Glossary

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GLOSSARY OF MORTGAGE TERMS

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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

Adjustable Rate -
An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

Adjustment Date -
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

Adjustment Period -
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

Agency -
The relationship of trust that exists between buyers or sellers and their agents. The agency is formed via a written contract

Amortized Loan -
A repayment method in which the amount you borrow is repaid gradually though regular monthly payments of principal and interest. During the first few years, most of each payment is applied toward the interest owed. During the final years of the loan, payment amounts are applied almost exclusively to the remaining principal.

Annual Membership -
An amount that may be charged annually for having a line of credit available. Often charged regardless of whether or not you use the line. Also referred to as a "participation fee."

Annual Percentage Rate (APR) -
The cost of credit on a yearly basis, expressed as a percentage. Required to be disclosed by the lender under the federal Truth in Lending Act, Regulation Z. Includes up front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Does not include title insurance, appraisal, and credit report.

Antitrust Laws -
Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition.  Most violations of antitrust laws in the real estate business involve either price-fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or markets (broker agreeing to limit their areas of trade or dealing to certain areas or properties).

Application Fee -
Fees that are paid upon application. An application fee may frequently include charges for property appraisal ($200-$400) and a credit report ($30-50).

Application -
An initial statement of personal and financial information which is required to approve your loan.

Appraisal -
An estimate of the quantity, quality or value of something.  The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.  Required by most lenders to obtain a loan.

Appraised Value -
A licensed appraiser's opinion of the current market value of a property.

Assessed Value -
A tax assessor's determination of the value of a home in order to calculate a tax base.

Appreciation -
An increase in the worth or value of a property due to changes in market conditions or other causes. The opposite of depreciation.

Appurtenance -
A right, privilege or improvement belonging to, and passing with, the land.

Appurtenant Easement -
An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land.

Assessment -
The imposition of a tax, charge or levy, usually according to established rates.

Asset -
Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).

Assignment -
The transfer in writing of interest in a bond, mortgage, lease or other instrument.

Assumption Clause -
A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property.

Assumption Fee -
The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.

Assumption of Mortgage -
The agreement of a purchaser to become primarily liable for the payments on a mortgage loan. Unless otherwise specified by the lender, the seller may remain secondarily liable for payments.

Attachment -
The act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor.

Avulsion -
The sudden tearing away of land, as by earthquake, flood, volcanic action or the sudden change in the course of a stream.


Balloon Mortgage -
A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term.

Balloon Payment -
A lump sum payment for the unpaid balance of the loan.

Bankrupt -
A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.

Bankruptcy -
A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring his or her assets to a trustee.

Bargain and Sale Deed -
A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title.  The grantor may add warranties to the deed at this or her discretion.

Base Line -
The main imaginary line running east and west and crossing a pricnipal meridian at a definite point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.

Basis Point -
A basis point is 1/100th of a percentage point. For example, a fee calculated as 50 basis points of a loan amount of $100,000 would be 0.50% or $500.

Before-tax Income -
Income before taxes are deducted.

Bench mark -
A permanent reference mark or point established for use by surveyors in measuring differences in elevation.

Beneficiary -
The person designated to receive the income from a trust, estate, or a deed of trust.

Binder -
A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.

Biweekly Payment Mortgage -
A mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage, and they are usually drafted from the borrower's bank account. The result for the borrower is a substantial savings in interest.

Blanket Mortgage -
The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.

Bond -
An interest-bearing certificate of debt with a maturity date. An obligation of a government or business corporation. A real estate bond is a written obligation usually secured by a mortgage or a deed of trust.

Breach -
A violation of any legal obligation.

Bridge Loan -
A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as "swing loan."

Breezeway -
A roofed passage way with open sides.

Broker -
A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.

Buy Down Mortgage -
A temporary buy down is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower's monthly payments during the first few years of a mortgage. A permanent buy down reduces the interest rate over the entire life of a mortgage.


Cap -
The maximum allowable increase, for either payment or interest rate, for a specified amount of time on an adjustable rate mortgage.

Capital Improvement
Any improvement that extends the life or increases the value of a piece of property.

Comparable sales -
Recent sales of similar properties in nearby areas and used to help determine the market value of a property. Also referred to as "comps."

Cash Out -
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.

Ceiling -
The maximum allowable interest rate over the life of the loan of an adjustable rate mortgage.

Certificate of Eligibility -
A document issued by the federal government certifying a veteran's eligibility for a Department of Veterans Affairs (VA) mortgage.

Certificate of Reasonable Value (CRV) -
A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a VA mortgage.

Certificate of Title -
A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner.

Chain of Title -
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

Change Frequency -
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).

Clear Title -
Real property ownership that is clear of any liens, defects, encumbrances or claims.

Closing Costs -
Any fees paid by the borrowers or sellers during the closing of the mortgage loan. This normally includes an origination fee, discount points, attorney's fees, title insurance, survey, and any items which must be prepaid, such as taxes and insurance escrow payments.

Closing Statement -
A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made and all cash paid out in the transaction.

Cloud on Title -
Any document, claim, unreleased lien or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quitclaim deed or suit to quiet title.

Co-maker -
A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment. See endorser.

Collateral -
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

Collection -
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.

Combination Loan -
With this type of loan, you receive a first mortgage for 80 percent of the loan amount, and a second mortgage at the same time for the remainder of the balance. If avoiding PMI (mortgage insurance) is important to you, consider combination loans-known as 80/10/10 loans or 80/20's.

Combined loan-to-value (CLTV) -
The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value.

Commission -
The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a percentage of the price of the property or loan.

Commitment Letter -
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also known as a "loan commitment."

Common Areas -
Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

Comparable Sales -
Comparables help the appraiser determine the approximate fair market value of the subject property. They are properties like the property under consideration; they have reasonably the same size, location  and amenities and have recently been sold. Also referred to as "comps."

Condominium -
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.

Condominium conversion -
Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

Conforming Loan -
Generally, a mortgage loan under $203,150. Qualifying ratios and underwriting methods are standardized to a large degree.

Contingency -
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

Contract -
An oral or written agreement to do or not to do a certain thing.

Contract of Sale -
The agreement between the buyer and seller on the purchase price, terms, and conditions necessary to both parties to convey the title to the buyer.

Conventional mortgage -
A mortgage that is not insured or guaranteed by the federal government.

Convertibility clause -
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified timeframes after loan origination.

Convertible ARM -
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.

Counter Offer -
A new offer made in response to an offer received.  It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.

Credit History -
A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.

Credit Limit -
The maximum amount that you can borrow under a home equity plan.

Credit Report -
A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.

Credit -
An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.


Debt Service -
The total amount of credit card, auto, mortgage or other debt upon which you must pay each month.

Deed -
A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

Deed in Lieu of Foreclosure -
A deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

Deed of Trust -
Used in many western states, the agreement used to pledge your home or other real estate as security for a loan. Similar to a mortgage.

Default -
Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

Delinquency -
Failure to make mortgage payments when mortgage payments are due.

Deposit -
A sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.

Depreciation -
A decline in the value of property; the opposite of appreciation.

Discount Points (or Points) -
The amount paid either to maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000).

Down Payment -
The difference between the purchase price and that portion of the purchase price being financed. Most lenders require the down payment to be paid from the buyer's own funds. Gifts from related parties are sometimes acceptable, and must be disclosed to the lender.

Dry Rot -
Decay of seasoned wood caused by fungus.

Due on Sale -
A clause in a mortgage agreement providing that, if the mortgagor (the borrower) sells, transfers, or, in some instances, encumbers the property, the mortgagee (the lender) has the right to demand the outstanding balance in full.


Earnest Money Deposit -
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Easement -
A right of way giving persons other than the owner access to or over a property. Such as to place power lines, pipe lines or roads.

Effective Age -
An appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

Effective Interest Rate -
The cost of credit on a yearly basis expressed as a percentage. Includes upfront costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Useful in comparing loan programs with different rates and points.

Encumbrance -
A claim against a property by another party which usually affects the ability to transfer ownership of the property.

Energy Star -
A joint program through the U.S. Environmental Protection Agency and the U.S. Department of Energy that sets energy efficiency guidelines for products, homes and businesses.

Equity -
The difference between the fair market value (appraised value) of your home and your outstanding mortgage balance.

Escrow -
An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.

Escrow account -
The trust account in which escrow funds are held.

Escrow analysis -
The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance, and other bills when due.

Escrow collections -
Funds collected by the servicer and set aside in an escrow account to pay the borrower's property taxes, mortgage insurance, and hazard insurance.

Escrow disbursements -
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

Escrow payment -
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Known as "impounds" or "reserves" in some states.


FHA Loan -
More appropriately termed "FHA Insured Loan." A loan for which the Federal Housing Administration insures the lender against losses the lender may incur due to your default.

Fair Credit Reporting Act -
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Fair Market Value -
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

Fannie Mae's Community Home Buyer's Program -
An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income family's buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.

Fannie Mae -
A congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds.

First Mortgage -
A mortgage which is in first lien position, taking priority over all other liens (which are financial encumbrances).

Fixed Rate -
An interest rate which is fixed for the term of the loan. Payments as well are fixed at one amount.

Fixtures -
Those parts of a property affixed to structures or land, usually in such a manner that they cannot be independently moved without damage to themselves or the property housing supporting or pertinent to them. Fixtures are usually included in a sale and commonly include but are not limited to items such as carpets and awnings

Foreclosure -
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

Full Disclosure -
In real estate, revealing all the known facts which may affect the decision of a buyer or tenant. A broker must disclose identified defects in the property for sale or lease.

Fully Amortized ARM -
An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.


Ginnie Mae -
Government National Mortgage Association. This is the federal association that works in conjunction with the FHA to offer special assistance in obtaining mortgages and purchases mortgages in the secondary market

Good Faith Estimate -
A written estimate of closing costs which a lender must provide you within three days of submitting an application.

Grace Period -
A period of time during which a loan payment may be paid after its due date but not incur a late penalty. Such late payments may be reported on your credit report.

Grantee -
A person who receives a conveyance of real property from a grantor.

Grantor -
The person transferring title to or an interest in real property to a grantee.

Green building -
Also known as sustainable building or environmental building, this definition varies depending on the agency or group. Generally it means to construct a building to the highest environmental standards by minimizing the use of energy, water and materials. A green building, for example, might have skylights, recycled building materials and solar panels.

Gross Income -
For qualifying purposes, the income of the borrower before taxes or expenses are deducted.


HUD I Settlement Statement a/k/a Closing Statement -
A form utilized at loan closing to itemize the costs associated with purchasing the home. Used universally by mandate of HUD, the Department of Housing and Urban Development.

Hazard Insurance a/k/a Homeowner's Insurance Policy -
A contract between purchaser and an insurer, to compensate the insured for loss of property due to hazards (fire, hail damage, etc.), for a premium.

Home Equity Line of Credit -
A loan providing you with the ability to borrow funds at the time and in the amount you choose, up to a maximum credit limit for which you have qualified. Repayment is secured by the equity in your home. Simple interest (interest-only payments on the outstanding balance) is usually tax-deductible. Often used for home improvements, major purchases or expenses, and debt consolidation.

Home Equity Loan -
A fixed or adjustable rate loan obtained for a variety of purposes, secured by the equity in your home. Interest paid is usually tax -deductible. Often used for home improvement or freeing of equity for investment in other real estate or investment. Recommended by many to replace or substitute for consumer loans whose interest is not tax-deductible, such as auto or boat loans, credit card debt, medical debt, and education loans.


Index -
A number, usually a percentage, upon which future interest rates for adjustable rate mortgages are based. Common indexes include the Cost of Funds for the Eleventh Federal District of banks or the average rate of a one year Government Treasury Security.

Ingress -
The entry point to a property.

Interest Rate -
The periodic charge, expressed as a percentage, for use of credit.


Jumbo Loan -
Mortgage loans over $203,150. Terms and underwriting requirements may vary from conforming loans.


LIBOR -
London Interbank Offered Rate. It's similar to our fed funds rate, in that it represents the rate at which banks are willing to loan each other reserves. Unlike fed funds, which represents the rate on an overnight loan between banks, LIBOR is quoted for specific maturities. A lot of floating-rate debt is priced off the LIBOR yield curve. It's an international standard for interest rates. LIBOR is quoted as one-month, three- month, six-month and one-year rates.

Leasehold Estate -
This arrangement allows the borrower to possess a property on a long-term lease but the borrower does not own the specific piece of property.

Loan Underwriting -
The decision whether to make a loan to a potential home buyer based on credit, employment, assets and other factors and the matching of this risk to an appropriate rate and term or loan amount.

Loan to Value Ratio (LTV) -
A ratio determined by dividing the sales price or appraised value into the loan amount, expressed as a percentage. For example, with a sales price of $100,000 and a mortgage loan of $80,000, your loan to value ratio would be 80%. Loans with an LTV over 80% may require Private Mortgage Insurance, defined below.

Lock or Lock In -
A commitment you obtain from a lender assuring you a particular interest rate or feature for a definite time period. Provides protection should interest rates rise between the time you apply for a loan, acquire loan approval, and, subsequently, close the loan and receive the funds you have borrowed.


Margin -
An amount, usually a percentage, which is added to the index to determine the interest rate for adjustable rate mortgages.

Maximum Financing -
A property mortgage given by a lender with the lowest permissible down payment.

Minimum Payment -
The minimum amount that you must pay, usually monthly, on a home equity loan or line of credit. In some plans, the minimum payment may be "interest only," (simple interest). In other plans, the minimum payment may include principal and interest (amortized).

MLS (Multiple Listing Service) -
An MLS is an organization that collects, compiles and distributes information about homes listed for sale by its members, who are real estate brokers. MLS's are local or regional.

Mortgage Banker -
Originates mortgage loans, loaning you their funds and closing the loan in their name.

Mortgage Broker -
As do mortgage bankers, takes loan application and processes the necessary paperwork. Unlike a mortgage banker, brokers do not fund the loan with their own money, but work on behalf of several investors, such as mortgage bankers, S and L's, banks, or investment bankers.

Mortgage Insurance (MIP or PMI) -
Insurance purchased by the borrower to insure the lender or the government against loss should you default. MIP, or Mortgage Insurance Premium, is paid on government-insured loans (FHA or VA loans) regardless of your LTV (loan-to-value). Should you pay off a government-insured loan in advance of maturity, you may be entitled to a small refund of MIP. PMI, or Private Mortgage Insurance, is paid on those loans which are not government-insured and whose LTV is greater than 80%. When you have accumulated 20% of your home's value as equity, your lender may waive PMI at your request. Please note that such insurance does not constitute a form of life insurance which pays off the loan in case of death.

Mortgage Loan -
A loan which utilizes real estate as security or collateral to provide for repayment should you default on the terms of your loan. The mortgage or Deed of Trust is your agreement to pledge your home or other real estate as security.

Mortgagee -
The lender in a mortgage loan transaction.

Mortgagor -
The borrower in a mortgage loan transaction.


Negative Amortization -
Amortization in which the payment made is insufficient to fund complete repayment of the loan at its termination. Usually occurs when the increase in the monthly payment is limited by a ceiling. The portion of the payment which should be paid is added to the remaining balance owed. The balance owed may increase, rather than decrease over the life of the loan.


PITI -
Principal, interest, taxes and insurance, which comprise your monthly mortgage payment.

Points -
The amount paid either to maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000).

Prepayment Penalty -
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule. A fee paid to the lending institution for paying a loan prior to the scheduled maturity date.

Principal -
Amount of debt, not including interest. The face value of a note or mortgage.

Private Mortgage Insurance (PMI) -
Insurance provided by non-government insurers that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages greater than 80%.


Qualifying Ratios -
Comparisons of a borrower's debts and gross monthly income.


Right to Rescission -
The legal right to void or cancel your mortgage contract in such a way as to treat the contract as if it never existed. Right of rescission is not applicable to mortgages made to purchase a home, but may be applicable to other mortgages, such as home equity loans.


Security Interest -
An interest that a lender takes in the borrower's property to assure repayment of a debt.

Seller Carry Back -
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage.

Servicing a Loan -
The on-going process of collecting your monthly mortgage payment, including accounting for and payment of your yearly tax and/or homeowners insurance bills.

Short Sale -
A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency.[1] Short sale agreements do not necessarily release borrowers from their obligations to repay any defiencies of the loans, unless specifically agreed to between the parties.

A short sale is often used as an alternative to foreclosure, which mitigates additional fees and costs to both the creditor and borrower. A short sale will often result in a negative credit report against the property owner, however it is less damaging than a foreclosure report.

Specific performance -
A legal action to compel a party to carry out the terms of a contract.

Square Foot Method -
The appraisal method of estimating building costs by multiplying the number of square feet in the improvements being appraised by the cost per square foot for recently constructed similar improvement.

Stated/documented income -
Some loan products require only that applicants "state" the source of their income without providing supporting documentation such as tax returns.

Survey -
A print showing the measurements of the boundaries of a parcel of land, together with the location of all improvements on the land and sometimes its area and topography.


Tenancy In Common -
An ownership which allows two or more people to have undivided interests in a property. There is no right of survivorship as in Joint Tenancy. Upon death of one of the owners, their interest passes to his or her heirs.

Time Is Of The Essence -
A standard statement in a contract which ensures that all dates and times of day noted in the contract are important and cannot be ignored by any of the parties without the consent of the others except in breach of the contract.

Title Defect -
Any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership or a material irregularity in the execution or effect of an instrument in the chain of title.

Title Insurance -
Protection for lenders or homeowners against financial loss resulting from legal defects in the title.

Title -
The written evidence that proves the right of ownership of a specific piece of property.

Total Debt Ratio -
Monthly debt and housing payments divided by gross monthly income. Also known as Obligations-to-Income Ratio or Back-End Ratio.

Transaction Fee -
A fee which may be charged each time you draw on a home equity credit line.

Truth-in-Lending Act -
A federal law requiring a disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.


Underwriting -
The process of verifying data and approving a loan.


VA Loan -
More appropriately termed "VA Insured Loan." A loan for which the Veteran's Administration insures the lender against losses the lender may incur due to your default. Available only to veterans possessing a Certificate of Eligibility.

Variable Rate -
An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

Variance -
Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances.


Warranty -
An agreement or undertaking by the seller to be responsible for present or future losses of the purchaser occasioned by deficiency or defect in the quality, condition or quantity of the property. This is usually done through an insurance policy that covers a specific area or mechanicals of the property.

Weep Holes -
Spaces or small openings that are left in a masonry wall during construction. Weep holes allow water to drain from behind the wall.


Zoning -
Laws passed by local governments to regulate the size, type, structure, nature and use of land or buildings.