Real Estate Glossary
ABSORPTION RATE Back
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The ratio of the number of properties in an area that have been
sold against the number available. Used to show the volatility
of a market.
ABSTRACTION METHOD Back
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This method of estimating the value of property uses similar
properties available in the same market to extract the value of
a parcel of land.
ACCELERATION CLAUSE Back
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A provision in a mortgage that gives the lender the right to
demand immediate payment of the outstanding loan balance under
certain circumstances. Usually when the borrower defaults on the
loan.
ACCESSORY BUILDING Back
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A building separate from the main structure on a property. Often
used for a specific purpose, such as a workshop, storage shed or
garage.
ACCRETION Back
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The natural growth of a piece of land resulting from forces of
nature
ACRE Back
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43,560 square feet. A measurement of area.
ACTUAL AGE Back
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The amount of time that has passed since a building or other
structure was built. See also: EFFECTIVE AGE
ADJUSTMENT DATE Back
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The date the interest rate changes on an adjustable rate
mortgage.
AD VAL OREM TAX Back
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Taxes assessed based on the value of the land and improvements
ADDENDUM Back
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A supplement to any document that contains additional
information pertinent to the subject. Appraisers use an addendum
to further explain items for which there was inadequate space on
the standard appraisal form.
ADJUSTABLE-RATE MORTGAGE (ARM) Back
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A type of mortgage where the interest rate varies based on a
particular index, normally the prime lending rate.
ADJUSTED BASIS Back
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The value of an asset (property or otherwise) that includes the
original price plus the value of any improvement, and less any
applicable depreciation.
ADJUSTED SALES PRICE Back
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An opinion of a property's sales price, after adjustments have
been made to account for differences between it and another
comparable property.
AESTHETIC VALUE Back
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The additional value a property enjoys based on subjective
criteria such as look or appeal.
AFFIRMATION Back
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A declaration that a certain set of facts are truthful.
AFFORDABILITY ANALYSIS Back
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A calculation used to determine an individual's likelihood of
being able to meet the obligations of a mortgage for a
particular property. Takes into account the down payment,
closing costs and on-going mortgage payments.
AGENT Back
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A person who has been appointed to act on behalf of another for
a particular transaction.
AMENITY Back
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Any feature of a property that increases its value or
desirability. These might include natural amenities such as
location or proximity to mountains, or man-made amenities like
swimming pools, parks or other recreation.
AMERICAN SOCIETY OF APPRAISERS Back
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An organization of appraisal professionals and others interested
in the appraisal profession.
AMORTIZATION Back
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The repayment of a loan through regular periodic payment.
AMORTIZATION SCHEDULE Back
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The breakdown of individual payments throughout the life of an
amortized loan, showing both principal contribution and debt
service (interest) fees.
AMORTIZATION TERM Back
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The length of time over which an amortized loan is repaid.
Mortgages are commonly amortized over 15 or 30 years.
AMPERAGE Back
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A measure of electric current describing the magnitude.
ANNUAL PERCENTAGE RATE (APR) Back
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The rate of annual interest charged on a loan.
ANNUITY Back
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A sum of money paid at regular intervals, often annually.
APPLICATION Back
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A form used to apply for a mortgage loan that details a
potential borrower's income, debt, savings and other information
used to determine credit worthiness.
APPRAISAL Back
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A ''defensible'' and carefully documented opinion of value. Most
commonly derived using recent sales of comparable properties by
a licensed, professional appraiser.
APPRAISAL FOUNDATION Back
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A not-for-profit educational organization established by the
appraisal profession in the United States in 1987. It is
dedicated to the advancement of professional valuation and
responsible for establishing, improving, and promoting the
Uniform Standards of Professional Appraisal Practice (USPAP).
APPRAISAL INSTITUTE Back
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A world-wide organization dedicated to real estate appraisal
education, publication and advocacy.
APPRAISAL PRINCIPLES Back
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The basic building blocks of the property valuation process,
including property inspection, market analysis and basic
economics.
APPRAISAL REPORT Back
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The end result of the appraisal process usually consists of one
major standardized form such as, the Uniform Residential
Appraisal Report form 1004, as well as all supporting
documentation and additional detail information. The purpose of
the report is to convey the opinion of value of the subject
property and support that opinion with corroborating
information.
APPRAISAL STANDARDS BOARD (ASB) Back
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An independent board of the APPRAISAL FOUNDATION, which writes,
amends, and interprets USPAP. The ASB is composed of up to seven
appraisers appointed by the Foundation's Board of Trustees. The
ASB holds public meetings throughout the year to interpret and
amend USPAP.
APPRAISED VALUE Back
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An opinion of the fair market value of a property as developed
by a licensed, certified appraiser following accepted appraisal
principals.
APPRAISER Back
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An educated, certified professional with extensive knowledge of
real estate markets, values and practices. The appraiser is
often the only independent voice in any real estate transaction
with no vested interest in the ultimate value or sales price of
the property.
APPRECIATION Back
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The natural rise in property value due to market forces.
ARMS LENGTH TRANSACTION Back
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Any transaction in which the two parties are unconnected and
have no overt common interests. Such a transaction most often
reflects the true market value of a property.
ASSESSED VALUE Back
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The value of a property according to jurisdictional tax
assessment.
ASSESSMENT Back
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The function of assigning a value to a property for the purpose
of levying taxes.
ASSESSMENT RATIO Back
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The comparative relationship of a property's assessed value to
its market value.
ASSESSOR Back
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The jurisdictional official who performs the assessment and
assigns the value of a property.
ASSET Back
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Any item of value which a person owns.
ASSIGNMENT Back
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Transfer of ownership of a mortgage usually when the loan is
sold to another company.
ASSUMABLE MORTGAGE Back
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A mortgage that can be taken over by the buyer when a home is
sold.
ASSUMPTION Back
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When a buyer takes over, or "assumes" the sellers
mortgage.
ATTACHED HOUSING Back
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Any number of houses or other dwellings which are physically
attached to one another, but are occupied by a number of
different people. The individual houses may or may not be owned
by separate people as well.
BACKFILL Back
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The slope of the ground around a house.
BALL COCK VALVE Back
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The valve inside a toilet tank that controls the filling of the
tank.
BALLOON MORTGAGE Back
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A mortgage loan in which the monthly payments are not large
enough to repay the loan by the end of the term. So at the end
of the term, the remaining balance comes due in a single large
payment.
BALLOON PAYMENT Back
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The final large payment at the end of a balloon mortgage term.
BANKRUPTCY Back
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When a person or business is unable to pay their debts and seeks
protection of the state against creditors. Bankruptcies remain
on credit records for up to ten years and can prevent a person
from being able to get a loan.
BEAM Back
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A structural supporting member.
BILL OF SALE Back
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A physical receipt indicating the sale of property.
BIWEEKLY MORTGAGE Back
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A mortgage where you make "half payments" every two
weeks, rather than one payment per month. This results in making
the equivalent of 13 monthly payments per year, rather than 12,
significantly reducing the time it takes to pay off a thirty
year mortgage.
BLIGHTED AREA Back
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Any region of a city or town that has fallen into disrepair or
otherwise has become undesirable.
BONA FIDE Back
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Any genuine offer, made without intent to defraud or deceive.
BRIDGE FINANCING Back
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An interim loan made to facilitate the purchase of a new home
before the buyer's current residence sells and its equity is
available to fund the new purchase.
BRIDGING Back
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Structural members used between beams to strengthen the
structure.
BROKER Back
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An individual who facilitates the purchase of property by
bringing together a buyer and a seller.
BTU Back
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British Thermal Unit. A unit of measurement used to describe
heating or cooling capacity.
BUFFER ZONE Back
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A segment of land between two disparate municipal zones which
acts as a shield to keep one zone from encroaching upon the
other. Often used to separate residential districts from
commercial areas.
BUILDING CODE Back
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Regulations that ensure the safety and material compliance of
new construction within a municipality. Building codes are
localized to ensure they are adequate to meet the risk of common
hazards.
BUILDING LINE OR SETBACK Back
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The statutory distance between buildings and the property line,
imposed by municipalities, home associations, or other
agreements.
BUILT-INS Back
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Specific items of personal property which are installed in a
real estate improvement such that they become part of the
building. Built-in microwave ovens and dishwashers are common
examples.
BUNGALOW Back
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A one-story, home-style dating from the early twentieth century.
Often characterized by a low-pitched roof.
BUY DOWN Back
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Extra money paid in a lump sum to reduce the interest rate of a
fixed rate mortgage for a period of time. The extra money may be
paid by the borrower, in order to have a lower payment at the
beginning of the mortgage. Or paid by the seller, or lender, as
incentive to buy the property or take on the mortgage.
BX CABLE Back
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Electrical cable shrouded in a galvanized steel outer cover.
CALL OPTION Back
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A clause in a mortgage which allows the lender to demand payment
of the outstanding balance at a specific time.
CAP Back
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Associated with Adjustable Rate Mortgages. A limit on how high
monthly payments or how much interest rates may change within a
certain time period or the life of the mortgage.
CAPE COD COLONIAL Back
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A single-story house style made popular in New England. Often
characterized by a steep roof with gables.
CAPITAL Back
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Accumulated goods and money which is most often used to generate
additional income.
CAPITAL EXPENDITURE Back
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An outlay of funds designed to improve the income-producing
capabilities of an asset or to extend its economic life.
CASH-OUT REFINANCE Back
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Refinancing a mortgage at a higher amount than the current
balance in order to transform a portion of the equity into cash.
CAULKING Back
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A pliable material used to seal cracks or openings such as
around windows.
CAVEAT EMPTOR Back
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Literally translated: ''Let the buyer beware.'' A common
business tenet whereby the buyer is responsible for verifying
any and all claims by the seller of property.
CERTIFICATE OF DEPOSIT Back
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A document showing that the bearer has a certain amount of
money, at a particular amount interest, on deposit with a
financial institution.
CERTIFICATE OF DEPOSIT INDEX Back
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An index based on the interest rate of six month CD's. Used to
set interest rates on some Adjustable Rate Mortgages.
CERTIFICATE OF ELIGIBILITY Back
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A document issued by the Veterans Administration that certifies
eligibility for a VA loan.
CERTIFICATE OF OCCUPANCY Back
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Issued by an appropriate jurisdictional entity, this document
certifies that a building complies with all building codes and
is safe for use or habitation.
CERTIFICATE OF REASONABLE VALUE (CRV) Back
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Usually based on an independent appraisal, a CRV for a
particular property establishes the maximum amount which can be
secured by a VA mortgage.
CERTIFICATE OF TITLE Back
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A document designating the legal owner of a parcel of real
estate. Usually provided by a title or abstract company.
CERTIFIED GENERAL APPRAISER Back
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Generally, any professional who has met the local or state
requirements, and passed the appropriate certification exam, and
is capable of appraising any type of property.
CERTIFIED RESIDENTIAL APPRAISER Back
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A sub-classification of appraiser who is only licensed to
appraise residential property, usually up to four units.
CHAIN OF TITLE Back
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The complete history of ownership of a piece of property.
CHATTEL Back
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Any personal property which is not attached to or an integral
part of a property. Chattel is not commonly taken into
consideration when appraising the value of real property.
CIRCUIT BREAKERS Back
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Electrical devices which automatically open electrical circuits
if they are overloaded.
CLEAR TITLE Back
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Ownership of property that is not encumbered by any
counter-claim or lien.
CLOSING Back
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A torturous process designed to induce cramping in a home
buyer's hands by requiring signature on countless pieces of
documentation that nobody has ever read. Or, the process whereby
the sale of a property is consummated with the buyer completing
all applicable documentation, including signing the mortgage
obligation and paying all appropriate costs associated with the
sale (CLOSING COSTS).
CLOSING COSTS Back
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All appropriate costs generated by the sale of property which
the parties must pay to complete the transaction. Costs may
include appraisal fees, origination fees, title insurance, taxes
and any points negotiated in the deal.
CLOSING STATEMENT Back
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The document detailing the final financial arrangement between a
buyer and seller and the costs paid by each.
CO-BORROWER Back
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A second person sharing obligation on the loan and title on the
property.
COLLATERAL Back
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An asset which is placed at risk to secure the repayment of a
loan.
COLLECTION Back
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The process a lender takes to pursue a borrower who is
delinquent on his payments in order to bring the mortgage
current again. Includes documentation that may be used in
foreclosure.
CO-MAKER Back
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A second party who signs a loan, along with the borrower, and
becomes liable for the debt should the borrower default.
COMMON LAW Back
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As opposed to statute law. Laws that have been established by
custom, usage and courts over many years.
COMMISSION Back
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A percentage of the sales price or a fixed fee negotiated by an
agent to compensate for the effort expended to sell or purchase
property.
COMMON AREA ASSESSMENTS Back
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Fees which are charged to the tenets or owners of properties to
cover the costs of maintaining areas shared with other tenets or
owners. Commonly found in condominium, PUD or office spaces.
COMMON AREAS Back
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Any areas, such as entryways, foyers, pools, recreational
facilities or the like, which are shared by the tenets or owners
of property near by. Commonly found in condominium, PUD or
office spaces.
COMMUNITY PROPERTY Back
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In many jurisdictions, any property which has been acquired by a
married couple. The ownership of the property is considered
equal unless stipulated otherwise by both parties.
COMPARABLES Back
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An abbreviated term used by appraisers to describe properties
which are similar in size, condition, location and amenities to
a subject property whose value is being determined. The
Uniform Standards of Professional Appraisal Practice (USPAP)
establish clear guidelines for determining a comparable
property.
COMPOUND INTEREST Back
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Interest paid on the principal amount, as well as any
accumulated interest.
CONCESSIONS Back
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Additional value granted by a buyer or seller to entice another
party to complete a deal.
CONDEMNATION Back
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The official process by which a property is deemed to be
uninhabitable or unusable due to internal damage or other
external conditions.
CONDENSATION Back
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The transition of water vapor to liquid. Typically forms in
areas of high humidity.
CONDOMINIUM Back
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A development where individual units are owned, but common areas
and amenities are shared equally by all owners.
CONDOMINIUM CONVERSION Back
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Commonly, the conversion of a rental property such as an
apartment complex into a CONDOMINIUM-style complex where each
unit is owned rather than leased.
CONDUIT Back
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The pipe through which electric wiring is run.
CONSTRUCTION LOAN Back
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A loan made to a builder or home owner that finances the initial
construction of a property, but is replaced by a traditional
mortgage one the property is completed.
CONTIGUOUS Back
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Connected to or touching along an unbroken boundary.
CONTINGENCY Back
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Something that must occur before something else happens. Often
used in real estate sales when a buyer must sell a current home
before purchasing a new one. Or, when a buyer makes an offer
that requires a complete home inspection before it becomes
official.
CONTRACT Back
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A legally binding agreement, oral or written, between two
parties.
CONVENTIONAL MORTGAGE Back
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A traditional, real estate financing mechanism that is not
backed by any government or other agency (FHA, VA, etc.).
CONVERTIBLE ARM Back
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A mortgage that begins as and adjustable, that allows the
borrower to convert the loan to a fixed rate within a specific
timeframe.
COOPERATIVE (CO-OP) Back
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A form of ownership where each resident of a multiunit property
owns a share in a cooperative corporation that owns the
building. With each resident having rights to a specific unit
within the building.
CORPORATE RELOCATION Back
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A situation where a person's employer pays all or some of the
expenses associated with moving from one location to another,
usually over a substantial distance. Relocation expenses often
include the amounts, such as brokerage fees, incurred in the
selling and buying of the employee's primary residence.
COST OF FUNDS INDEX (COFI) Back
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An index of financial institutions costs used to set interest
rates for some Adjustable Rate Mortgages.
COVENANT Back
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A stipulation in any mortgage that, if not met, can be cause for
the lender to foreclose.
CREDIT Back
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A loan of money for the purchase of property, real or personal.
Credit is either secured by an asset, such as a home, or
unsecured.
CREDIT HISTORY Back
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A record of debt payments, past and present. Used by mortgage
lenders in determining credit worthiness of individuals.
CREDITOR Back
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A person to whom money is owed.
CREDIT REPORT Back
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A detailed report of an individuals credit, employment and
residence history prepared by a credit bureau. Used by lenders
to determine credit worthiness of individuals.
CREDIT REPOSITORY Back
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Large companies that gather and store financial and credit
information about individuals who apply for credit.
CUL-DE-SAC Back
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A dead-end street. One with only one entrance/exit.
DATE OF APPRAISAL Back
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The specific point in time as of which an appraiser designates
the value of a home. Often stipulated as the date of inspection.
DEBT Back
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An obligation to repay some amount owed. This may or may not be
monetary.
DEBT EQUITY RATIO Back
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The ratio of the amount a mortgagor still owes on a property to
the amount of equity they have in the home. Equity is calculated
at the fair-market value of the home, less any outstanding
mortgage debt.
DEED Back
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A document indicating the ownership of a property.
DEED-IN-LIEU (OF FORECLOSURE) Back
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A document given by a borrower to a lender, transferring title
of the property. Often used to avoid credit-damaging foreclosure
procedures.
DEED OF TRUST Back
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A document which transfers title in a property to a trustee, whose
obligations and powers are stipulated. Often used in mortgage
transactions.
DEED OF RECONVEYANCE Back
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A document which transfers ownership of a property from a
Trustee back to a borrower who has fulfilled the obligations of
a mortgage.
DEED OF RELEASE Back
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A document which dismisses a lien or other claim on a property.
DEED OF SURRENDER Back
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A document used to surrender any claim a person has to a
property.
DEFAULT Back
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The condition in which a borrower has failed to meet the
obligations of a loan or mortgage.
DELINQUENCY Back
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The state in which a borrow has failed to meet payment
obligations on time.
DEPOSIT Back
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Cash given along with an offer to purchase property, Also called
EARNEST MONEY.
DEPRECIATION Back
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The natural decline in property value due to market forces or
depletion of resources.
DETACHED SINGLE-FAMILY HOME Back
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A single building improvement intended to serve as a home for
one family.
DISCOUNT POINTS Back
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Points paid in addition to the loan origination fee to get a
lower interest rate. One point is equal to one percent of the
loan amount.
DISTRESSED PROPERTY Back
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A mortgaged property which has been foreclosed on.
DOWNSPOUT Back
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The pipe that water moves through to reach the ground from the
rain gutter.
DUE-ON-SALE PROVISION Back
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A clause in a mortgage giving the lender the right to demand
payment of the full balance when the borrower sells the
property.
DUPLEX Back
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A single-building improvement which is divided and provides two
units which serve as homes to two families.
DWELLING Back
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A house or other building which serves as a home.
DOWN PAYMENT Back
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An amount paid in cash for a property, with the intent to
mortgage the remaining amount due.
EARNEST MONEY DEPOSIT Back
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A cash deposit made to a home seller to secure an offer to buy
the property. This amount is often forfeited if the buyer
decides to withdraw his offer.
EASEMENT Back
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The right of a non-owner of property to exert control over a
portion or all of the property. For example, power companies
often own an easement over residential properties for access to
their power lines.
EAVE Back
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The part of the roof that extends beyond the exterior wall.
ECONOMIC DEPRECIATION Back
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The decline in property value caused by external forces, such as
neighborhood blight or adverse development.
ECONOMIC LIFE Back
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The amount of time which any income-producing property is able
to provide benefits to its owner.
EFFECTIVE AGE Back
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The subjective, estimated age of a property based on its
condition, rather than the actual time since it was built.
Excessive wear and tear can cause a property's effective age to
be greater than its actual age.
EMINENT DOMAIN Back
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The legal process whereby a government can take ownership of a
piece of property in order to convert it to public use. Often,
the property owner is paid fair-market value for the property.
ENCROACHMENT Back
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A building or other improvement on one property which invades
another property or restricts its usage.
ENCUMBRANCE Back
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A claim against a property. Examples are mortgages, liens and
easements.
ENERGY EFFICIENCY RATIO Back
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An efficiency rating system for air conditioning units that
corresponds to the number of BTU's output per watt of
electricity used.
EQUAL CREDIT OPPORTUNITY ACT (ECOA) Back
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U.S. federal law requiring that lenders afford people equal
chance of getting credit without discrimination based on race,
religion, age, sex etc
EQUITY Back
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The difference between the fair market value of a property and
that amount an owner owes on any mortgages or loans secured by
the property.
EQUITY BUILDUP Back
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The natural increase in the amount of equity an owner has in a
property, accumulated through market appreciation and debt
repayment.
ERRORS AND OMISSIONS INSURANCE Back
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An insurance policy taken out by appraisers to cover their
liability for any mistakes made during the appraisal process.
ESCROW Back
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An amount retained by a third party in a trust to meet a future
obligation. Often used in the payment of annual taxes or
insurance for real property.
ESCROW ACCOUNT Back
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An account setup by a mortgage servicing company to hold funds
with which to pay expenses such as homeowners insurance and
property taxes. An extra amount is paid with regular principal
and interest payments that go into the escrow account each
month.
ESCROW ANALYSIS Back
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An analysis performed by the lender usually once each year to
see that the amount of money going into the escrow account each
month is correct for the forecasted expenses.
ESCROW DISBURSEMENTS Back
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The payout of funds from an escrow account to pay property
expenses such as taxes and insurance.
ESTATE Back
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The total of all property and assets owned by an individual.
EXAMINATION OF TITLE Back
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The report on the title of a property from the public records or
an abstract of the title.
EXCLUSIVE LISTING Back
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An agreement between the owner of a property and a real estate
agent giving the agent exclusive right to sell the property.
EXECUTOR Back
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The person named in a will to administer the estate.
FACADE Back
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The front exposure of any building. Often used to describe an
artificial or false front which is not consistent with the
construction of the rest of the building.
FAIR CREDIT REPORTING ACT Back
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A federal law regulating the way credit agencies disclose
consumer credit reports and the remedies available to consumers
for disputing and correcting mistakes on their credit history.
FAIR MARKET VALUE Back
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The price at which two unrelated parties, under no duress, are
willing to transact business.
FANNIE MAE Back
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A private, shareholder-owned company that works to make sure
mortgage money is available for people to purchase homes.
Created by Congress in 1938, Fannie Mae is the nation's largest
source of financing for home mortgages.
FASCIA Back
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The boards that enclose the eaves.
FEDERAL DEPOSIT INSURANCE CORPORATION
(FDIC) Back
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The U.S. Government agency created in 1933 which maintains the
stability of and public confidence in the nation's financial
system by insuring deposits and promoting safe and sound banking
practices.
FEDERAL HOUSING ADMINISTRATION (FHA) Back
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A sub-agency of the U.S. Department of Housing and Urban
Development created in the 1930's to facilitate the purchase of
homes by low-income, first-time home buyers. It currently
provides federally-subsidized mortgage insurance for private
lenders.
FEE APPRAISER Back
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A certified, professional appraiser who forms an opinion of the
fair market value of property and receives a set fee in
exchange.
FEE SIMPLE Back
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A complete, unencumbered ownership right in a piece of property.
FEE SIMPLE ESTATE Back
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A form or ownership, or holding title to real estate. It is the
most complete form of title, having an unconditional and
unlimited interest of perpetual duration.
FHA MORTGAGE Back
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A mortgage that is insured by the Federal Housing Administration
(FHA).
FINAL VALUE ESTIMATE Back
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The opinion of value of a piece of property resulting from an
appraisal following the USPAP guidelines.
FIRST MORTGAGE Back
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The primary loan or mortgage secured by a piece of property.
FIXED-RATE MORTGAGE (FRM) Back
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A mortgage which has a fixed rate of interest over the life of
the loan.
FIXTURE Back
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Any piece of personal property which becomes permanently affixed
to a piece of real property.
FLASHING Back
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The metal used around the base of roof mounted equipment, or at
the junction of angles used to prevent leaking.
FLOOD INSURANCE Back
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Supplemental insurance which covers a home owner for any loss
due to water damage from a flood. Often required by lenders for
homes located in FEMA-designated flood zones.
FLOOR PLAN Back
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The representation of a building which shows the basic outline
of the structure, as well as detailed information about the
positioning of rooms, hallways, doors, stairs and other
features. Often includes detailed information about other
fixtures and amenities.
FLUE Back
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The furnace exhaust pipe, usually going through the roof.
FLUSH VALVE Back
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The valve between the toilet bowl and the tank.
FOOTING Back
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The partially buried support for a vertical structural member
such as a post.
FORECLOSURE Back
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The process whereby a lender can claim the property used by a
borrower to secure a mortgage and sell the property to meet the
obligations of the loan.
FORFEITURE Back
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The loss of property or money due to the failure to meet the
obligations of a mortgage or loan secured by that property.
FOUNDATION Back
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The solid structural element upon which a structure is built.
FRONTAGE Back
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The segment of a property that runs along a point of access,
such as a street or water front.
FUNCTIONAL OBSOLESCENCE Back
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A decrease in the value of property due to a feature or lack
thereof which renders the property undesirable. Functional
obsolescence can also occur when the surrounding area changes,
rendering the property unusable for its originally intended
purpose.
GABLE ROOF Back
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A steeply angled, triangular roof.
GALVANIZED PIPE Back
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Iron pipe with a galvanized (zinc) coating.
GAMBREL ROOF Back
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A ''barn-like'' roof, where the upper portion of the roof is
less-steeply angled than the lower part.
GENERAL LIEN Back
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A broad-based claim against several properties owned by a
defaulting party.
GEORGIAN Back
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A classic, English-style hose characterized by simple
rectangular shape and multiple stories.
GFI Back
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Ground Fault Interrupter. A type of circuit breaker required in
areas where water is present.
GINNIE MAE Back
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A wholly owned corporation created in 1968 within the U.S.
Department of Housing and Urban Development to serve low-to
moderate-income homebuyers.
GIRDER Back
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A main supporting beam.
GOVERNMENT MORTGAGE Back
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Any mortgage insured by a government agency, such as the FHA or
VA.
GRADE Back
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The slope of land around a building. Also ground level.
GRANTEE Back
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Any person who is given ownership of a piece of property.
GRANTOR Back
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Any person who gives away ownership of a piece of property.
GROSS AREA Back
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The sum total of all floor space, including areas such as
stairways and closet space. Often measured based on external
wall lengths.
GROUTING Back
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Material used around ceramic tile.
GUTTER Back
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The trough around the edge of the roof that catches and diverts
rain.
HALF-SECTION Back
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320 acres.
HAZARD INSURANCE Back
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Insurance covering damage to a property caused by hazards such
as fire, wind and accident.
HEADER Back
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The framing elements above an opening such as a window or door.
HEARTH Back
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The floor of a fireplace or the area immediately in front of it.
HEIGHT ZONING Back
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A municipal restriction on the maximum height of any building or
other structure.
HIDDEN AMENITIES Back
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Assets of a property which contribute to its value, but are not
readily apparent. Examples might include upgraded or premium
building materials.
HIGHEST AND BEST USE Back
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The most profitable and likely use of a property. Selected from
reasonably probable and legal alternative uses, which are found
to be physically possible, appropriately supported and
financially feasible to result in the highest possible land
value.
HOME EQUITY CONVERSION MORTGAGE (HECM) Back
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Also known as a reverse annuity mortgage. It allows home owners
(usually older) to convert equity in the home into cash.
Normally paid by the lender in monthly payments. HECM's
typically do not have to be repaid until the borrower is no
longer occupying the home.
HOME EQUITY LINE OF CREDIT Back
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A type of mortgage loan that allows the borrower to draw cash
against the equity in his home.
HOME INSPECTION Back
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A complete examination of a building to determine its structural
integrity and uncover any defects in materials or workmanship
which may adversely affect the property or decrease its value.
HOME INSPECTOR Back
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A person who performs professional home inspections. Usually,
with an extensive knowledge of house construction methods,
common house problems, how to identify those problems and how to
correct them.
HOMEOWNER'S ASSOCIATION Back
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An organization of home owners in a particular neighborhood or
development formed to facilitate the maintenance of common areas
and to enforce any building restrictions or covenants.
HOMEOWNER'S INSURANCE Back
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A policy which covers a home owner for any loss of property due
to accident, intrusion or hazard.
HOMEOWNER'S WARRANTY Back
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An insurance policy covering the repair of systems and
appliances within the home for the coverage period.
HUD MEDIAN INCOME Back
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Median family income for a particular county or metropolitan
statistical area (MSA), as estimated by the Department of
Housing and Urban Development (HUD).
HUD-1 STATEMENT Back
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A standardized, itemized list, published by the U.S. Department
of Housing and Urban Development (HUD), of all anticipated
CLOSING COSTS connected with a particular property purchase.
IMPROVED LAND Back
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Any parcel of land which has been changed from its natural state
through the creation of roads, buildings or other structures.
IMPROVEMENTS Back
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Any item added to vacant land with the intent of increasing its
value or usability.
IMPROVEMENT RATIO Back
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The comparative value of an improved piece of land to its
natural, unaltered state.
INCOME APPROACH Back
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The process of estimating the value of property by considering
the present value of a stream of income generated by the
property.
INCOME PROPERTY Back
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A piece of property whose highest and best use is the generation
of income through rents or other sources.
INDEPENDENT APPRAISAL Back
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An estimation of value created by a professional, certified
appraiser with no vested interest in the value of the property.
INSPECTION Back
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The examination of a piece of property, its buildings or other
amenities.
INSURABLE TITLE Back
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The title to property which has been sufficiently reviewed by a
title insurance company, such that they are willing to insure it
as free and clear.
INTEREST RATE Back
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A percentage of a loan or mortgage value that is paid to the
lender as compensation for loaning funds.
INVESTMENT PROPERTY Back
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Any piece of property that is expected to generate a financial
return. This may come as the result of periodic rents or through
appreciation of the property value over time.
JAMB Back
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The side of a door frame.
JOINT TENANCY Back
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A situation where two or more parties own a piece of property
together. Each of the owners has an equal share, and may not
dispose of or alter that share without the consent of the other
owners.
JOISTS Back
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Horizontal beams laid on edge to support flooring or a ceiling.
JUDGMENT Back
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An official court decision. If the judgment requires payment
from one party to another, the court may put a lien against the
payee's property as collateral.
JUDICIAL FORECLOSURE Back
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A type of foreclosure conducted as a civil suit in a court of
law.
JUMBO LOAN Back
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A mortgage loan for an amount greater than the limits set by
Fannie Mae and Freddie Mac. Often called non-conforming loans.
LALLY COLUMN Back
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A concrete filled steel pipe used to support beams.
LATE CHARGE Back
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An extra charge, or penalty added to a regular mortgage payment
when the payment is made late by an amount of time specified in
the original loan document.
LATENT DEFECTS Back
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Any defect in a piece of property which is not readily apparent,
but which has an impact of the value. Structural damage or
termite infestation would be examples of latent defects.
LEASE Back
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A contract between a property owner and a tenant specifying the
payment amount, terms and conditions, as well as the length of
time the contract will be in force.
LEASEHOLD ESTATE Back
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A type of property ''ownership'' where the buyer actually has a
long-term lease on the property.
LEASE OPTION Back
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A lease agreement that gives the tenant an option to buy the
property. Usually, a portion of the regular monthly rent payment
will be applied towards the down payment.
LEGAL DESCRIPTION Back
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The description of a piece of property, identifying its specific
location in terms established by the municipality or other
jurisdiction in which the property resides. Often related in
specific distances from a known landmark or intersection.
LENDER Back
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The person or entity who loans funds to a buyer. In return, the
lender will receive periodic payments, including principal and
interest amounts.
LIABILITIES Back
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A person's outstanding debt obligations.
LIABILITY INSURANCE Back
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Insurance that covers against potential lawsuit brought against
a property owner for alleged negligence resulting in damage to
another party.
LIEN Back
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Any claim against a piece of property resulting from a debt or
other obligation.
LIFE CAP Back
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A limit on how far the interest rate can move for an Adjustable
Rate Mortgage.
LIKE-KIND PROPERTY Back
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Any property which is substantially similar to another property.
LINE OF CREDIT Back
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An extension of credit for a certain amount for a specific
amount of time. To be used by the borrower at his discretion.
LIQUID ASSET Back
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Any asset which can be quickly converted into cash at little or
no cost, or cash itself.
LOAN Back
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Money borrowed, to be repaid with interest, according to the
specific terms and conditions of the loan.
LOAN OFFICER Back
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A person that "sells" loans, representing the lender
to the borrower, and the borrower to the lender.
LOAN ORIGINATION Back
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How a lender refers to the process of writing new loans.
LOAN SERVICING Back
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The processing of payments, mailing of monthly statements,
management and disbursement of escrow funds etc Typically
carried out by the company you make payments to.
LOAN-TO-VALUE RATIO (LTV) Back
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The comparison of the amount owed on a mortgaged property to its
fair market value.
LOCK-IN Back
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An agreement between a lender and a borrower, guaranteeing an
interest rate for a loan if the loan is closed within a certain
amount of time.
LOCK-IN PERIOD Back
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The amount of time the lender has guaranteed an interest rate to
a borrower.
MAJOR DEFICIENCY Back
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A deficiency that strongly impacts the usability and
habitability of a house. Or a deficiency that may be very
expensive to repair.
MANUFACTURED HOUSING Back
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Once known as ''mobile homes,'' manufactured housing is any
building which has been constructed off site, then moved onto a
piece of real property.
MARGIN Back
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The difference between the interest rate and the index on an
adjustable rate mortgage.
MARGINAL LAND Back
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Land whose value has been diminished due to some internal defect
or external condition. In most cases, the cost to correct the
flaw or condition is as much or more than the expected return
from the property.
MASTER ASSOCIATION Back
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An umbrella organization that is made up of multiple, smaller
home owner's associations. Often found in very large
developments or condominium projects.
MATURITY Back
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The date on which the principal balance of a financial
instrument becomes due and payable.
MERGED CREDIT REPORT Back
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A credit report derived from data obtained from multiple credit
agencies.
METES AND BOUNDS Back
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A traditional way of describing property, generally expressed in
terms of distance from a known landmark or intersection, and
then following the boundaries of the property back to its
origin.
METROPOLITAN AREA Back
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The accumulated land in and around a city or other municipality
which falls under the political and economic influence of that
entity.
MINERAL RIGHTS Back
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The legal right to exploit and enjoy the benefits of any
minerals located below the surface of a parcel of land.
MISREPRESENTATION Back
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A statement by one party in a transaction that is incorrect or
misleading. Most misrepresentations are deemed to be intentional
and thus may constitute fraud. Others, however, some are
rendered through simple mistakes, oversights or negligence.
MORTGAGE Back
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A financial arrangement wherein an individual borrows money to
purchase real property and secures the loan with the property as
collateral.
MORTGAGE BANKER Back
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A financial institution that provides primary and secondary
mortgages to home buyers.
MORTGAGE BROKER Back
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A person or organization that serves as a middleman to
facilitate the mortgage process. Brokers often represent
multiple mortgage bankers and offer the most appropriate deal to
each buyer.
MORTGAGEE Back
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The entity that lends money in a real estate transaction.
MORTGAGE INSURANCE Back
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A policy that fulfills those obligations of a mortgage when
the policy holder defaults or is no longer able to make
payments.
MORTGAGE INSURANCE PREMIUM (MIP) Back
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A fee that is often included in mortgage payments that pays for
mortgage insurance coverage.
MORTGAGE LIFE INSURANCE Back
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A policy that fulfills the obligations of a mortgage when the
policy holder dies.
MORTGAGOR Back
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The entity that borrows money in a real estate transaction.
MULTI-FAMILY PROPERTIES Back
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Any collection of buildings that are designed and built to
support the habitation of more than four families.
NATIONAL ASSOCIATION OF MASTER APPRAISERS
(NAMA) Back
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A non profit professional association organized in 1982,
dedicated to the advancement of professionalism in real estate
appraisal.
NATIONAL SOCIETY OF REAL ESTATE
APPRAISERS Back
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An organization founded in 1956 which promotes standards of
professionalism in its members.
NATURAL VACANCY RATE Back
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The percentage of vacant properties in a given area that is the
result of natural turnover and market forces.
NEGATIVE AMORTIZATION Back
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When the balance of a loan increases instead of decreases.
Usually due to a borrower making a minimum payment on an
Adjustable Rate Mortgage during a period when the rate
fluctuates to a high enough point that the minimum payment does
not cover all of the interest.
NEIGHBORHOOD LIFE-CYCLE Back
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The evolution of neighborhood use and demographics over time.
Economic fluctuations, municipal zoning changes and population
shifts can effect the life cycle.
NEIGHBORHOOD Back
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A subsection of a municipality that has been designated by a
developer, economic forces or physical formations.
NET LEASABLE AREA Back
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The space in a development, outside of the common areas, that
can be rented to tenants.
NEW ENGLAND COLONIAL Back
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An architectural style dating from early American history
typified by a two-story building with clapboard siding.
NO-COST LOAN Back
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Many lenders offer loans that you can obtain at "no
cost." You should inquire whether this means there are no
"lender" costs associated with the loan, or if it also
covers the other costs you would normally have in a purchase or
refinance transactions, such as title insurance, escrow fees,
settlement fees, appraisal, recording fees, notary fees, and
others. These are fees and costs which may be associated with
buying a home or obtaining a loan, but not charged directly by
the lender. Keep in mind that, like a "no-point" loan,
the interest rate will be higher than if you obtain a loan that
has costs associated with it.
NO-POINT LOAN Back
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A loan with no "points". The interest rate on such a
loan will be higher than a loan with points paid. Also sometimes
refers to a refinance loan where closing costs are included in
the loan.
NON-CONFORMING USE Back
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The use of land for purposes contrary to the applicable
municipal zoning specifications. Often occurs when zoning
changes after a property is in use.
NONLIQUID ASSET Back
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Any asset which can not be quickly converted into cash at little
or no cost.
NOTE Back
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A legal document that obligates a borrower to repay a mortgage
loan at a stated interest rate during a specified period of
time.
NOTE RATE Back
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The interest rate stated on a mortgage note.
NOTICE OF DEFAULT Back
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Formal written notice from a lender to a borrower that default
has occurred.
OBSOLESCENCE Back
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The process of an assets value diminishing due to the
development of more desirable alternatives or because of the
degradation of its capabilities.
OCCUPANCY Back
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A physical presence within and control of a property.
OCCUPANCY RATE Back
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The percentage of properties in a given area that are occupied.
OCTOPUS RECEPTACLE Back
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An outlet with too many devices plugged into it, using a power
strip or other device to multiply the outlets.
OFF-SITE IMPROVEMENTS Back
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Buildings, structures or other amenities which are not located
on a piece of property, but are necessary to maximize the use of
the property or in some way contribute to the value of the
property.
OFF-STREET PARKING Back
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Designated parking spaces associated with a particular building
or other structure which are not located on public streets.
OLD TERMITE ACTIVITY Back
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Where no termites are currently active, but indications of past
activity can be seen.
ON-SITE IMPROVEMENTS Back
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Buildings, structures or other amenities that are erected on a
piece of property and contribute to its value.
OPEN SPACE Back
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Any land which has not had any significant buildings or
structures erected on it. Most often used to describe desirable
neighborhood features like parks.
OPEN SPLICE Back
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An uncovered electrical connection.
ORIGINAL EQUITY Back
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The amount of cash a home buyer initially invests in the home.
ORIGINAL PRINCIPAL BALANCE Back
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The total amount of principal owed on a mortgage loan at the
time of closing.
ORIGINATION FEE Back
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Refers to the total number of points paid by a borrower at
closing.
OWNER FINANCING Back
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A transaction where the property owner provides all or part of
the financing.
OWNER OCCUPIED Back
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The state of property wherein the owner occupies at least some
portion of the property.
PARGING Back
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The cement coat applied to block foundations.
PARTIAL INTEREST Back
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A shared ownership in a piece of property. May be divided among
two or more parties.
PARTIAL PAYMENT Back
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A payment of less than the regular monthly amount. Usually, a
lender will not accept partial payments.
PERIODIC PAYMENT CAP Back
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The limit on how much regular monthly payments on an Adjustable
Rate Mortgage can change during one adjustment period.
PERIODIC RATE CAP Back
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The limit on how much the interest rate on an Adjustable Rate
Mortgage can change during any one adjustment period.
PERSONAL PROPERTY Back
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Owned items which are not permanently affixed to the land.
PERSONAL RESIDENCE Back
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The primary domicile of a person or family.
PLANNED UNIT DEVELOPMENT (PUD) Back
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A coordinated, real estate development where common areas are
shared and maintained by an owner's association or other entity.
PLAT Back
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A plan or chart of a piece of land which lays out existing or
planned streets, lots or other improvements.
POINT Back
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A percentage of a mortgage amount (one point = 1 percent).
PRE-APPROVAL Back
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The process of applying for a mortgage loan and becoming
approved for a certain amount at a certain interest rate before
a property has been chosen. Pre-approval allows the borrower
greater freedom in negotiations with sellers.
PREFABRICATED Back
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Any building or portion thereof which is manufactured and
assembled off site, then erected on a property.
PREPAYMENT Back
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Payment made that reduces the principal balance of a loan before
the due date and before the loan has become fully amortized.
PREPAYMENT PENALTY Back
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A fee that may be charged to a borrower who pays off a loan
before it is due.
PRE-QUALIFICATION Back
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Less formal that pre-approval, pre-qualification usually means a
written statement from a loan officer indicating his or her
opinion that the borrower will be able to become approved for a
mortgage loan.
PRIME RATE Back
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The interest rate that banks and other lending institutions
charge other banks or preferred customers.
PRINCIPAL Back
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The amount owed on a mortgage which does not include interest or
other fees.
PRINCIPAL BALANCE Back
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The outstanding balance of principal on a mortgage. Does not
included interest due.
PRINCIPAL, INTEREST, TAXES, AND INSURANCE
(PITI) Back
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The most common constituents of a monthly mortgage payment.
PRIVATE MORTGAGE INSURANCE (PMI) Back
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A form of mortgage insurance provided by private, non-government
entities. Normally required when the LOAN TO VALUE RATIO is less
that 20%.
PROPERTY Back
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Any item which is owned or possessed.
PURCHASE AGREEMENT Back
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A written contract signed by the buyer and seller stating the
terms and conditions under which a property will be sold.
QUADRAPLEX Back
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Any building designed to accommodate four families.
QUALIFYING RATIOS Back
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Two ratios used in determining credit worthiness for a mortgage
loan. One is the ratio of a borrower's monthly housing costs to
monthly income. The other is a ratio of all monthly debt to
monthly income.
QUITCLAIM DEED Back
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A legal document which transfers any ownership an individual has
in a piece of property. Often used when the amount of ownership
is not known or is unclear.
RAFTER Back
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A structural element of the roof, sloping from the peak to the
outer walls.
RANCH HOUSE Back
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An architectural style typified by a single-story, low-roof
construction. Popular in the western U.S.
RATE LOCK Back
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A guarantee from a lender of a specific interest rate for a
period of time.
RAW LAND Back
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Any land which has not been developed.
REAL ESTATE Back
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A piece of land and any improvements or fixtures located on that
land.
REAL ESTATE AGENT Back
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A licensed professional who facilitates the buying and selling
of real estate.
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) Back
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A federal law requiring lenders to give full disclosure of
closing costs to borrowers.
REAL PROPERTY Back
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Land, improvements and appurtenances, and the interest and
benefits thereof.
REALTORŪ Back
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A real estate agent or broker who is a member of the NATIONAL
ASSOCIATION of REALTORSŪ.
RECEPTACLE Back
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An electrical outlet to plug into.
RECORDER