdivision which is recorded among the land records.
The state and county have strict requirements for subdivision
of land.
- SUBJECT
TO
- Taking title to property
with a lien but not agreeing to be personally responsible
for the lien. If the holder who forecloses the lien can
take the property but may not collect any money from the
owner who took "subject to." Compare, ASSUMPTION.
- TENANTS
BY THE ENTIRETY
- A husband and wife own the
property with the common law right of survivorship so, if
one dies, the other automatically inherits. One may not
sue the other to PARTITION the
property. A creditor of one may not claim the property or
the proceeds of sale. Compare, TENANT
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