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Real Estate Lexicon

A B C D E F G H I K L M N O P Q R S T U V W Y Z

A

Acceleration clause
A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender.

Adjustable-rate mortgage (ARM)
A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARM's are tied to indexes.

Adjustment date
The date the interest rate changes on an adjustable-rate mortgage.

Amortization
The process of paying the principal and interest on a loan through regularly scheduled installments.

Amortization schedule
A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.

Annual percentage rate (APR)
The cost of the loan expressed as a yearly rate on the balance of the loan.

Appraisal
A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.

Appreciation
The increase in the value of a property due to changes in market conditions, inflation, or other causes.

Assessment
The placing of a value on property for the purpose of taxation.

Assumable mortgage                                                                                                                                A mortgage that can be assumed by the buyer when a home is sold. Usually, the borrower must "qualify" in order to assume the loan.

 

 

B

Balloon mortgage
A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.

Balloon payment
The final lump sum payment that is due at the termination of a balloon mortgage.

Bill of Sale
A written document by which one person transfers the personal property to another.

Blanket Mortgage
A single mortgage that covers more than one property owned by the same borrower.

Broker / Real Estate Broker                                                                                                                   An agent employed by another, for a fee, to carry on the activities listed in the license law definition of the word. A Real Estate Broker is any person who, for another and for compensation, provides a real estate service. The business of a broker is referred to as brokerage.

C

Cancellation clause
A clause that details the conditions under which each party may terminate the agreement.

Certificate of title
A certificate of title provides documentary evidence of the right of ownership. The certificate of title is a statement of opinion on the status of the title, based on a thorough examination of specified public records.

Certificate of Eligibility
A document issued by the Veterans Administration that certifies a veteran's eligibility for a VA loan.

Chain of title
The official record that details the ownership history of a piece of property.

Clear title
A title that is free of liens or legal questions as to ownership of the property.

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
A document which details the final financial settlement between a buyer and seller and the costs paid by each party.
 
Cloud on title
Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by deed, release, or court action.

Condemnation
The process the government uses to take private property for public use without the consent of the owner.

Commission
The compensation paid to a real estate broker for services rendered in connection with the sale, purchase, or lease of real estate property.

Contract

A legally enforceable agreement, either written or oral, between two or more parties to do or not to do certain things. Contracts for the sales of real estate property, for mortgages etc. are contract which must be in writing.

Conventional mortgage
Refers to home loans other than government loans (VA and FHA).

Conveyance
A written instrument be which title to an interest in real estate is transferred.

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

Creditor
A person to whom money is owed.



D

Debt  
Any amount one person owes to another.

Deed
A written document, which when signed, delivered, and accepted transfers an ownership interest in real estate from one party on another party.

Default
The failure to fulfill a duty or promise or discharge an obligation, such as making the mortgage payment within a specified period of time.

Defeasance Clause
One that states the mortgages is defeated if the borrower repays the accompanying promissory note on time.

Depreciation
The decline in value of a piece of property through ordinary wear and usage, or by functional or economic obsolescene.

Down payment
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.