A mortgage with periodic payments that do
not fully amortize the loan. The outstanding balance of the
mortgage is due in a lump sum at the end of the
A short-term loan secured by the equity in
an as-yet-unsold house, with the funds to be used for a down
payment and/or closing costs on a new house. There is no
payment of principal until the house is sold or the end of the
loan term, whichever comes first. Interest payments may or may
not be deferred until the house is sold.
The person who, for a commission or a fee,
brings parties together and assists in negotiating contracts
Money advanced by an individual (e.g.
builder, seller, buyer, lender, developer) to lower monthly
mortgage payments for a few years or the whole
The maximum interest rate increase allowable
on an adjustable rate mortgage. Does not result in negative
amortization. See Negative amortization.
Cap (payment rate)
The maximum payment amount increase
allowable on an adjustable rate mortgage. May result in
negative amortization. See Negative amortization.
A statement that shows ownership of
property, stating that the seller has clear legal
The concluding day of the real estate
transaction, when title and deed pass from seller to buyer,
the buyer signs the mortgage and pays the purchase price and
Expenses (over and above the price of the
property) incurred by buyers and sellers in transferring
ownership of a property. Also called "settlement
A financial disclosure giving an account of
all funds received and expected at closing, including the
escrow deposit for taxes, hazard insurance and mortgage
insurance for the escrow account.
An agent's or broker's fee for bringing the principals together and helping
to negotiate a real estate transaction, often a percentage of the sales price
or flat fee.
An agreement, frequently in writing, between
a lender and a borrower to loan money at a future date,
subject to certain conditions.
Refers to similar properties used for
comparison purposes in the appraisal process. These properties
will be reasonably the same size and location, with similar
amenities and characteristics, so that the approximate fair
market value of the subject property can be
Ownership of a single unit in a multiunit
building or complex of buildings. Along with this goes a share
of ownership of the common areas.
A condition that must be met for a contract
or a commitment to remain binding.
Any mortgage loan that is not insured by
FHA, guaranteed by VA, of funded by a government authorized
bond sale or grant.
To transfer real estate from one person to
The report to a prospective lender on the
credit standing of a prospective borrower.
The deposit money given to seller or his
agent by the potential buyer at the time of the purchase
offer. If the offer is accepted, the money will become part of
the down payment.
A right to the limited use of land owned by
another. An electric company, for example, could have an
easement to put up electric power lines over someone's
Anything that affects or limits the title to
a property, such as outstanding mortgages, easement rights or
unpaid back taxes.
The value in which the owner has in real
estate over and above the mortgages against it. When the
mortgage and all other debts against the property are paid in
full, the owner has 100% equity in his property.
Funds and/ or deed left in trust to a third
party. Generally, a portion of the monthly mortgage payment is
held in escrow by the lender to pay for taxes, hazard
insurance and yearly mortgage insurance premiums.
A fixed rate loan with monthly payments that
start low, increasing by a fixed amount for a specific number
of years. After that period, the payments typically remain
constant for the duration of the loan.
Normal income, including overtime, prior to
any taxes or payroll deductions, that is regular and
dependable. This income may come from more than one
When the buyer agrees to make payments
directly to the seller at pre-negotiated terms. The seller
agrees to deed the property to the buyer upon completion of
the agreement. The buyer becomes the owner of equity in this
type of sale. (Also see Owner Financing)
A legal claim on a property used as security
for a debt.
The relationship between the amount of the
mortgage and property value, usually shown as a
An acronym for payments to lender that cover
principal, interest, taxes and insurance on a
A map of a piece of land showing boundary
lines, streets, actual measurements and
A fee paid to the lender on closing day to
increase the effective yield of the mortgage. A point is one
percent of the amount of the mortgage loan. Also called a
A charge paid to the lender by the borrower
if a mortgage loan is repaid before its term is
A commitment by a lender to extend credit
provided that specific conditions are met.
A preliminary assessment of a buyer's
ability to secure a loan, based on a specific set of lending
guidelines and buyer representations made. This is not a
guarantee or commitment by a lender to extend
The interest rate charged by banks to their
preferred corporate customers, it tends to be an estimator for
general trends in short term interest rates.
The amount borrowed or remaining unpaid;
also, that part of the monthly payment that reduces the
outstanding balance of a mortgage.
PMI (Private Mortgage
Insurance written by a private company to
protect the lender against loss caused by mortgage