| 401(k)/403(b) | An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not-for-profit organizations. Some administrators of 401(k)/403(b) plans allow for loans against the monies accumulated in these plans, monies must be repaid to avoid serious penalty charges. |
| Abandonment | The voluntary relinquishment of rights of ownership or other interest (such as an easement) by failure to use the property, coupled with an intent to abandon (give up the interest). |
| Abatement | A reduction or decrease. Usually applies to a decrease of assessed valuation of ad valorem taxes after the assessment and levy. |
| Abstract | A summary, an abridgement. Before the use of photo static copying, public records were kept by abstracts of recorded documents. |
| Abstract Of Judgment | A summary of the essential provisions of a court judgment, which when recorded in the county recorder's office, creates a lien upon the property of the defendant in that county, both presently owned or after acquired. |
| Abstract of judgment,law | The summary of a court judgment that creates a lien against a property when filed with the county recorder. |
| Abstract Of Title | A compilation of the recorded documents relating to a parcel of land, from which an attorney may give an opinion as to the condition of title. Still in use in some states, but giving way to the use of title insurance. |
| Abstracter's Certificate | A certificate contained in an abstract which shows the time period and scope of the search of public records done by the abstracter. |
| Accelerated cost recovery system | A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property. |
| Accelerated depreciation | A bookkeeping method that depreciates property faster in the early years of ownership. |
| Acceleration clause | A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment. |
| Acceleration Clause | Clause used in an installment note and mortgage (or deed of trust), which gives the lender the right to demand payment in full upon the happening of a certain event, such as failure to pay an installment by a certain date, change of ownership without the lender's consent, destruction of the property, or other event which endangers the security of the loan. |
| Acceptance | The seller's written approval of a buyer's offer. |
| Acceptance | A buyer's or seller's agreement to enter into a contract and be bound by the terms of the offer. |
| Access | Any means by which a person can enter property. |
| Accessibility | The degree to which a building or site allows access to people with disabilities. |
| Accessibility | The location of a site in terms of how easily it may be reached by customers. employees, carriers, and others necessary to the intended use of the property |
| Accord | An agreement by which one accepts something different (usually less) from what is owed as full satisfaction The amount owed may be in dispute or simply accepted as full satisfaction by the creditor or claimant. The agreement and acceptance is called "Accord and Satisfaction." |
| Account termination fee | A fee that is often charged if you pay in full and terminate your home equity line of credit during the first five years. Payment down to a zero balance does not count as termination. See prepayment penalty. |
| Accretion | The gradual addition to the shore or bank of a waterway by deposits of sand or silt. |
| Accretion | The gradual addition to the shore or bank of a waterway. The land generally becomes the property of the owner of the shore or bank, except where statutes specify otherwise. |
| Accrued Depreciation | (1) The amount reserved each year in the accounting system for replacement of a building or other asset. (2) The useful life of a property at any given time. |
| Acknowledgement | A written declaration by a person executing an instrument, given before an officer authorized to give an oath (usually a notary public), stating that the execution is of his own volition. |
| Acknowledgment | A written declaration affirming that a person acted voluntarily. |
| Acquisition Costs | Costs of acquiring property other than purchase price: escrow fees, title insurance, lenders fees, etc. |
| Acre | A measurement of land equal to 43,560 square feet. |
| Acre foot | The volume of material needed to cover an acre of land one foot deep. |
| Act Of God | Damage caused by nature (floods. winds. etc.) rather than destruction by man. |
| Active solar system | A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use. |
| Actual age | The number of years a structure has been standing. |
| Ad Valorem | According to value. A method of taxation using the value of the thing taxed to determine the amount of tax. Taxes can be either "Ad Valorem" or "Specific." Example: A tax of $5.00 per $1000.00 of value per house is "Ad Valorem," A tax of S5.00 per house (irrespective of value) is "Specific." |
| Add on Interest | A method of charging interest usually used in the financing of automobiles, but not generally used in real estate financing. Interest is computed on the total amount borrowed and added on to the principal. Each payment is then deducted from this total amount. Interest on real estate loans is usually figured based on the balance owing after each payment is made (declining balance). |
| Addendum | An addition or change to a contract. |
| Additional principal payment | A payment made by a borrower of more than the scheduled principal amount due, in order to reduce the outstanding balance on the loan, to save on interest over the life of the loan and/or pay off the loan early. |
| Additional principal payment | Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan. |
| Add-on interest | The interest a borrower pays on the principal for the duration of the loan. |
| Adjustable Rate Mortgage | A mortgage where the interest rate is periodically adjusted usually in relation to a specified financial index. |
| Adjustable rate mortgage (ARM) | A home loan that permits the lender to adjust its interest rate periodically during the life of the loan on the basis of changes in a specified financial index. |
| Adjustable Rate Mortgages (arm's) | Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Mortgage Loans (AML'S), Flexible Rate Loans, Variable Rate Loans. |
| Adjustable-rate mortgage (ARM) | A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index. |
| Adjusted cost basis | The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold. |
| Adjusted Gross Income | Gross income of a building it fully rented, less an allowance for estimated vacancies. |
| 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), typically 6 months or 1 year for Countrywide Home Loans Full Spectrum® Lending Division's most popular ARMs. |
| Adjustment period | The amount of time between interest rate adjustments in an adjustable-rate mortgage. |
| Administrator | A person given authority to manage and distribute the estate of someone who died without leaving a will. |
| Administrator's deed | A legal document that an administrator of an estate uses to transfer property. |
| Advance Fee | A fee charged by a broker to a seller to cover all or a portion of the broker's costs of promoting the property. The fee is generally credited against commissions but is not refunded if no commissions are received. Most frequently used in connection with large offerings which require a substantial outlay of funds for promotion. |
| Adverse possession | The acquisition of title to property through possession without the owner's consent for a certain period of time. |
| Adverse use | The access and use of property without the owner's consent. |
| Aeolian soil | Soil that is composed of materials deposited by the wind. |
| Affiant | A person who makes a sworn statement. |
| Affirmation | A substitution for an oath granted to people based on religious reasons. |
| Affordability Analysis (pre-qualification) | A preliminary analysis of a borrower's ability to afford the purchase of a home. An affordability analysis takes into consideration factors such as income, liabilities, and available funds, along with the type of home loan, the likely taxes and insurance for the home, and the estimated closing costs. |
| A-frame design | An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters. |
| Agency | A relationship created when one person (the principal) delegates to another (the agent) the fight to act on his or her behalf in business transactions. |
| Agency | The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract. |
| Agency closing | The process by which a lender uses a title company or other firm as an agent to complete a loan. |
| Agent | A person licensed by the state to conduct real estate transactions. |
| Agreed boundary | A compromise boundary to which property owners agree in order to resolve a dispute. |
| Agreement of sale | A document the buyer initiates and the seller approves that details the price and terms of the transaction. |
| Alcove | A recessed section of a room, such as a breakfast nook. |
| Alienation clause | A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred. |
| Alkali | Mineral salt found in soil. |
| Alkaline soil | Soil that contains a higher concentration of mineral salt than natural acid. |
| All inclusive Trust Deed (wrap-around mortgage) | A financing technique which involves the creation of a new trust deed which includes the balance due on the existing note plus any new funds advanced. |
| Alley | A lane behind a row of buildings or between two rows of buildings. |
| Allowances | Budgets offered by builders of new homes for the purchase of carpeting and fixtures. |
| Alternative mortgage | Any home loan that does not conform to a standard fixed-rate mortgage. |
| Aluminum siding | A metal covering that provides an alternative to paint for owners of wood homes. |
| Aluminum-clad windows | Wooden windows with aluminum covering the exterior. |
| Amenities | Parks, swimming pools, health-club facilities, party rooms, bike paths, community centers and other enticements offered by builders of planned developments. |
| Amenity | A feature of real property that enhances its attractiveness and increases the occupant's or user's satisfaction, although the feature is not essential to the property's use. Natural amenities include a pleasant or desirable location near water, scenic views, etc. Man-made amenities include swimming pools, tennis courts, community buildings, and other recreational facilities. |
| American Land Title Association (ALTA) | A national association of title insurance companies, abstractors, and agents. The association adopts standard title policy forms. |
| American Society of Home Inspectors | The American Society of Home Inspectors is a professional association of independent home inspectors. Phone: (800) 743-2744. |
| Americans with Disabilities Act | A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications. |
| Amortization | Payment of a debt in equal installments of principal and interest, rather than interest only payments. |
| Amortization | The process of paying the principal and interest on a loan through regularly scheduled installments. |
| Amortization schedule | A timetable for payment of a home loan. An amortization schedule shows the amount of each payment applied to interest and principal and the remaining balance after each payment is made. |
| Amortization tables | Mathematical tables that lenders use to calculate a borrower's monthly payment. |
| Amortization term (period) | The amount of time it takes to pay off the loan. The amortization term is expressed as a number of months. For example, for a 30 year fixed rate loan, the amortization term is 360 months. |
| Amortize | To repay a loan with regular payments that cover both principal and interest. |
| Amperage | The strength of an electrical current. |
| Anchor bolt | A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving. |
| Annual | Any kind of plant that must be planted every year. |
| annual maintenance fee | An amount that is charged each year for having a line of credit made available by Countrywide. It is charged regardless of whether or not the credit line is used. For some programs and in some states, an annual fee is not charged. For all Countrywide programs, the fee is automatically waived the first year of the loan. |
| Annual mortgagor statement | A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest. |
| Annual Percentage Rate (a.p.r.) | The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. For example: 6% add-on interest would be much more than 6% simple interest, even though both would say 6%. The A.P.R. is disclosed as a requirement of federal truth in lending statutes and should include all finance charges. |
| Annual Percentage Rate (APR) | APR is a measure of the cost of credit, expressed as a yearly rate. The APR includes the interest rate, points and certain other credit charges. |
| annual percentage rate (APR) | The effective cost of a home loan stated as a yearly rate taking into account such items as interest, mortgage insurance, most closing costs, discount points and loan origination fees. Disclosure of APR is required by the Truth-In-Lending Law. |
| Annual Percentage Rate (APR) | The cost of the loan expressed as a yearly rate on the balance of the loan. |
| Annuity | The payment of a fixed sum to an investor at regular intervals. |
| Anticipatory breach | A communication that informs a party that the obligations of the original contract will not be fulfilled. |
| "Appel Loan (Accelerating Payoff Progressive Equity Loan) " | A residential property loan which calls for a payment increase over the first 6 years. Level payments are made for the remaining years and the loan paid off during the 15th year. There is no prepayment penalty and P.M.I. is required. |
| Application | A document that details a potential borrower's income, debt and other obligations to determine credit worthiness. |
| Application (or 1003) | A form to be completed by a home loan applicant with the lender's assistance to provide pertinent information about a prospective borrower's employment, income, assets, debts and other financial information, about the purpose of the home loan, and about the property securing the home loan. Lenders also sometimes call it a 1003-the form number of Fannie Mae's standard application form. |
| Application fee | A fee usually paid at the time an application is given to a lender for helping to complete and review an application. Some lenders collect fees for a property appraisal and a credit report, instead of an application fee, at the time of application. |
| Application fee | The fee that a lender charges to process a loan application. |
| Appraisal | A written analysis or opinion of the estimated value of a property prepared by a qualified appraiser. Contrast with home inspection. |
| Appraisal | An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of suitable qualifications. |
| Appraisal fee | The fee that an appraiser charges to estimate the market value of the property. |
| Appraisal Methods | Generally, three major methods of appraisal: Cost Approach, Income Approach, Market Value (comparables) Approach. |
| Appraisal Report | A written report provided by an appraiser containing his/her opinion as to the value of a property. |
| Appraisal report | A detailed written report on the value of a property based on recent sales of comparable sites in the area. |
| appraised value | The dollar figure for a property's estimated fair market value, based on an appraiser's knowledge, experience, and analysis of the property and comparable properties near by. |
| Appraised value | An opinion of the current market value of a property. |
| Appraiser | A person qualified by education, training, and experience to estimate the value of real property. |
| Appreciation | An increase in the value of a property due to changes in market conditions or other causes. Inflation, increased demand, home improvement, and sweat equity are all causes of appreciation. The opposite of depreciation. |
| Arbitration | A method of resolving a dispute in which a third party renders a decision. |
| Arbor | An area shaded by trees, shrubs or vines on a latticework structure. |
| Arch | A curved structure that supports weight over an area, such as a doorway. |
| Architect | A licensed professional who designs homes, buildings and other structures. |
| Architectural fees | The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget. |
| Arpent | A French measurement of land equal to .84625 acres. |
| Arrears | (1) Payment made after it is due is in arrears. (2) Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance, as is rent. Example: A rental payment made July 1 pays the rent to August 1. An interest payment made July 1 Pays the interest to July 1. |
| Asbestos | A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard. |
| As-is condition | The purchase or sale of a property in its existing condition. |
| Asking price | A seller's initial price for a property. |
| Assessed value | The value used to determine property taxes, based on a public tax assessor's opinion. Contrast with appraised value. |
| Assessed value | A tax assessor's determination of the value of a home in order to calculate a tax base. |
| Assessment | The amount of tax due to local government. May also refer to the amount due to local government or to common owners of a property (e.g., a homeowner's association) for a special payment to cover expenses for improvements or maintenance, such as new sewers or roads. |
| Assessment | The estimated value of a piece of real estate or a levy placed on property in addition to taxes. |
| Assessment rolls | A public record of the assessed value of property in the taxing jurisdiction. |
| Assessment rolls | A list of taxable property compiled by the assessor. |
| Assessor | A public official who establishes the value of a property for taxation purposes. |
| 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). |
| Assets | Items of value which include cash, real estate, securities and investments. |
| Assignment | The method of transferring a right or contract, such as the terms of a loan, from one person to another. |
| Assignor | A person who transfers rights and interests of a property. |
| Assumable | A mortgage loan which can be transferred to another person without a change in the terms of the loan. VA and FHA loans are assumable, FHLMC and FNMA are not. |
| Assumable loan | A home loan that allows a new purchaser of the home to take over ("assume") the loan obligations of the seller when a home is sold. |
| Assumable Mortgage | A mortgage that can be taken over by the buyer when the house is sold. |
| Assumable mortgage | A mortgage that can be transferred to another borrower. |
| Assumption | The buyer's acceptance of liability for the seller's existing home loan. See assumable loan. |
| Assumption clause | A provision in an assumable loan that allows a buyer to assume responsibility for the home loan from the seller. The loan does not need to be paid in full by the original borrower (seller) upon sale or transfer of the property. |
| Assumption fee | The fee paid to a lender (usually by the buyer) for the lender's agreement to start collecting payment from the buyer instead of the original borrower (seller). |
| Assumption fee | A fee the lender charges to process new records for a buyer who assumes an existing loan. |
| Assumption of Note | Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed of trust. The lender usually must approve the new debtor in order to release the existing debtor (usually the seller) from liability. |
| Average price | The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes. |
| Avigation Easement | An easement over private property abut-ting an airport runway, which limits the height of crops, trees, structures. etc., in the aircraft's take off and landing path. |
| Avigation easement | An easement over private property near an airport that limits the height of structures and trees. |
| Awning windows | Single-sash windows that tilt outward and up. |
| Back fill | Soil used to solidify the foundation of a structure. |
| Back Ratio | See Debt-to-Income Ratio |
| Back title letter | A letter that a title insurance company gives to an attorney who then examines the title for insurance purposes. |
| Back-to-back escrow | Arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time. |
| Backup offer | A secondary bid for a property that the seller will accept if the first offer fails. |
| Backwater valve | A valve in a sewer line that prevents sewage from flowing back into a house. |
| Balance sheet | A financial statement that shows an individual's assets, liabilities, and net worth as of a specific date. |
| Balance sheet | A statement that shows the assets, liabilities and net worth of an individual. |
| Balloon (Payment) Mortgage | Usually a short-term, fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract. |
| Balloon loan | A loan that has level monthly payments that will amortize it over a stated term (e.g., 30 years) but that requires a lump sum payment of the entire principal balance at the end of a shorter term (e.g., 10 years). |
| Balloon loan | A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principal. |
| Balloon Note | A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a "balloon" is due at maturity. |
| Balloon payment | The final lump sum payment that is made at the end of the shorter term for a balloon loan and pays the loan in full. |
| Balloon Payment | The unpaid principal amount of a loan due on a specific date in the future. Usually the amount that must be paid in a lump sum at the end of the term. |
| Balloon-frame construction | A type of framing used in two-story homes in which studs extend from the ground to the ceiling of the second floor. |
| Balustrade | Railing held up by a set of posts on a porch or stairway. |
| Bankrupt | A person, firm, or corporation that is financially unable to pay debts when due. The debtor seeks relief through a court proceeding to work out a payment schedule or erase debts. In some cases, the debtor must surrender control of all assets to a court-appointed trustee. |
| Bankrupt | One who is adjudicated a bankrupt by a court having proper jurisdiction. The bankruptcy may be voluntary (petitioned by the bankrupt) or involuntary (petitioned by the creditors of the bankrupt). |
| Bankruptcy | A proceeding in a federal court in which a debtor who is financially unable to pay debts when due seeks relief to work out a payment schedule or erase debts. |
| Bankruptcy | Proceedings under federal bankruptcy statutes to relieve a debtor (bankrupt) from insurmountable debt. The bankrupt's property is distributed by the court to the creditors as full satisfactions of the debts, in accordance with certain priorities and exemptions. Voluntary bankruptcy is petitioned by the debtor for, involuntary by the creditors. |
| Bankruptcy | A proceeding in which an insolvent debtor can obtain relief from payment of certain obligations. Bankruptcies remain on a credit record for seven years and can severely limit a person's ability to borrow. |
| Bargain sale | The sale of a piece of property for less than market value. |
| Baseboard | Any board or molding found at the bottom of an interior wall. |
| Baseboard electric heat | Heating units installed in the floor that can be controlled by a central thermostat. |
| Basement | The area of a home below ground level. |
| Basis Point | A basis point is one one-hundredth of one percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points. |
| Bay | The opening between two columns or walls that forms a space. |
| Bay window | A window that projects outward in a curve. |
| Bearing wall | A wall that supports its own weight in addition to other parts of a structure. |
| Before And After Method | An appraisal method used in both condemnation and modernization. In condemnation the method is used in a partial taking. The value of the total land owned by A, for example, is $1.00 per sq. ft. After a partial taking, the remaining land of A is worth $.75 per sq. ft. A should receive $1.00 per sq. ft. for the property taken plus $.25 per sq. ft. for the remaining parcel. In the event the remaining property is worth $1.25 after the taking (increased value), the payment to A could be less than the value of the property taken. In modernization, an appraiser may take the value of property before and after remodeling to determine if the value increased more than modernization costs. |
| Before-tax income | Total income before taxes are deducted. |
| Beneficiary | The Person who is entitled to receive funds of property under the terms and provisions of a will, trust, insurance policy or security instrument. In connection with a mortgage loan the beneficiary is the lender. |
| Beneficiary | The lender who makes a loan, also called a mortgagee. The person borrowing money is the mortgagor. |
| Bequest | Personal property given to a person through a will. |
| Betterment | An improvement that increases a property's value as opposed to repairs that maintain the value. |
| Bidding war | Offers from multiple buyers for a piece of property. Agents also sometimes compete to list a house for sale. |
| Bilateral contract | A contract in which the parties involved give mutual promises. Also called "reciprocal" contracts. |
| Bill of sale | A written document that transfers title to personal property from seller to buyer. |
| Bill of sale | A document that transfers ownership of personal property. |
| Binder | A report issued by a title insurance company that details the condition of a home's title. and provides guidelines for a title insurance policy. |
| Biweekly | Also known as accelerated mortgages. Biweeklies reduce interest expense and build home equity faster than monthly payments. |
| Biweekly mortgage | A mortgage that requires payments every two weeks and helps repay the loan over a shorter term. |
| Biweekly payment loan | A loan 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 loan, and they are usually drafted from the borrower's bank account. The result for the borrower is faster amortization leading to substantial interest savings from faster principal reduction. |
| Blanket insurance policy | A policy that covers more than one person or piece of property. |
| Blanket Mortgage | (1) A mortgage covering more than one property of the mortgagor, such as a mortgage covering all the lots of a builder in a subdivision. (2) A mortgage covering all real property of the mortgagor, both present and future. When used in this meaning it is also called a "general mortgage". |
| Blanket mortgage | A mortgage that covers more than one property owned by the same borrower. |
| Blighted area | A neighborhood that has deteriorated. |
| Blind nailing | Nails driven into a wall and concealed with putty. |
| Blue sky laws | Regulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks. |
| Blue-ribbon condition | A house maintained close to its original condition. Also called mint condition. |
| Board foot | Measurement of lumber that is the equivalent of 144 cubic inches. |
| Board of Equalization | A state board charged with ensuring that local property taxes are assessed in a uniform manner. |
| Board-and-batten siding | Siding is composed of 8- to 12-inch wide wooden boards nailed vertically to create a barn-like exterior. |
| Boilerplate | Form language used in deeds, mortgages and other documents. Details can be added by individual parties. |
| Bona fide | A legal term that refers to actions or persons that are honest and in good faith. |
| Bona Fide Purchaser | A purchaser in good faith. for valuable consideration, without notice or knowledge of adverse claims of others. Sometimes abbreviated B.F.P. |
| Bond | An interest-bearing certificate of debt with a maturity date. A real estate bond is a written obligation usually secured by a mortgage or a deed of trust. |
| Bond | An agreement that insures one party against loss by acts or defaults of another party. |
| Book Depreciation | Depreciation reserved (on the books) by an owner for future replacement or retirement of an asset. |
| Book value | The value of a property as a capital asset based on its cost plus any additions, minus depreciation. |
| Boring test | An analysis of soil in which holes are bored into the ground and samples are removed. |
| Borough | A part of a city, having authority over certain local matters. The best known boroughs are the five boroughs of New York City. |
| Borough | A section of a city that has authority over local matters. |
| Borrow | Sand, gravel or other material used for grading. |
| Borrow pit | The hole at a site that has been excavated. |
| Boulevard | A street lined with trees or constructed with a landscaped median. |
| Boundary | The dividing line between two adjacent properties. |
| Braced framing | A construction method in two-story homes in which the frame is reinforced with posts and braces. |
| Breach | A violation of terms of any legal obligation. |
| Breach of contract | The failure to perform provisions of a contractwithout a legal excuse. |
| Breach of covenant | The failure to obey a legal agreement. |
| Breach Of Warranty | In real property, the failure of the seller to pass title as either expressed or implied (by law) in the conveyancing document. |
| Breach of warranty | A seller's inability to pass clear title to a buyer. |
| Break even point | Point at which total income equals total expenses. |
| Break-even point | The point in which the owner's rental income matches expenses and debt. |
| Breast Height | The height at which the diameter of a tree is measured. A height of 4 1/2 feet above the ground level. The abbreviation D.B.H. (diameter-breast-height) is usually used. |
| Breast height | The height at which the diameter of a tree is measured: four feet, six inches above the ground. |
| Breezeway | A roofed passageway with open sides. |
| Brick | Building material made from clay molded into oblong blocks and fired in a kiln. |
| Bridge loan | A type of mortgage financing between the termination of one loan and the start of another loan. For example, a mortgage secured by the borrower's present home (which is usually up 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 a "swing loan." |
| Bridge loan | A short-term loan for borrowers who need more time to find permanent financing. |
| Broker | An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services. |
| Broker | A person who is normally licensed by the state and who, for a commission or a fee, assists in negotiating a real estate transaction or negotiating the terms of a home loan. See mortgage broker. |
| Broker, Real Estate | One who is licensed by the state to carry on the business of dealing in real estate. A broker may receive a commission for his or her part in bringing together a buyer and seller, landlord and tenant, or parties to an exchange. |
| Brokerage | The act of bringing together two or more parties in exchange for a fee or commission. |
| Broom clean | The ideal condition of a building when it is turned over to an owner or tenant. |
| Brownstone | A vintage row house constructed of red sandstone. |
| Budget | A detailed plan of income and expenses expected over a certain period of time. A budget can provide guidelines for managing future investments and expenses. |
| Buffer strip | A parcel of land that separates two or more properties. |
| Builder upgrades | Extra house features or better finishing materials that a builder offers. |
| Building And Loan Association | An organization for the purpose of accumulating a fund by subscription and savings of its members, to assist them with loans for building or purchasing real estate. |
| Building and loan association | An organization that raises money to helps its members purchase real estate or construct a building. |
| Building code | Local regulations that specify minimum structural requirements for design of, construction of, and materials used in a home or office building. Building codes are based on safety and health standards. |
| Building code | A comprehensive set of laws that controls the construction or remodeling of a home or other structure. |
| Building inspector | A city or county employee who enforces the building code and ensures that work is correctly performed. |
| Building line or setback | Guidelines that limit how close an owner can build to the street or an adjacent property. |
| Building moratorium | A halt on home construction to slow the rate of development. |
| Building paper | A thick, water-resistant paper that serves as insulation. |
| Building permit | A permit issued by a local government agency that allows the construction of home or renovation of a house. |
| Building restrictions | Regulations that limit the manner in which property can be used. |
| Built-ins | Appliances or other items that are framed into a home or permanently attached. |
| Bulkhead | A retaining wall designed to hold back water from the ocean or another body of water. |
| Bundle of rights | The various interests or rights an owner has in a property. |
| Bungalow | A small one-story house or cottage. |
| Butterfly roof | A roof formed by two gables that dip in the middle to resemble a butterfly's wings. |
| Buydown | When the lender and/or the home builder subsidizes the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. |
| Buydown | A temporary buydown gives a borrower a reduced monthly payment during the first few years of a home loan and is typically paid for in an initial lump sum made by the seller, lender, or borrower. A permanent buydown is paid the same way but reduces the interest rate over the entire life of a home loan. |
| Buydown | A payment to the lender from the seller, buyer, third party, or some combination of these, causing the lender to reduce the interest rate during the early years of a loan. The buydown is usually for the first 1 to 5 years of the loan. |
| Buydown account | An account in which funds are held so that they can be applied as part of the monthly loan payment as each payment comes due during the period that an interest rate buydown plan is in effect. For example, if a seller agrees to help reduce a buyer's monthly payment during the first year of a loan, the seller may put money in a buydown account which is then paid to the lender each month to reduce the buyer's monthly payment. This is more commonly done through a buydown paid directly to the lender at closing. |
| Buy-down mortgage | A home loan in which the lender receives a premium as an inducement to reduce the interest rate during the early years of the mortgage. |
| Buyer broker | A real estate broker who exclusively represents the buyer's interests in a transaction and whose commission is paid by the buyer rather than the seller. |
| Buyer's market | A slow real estate market in which buyers have the advantage. |
| Buyer's remorse | An emotion felt by first-time homebuyers after signing a sales contract or closing the purchase of a house. |
| Buy-Sell Offer | An offer by one owner of a business or real estate to buy out the interest of another owner of the same business or real estate (a partner or other shareholder), or to sell the offerer's interest at the same price or proportionate price if unequal ownership. Example: A and B each own a 112 interest in lot 1. A offers to buy B's interest for $10,000 or to sell A's interest to B for $10,000. Theoretically very fair, since B has the option to buy or sell. However, B's interest may be worth $12,000, but B is financially unable to buy A's interest (also worth $12,000). |
| Bylaws | The rules and regulations that a homeowners association or corporation adopts to govern activities. |
| Call | In a metes and bounds description, the angle and distance of a given line or arc. Each call is usually preceded by the word then or thence. Example: N 220 E 100' (lst. call), thence N 800 E 1W (2nd. call). |
| Call option | A provision in a loan that gives the lender the right to accelerate the debt, and require for full payment of the loan immediately, at the end of a specified period or for specified reason. |
| Call option | A clause in a loan agreement that allows a lender to ask for the balance at any time. |
| Can lights | Cylindrical chambers with bulbs recessed into the ceiling. |
| Cancellation Clause | A clause in a lease or other contract, setting forth the conditions under which each party may cancel or terminate the agreement. The conditions may be as simple as giving notice or complex and require payment by the party desiring to cancel. |
| Cancellation clause | A clause that details the conditions under which each party may terminate the agreement. |
| Cantilever | A projecting structure supported on one end, such as a balcony. |
| Cap | A provision of an adjustable rate mortgage that limits how much the interest rate or mortgage payments may change. |
| Cap | A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or loan payments may increase or decrease. In upward rate markets, it protects the borrower from large increases in the interest rate or monthly payment. See lifetime rate cap, periodic payment cap, and periodic rate cap. |
| Cap | A limit on the amount the interest rate or monthly payment can increase in an adjustable-rate mortgage. |
| Cape Cod style | A wood-frame or shingled house with a steep roof and several windows projecting from the second floor. |
| Capital | (1) Money used to create income, either as an investment in a business or an income property. (2) The money or property comprising the wealth owned or used by a person or business enterprise. (3) The accumulated wealth of a person or business. (4) The net worth of a business represented by the amount by which its assets exceed liabilities. |
| Capital Assets | Assets of a permanent nature used to produce income, such as machinery, buildings, equipment, land, etc. Must be distinguished from inventory. A machine which makes pencils, for example, would be a capital asset to a pencil manufacturer, but inventory to the company whose business is to sell such machines. |
| Capital expenditure | The cost of an improvement made to extend the useful life of a property or to add to its value, such as adding a room. The cost of repairing a property is not a capital expenditure. Capital expenditures are appreciated over their useful life; repairs are subtracted from income for the current year. |
| Capital expenditure | The cost of making improvements on a property. |
| Capital Gains | Gains realized from the sale of capital assets. Generally, the difference between cost and selling price, less certain deductible expenses. Used mainly for income tax purposes. |
| Capital gains | Profits an investor makes from the sale of real estate or investments. |
| Capital gains tax | A tax placed on the profits from the sale of real estate or investments. |
| Capital improvement | Any structure or component erected as a permanent improvement to real property that adds to its value and useful life. See capital expenditure. |
| Capital improvement | Any improvement that extends the life or increases the value of a piece of property. |
| Capitalization | A mathematical formula that investors use to compute the value of a property based on net income. |
| Capitalization rate | The percentage rate of return estimated from the net income of a piece of property. |
| Caravan | An inspection of newly listed properties, either by the entire sales staff of an office or by sales personnel from more than one office in conjunction with a multiple listing group. Generally conducted on a regular basis. |
| Caravan | A group of real estate agents who tour a house that has been recently listed for sale. |
| Carport | A roof that covers a driveway or other parking area. |
| Carrying Charges | The costs involved in keeping a property which is intended to produce income (either by sale or rent) but has not yet done so. |
| Casement window | A window hinged on its sides to allow it to swing open vertically. |
| Cash available for closing | Borrower funds available to cover down payment and closing costs. If lending guidelines require the borrower to have cash reserves at the time the loan closes or that the down payment come from certain sources, borrower's cash available for closing does not include cash reserves or money from other sources. |
| Cash flow | The amount of cash a rental property investor receives after deducting operating expenses and loan payments from gross income. |
| Cashier's check | A check the bank draws on itself rather than on a depositor's account. |
| Cash-out refinance | A refinance transaction in which the new loan amount exceeds the total of the principal balance of the existing first mortgage and any secondary mortgages or liens, together with closing costs and points for the new loan. This excess is usually given to the borrower in cash and can often be used for debt consolidation, home improvement, or any other purpose. The borrower effectively borrows against the home equity. |
| Cash-out refinance | The refinancing of a mortgage in which the money received from the new loan is greater than the amount due on the old loan. The borrower can use the extra funds in any manner. |
| Cathedral ceiling | A high open ceiling formed by finishing exposed roof rafters. |
| Caulk | An acrylic or silicon sealant used to fill cracks, crevices and holes in a home. |
| Caveat | A formal notice, that asks a court to suspend action until the party which filed the challenge can be heard. |
| Caveat Emptor | Let the buyer beware. Legal maxim stating that the buyer takes the risk regarding quality or condition of the item purchased, unless protected by warranty or there is misrepresentation. Modernly, consumer protection laws have placed more responsibility for disclosure on the seller and broker. |
| Caveat emptor | A legal principle derived from Latin than means "let the buyer beware." |
| Cavedium | A courtyard or atrium. |
| "CC and Rs (Covenants, Conditions and Restrictions) " | Limitations placed on the use and enjoyment of real property. These are found most often in condominiums and planned unit developments. |
| Ceiling | The maximum interest rate that can accrue on a variable rate loan or adjustable rate mortgage (ARM). See lifetime rate cap. |
| Ceiling height | The standard height of a ceiling is eight feet. |
| Central air conditioning | A device that generates cold air through an outside unit that is connected to ductwork inside the house. |
| Central business district | The area of a city where most large businesses are located. |
| Certificate of Deposit (CD) | A document which shows that the bearer has a specified amount of money on deposit with a bank, stock-brokerage firm or other financial institution. |
| Certificate of deposit index | An index based on the interest rates on six-month CDs. It used to determine the interest rate for some adjustable-rate mortgages. |
| Certificate of eligibility | A document issued by the federal government certifying a veteran's eligibility for a Department of Veterans Affairs (VA) loan. |
| Certificate of occupancy | A document which states that a home or other building has met all building codes and is suitable for habitation. |
| 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 loan, based on an approved appraisal. |
| Certificate of sale | A document issued at a judicial sale, which entitles the buyer to receive a deed after court confirmation of the purchase of the property. |
| Certificate of title | A statement provided by an abstract company, title company, or attorney stating who holds title to real estate based on the public record. |
| Certificate Of Title | In areas where attorneys examine abstractor chains of title, a written opinion, executed by the examining attorney, stating that title is vested as stated in the abstract. |
| Chain of title | The history of all of the documents affecting title to a parcel of real property, starting with the earliest existing document and ending with the most recent. |
| Chain of Title | A chronological list of recorded instruments tracing title to land, from the original owner to the present owner. |
| Chains And Links | Measurements. In real estate measurements (surveying) a chain is 66' long or 100 links, each link being 7.92." The measurement may change when used in fields other than surveying. |
| Chair railing | Decorative trim installed on a wall about 32 inches above the floor, which protects against scuffs from furniture. |
| Change frequency | The adjustment schedule on an adjustable-rate mortgage. |
| Change order | A modification of the construction contract to authorize a change in the work, an adjustment in the amount of the contract or a change in the contract time. The owner, architect and contractor must sign the change. |
| Chattel | Personal property such as furniture, clothing or a car. |
| Chattel mortgage | A lien on personal property used as collateral for a loan. |
| Chimney back | The back wall or lining of a fireplace or furnace chimney. |
| Chimney flue | The passage inside a chimney that channels smoke and heat to the outside. |
| Chimney pot | A short pipe at the top of a chimney that increases ventilation to the fireplace and reduces smoke. |
| Cinder block | A block made of ash and cement that is used in construction. |
| Cinder fill | Cinders used below a basement or around a foundation to promote drainage. |
| Circuit breaker | An electric fuse that activates or deactivates a circuit. |
| Cistern | A tank used to store rainwater. |
| Classified Property Tax | Property tax which varies in rate depending on the use (zoning classification) of the property. |
| Classified property tax | A tax that varies in rate depending on the use of the property. |
| Clear Title | An interest in land which is not encumbered with defects. |
| Clear title | A title that is marketable and is free of liens or disputed legal questions as to ownership of the property. |
| Closing | The final procedure in which documents are executed, closing costs are paid and the loan is completed. It is sometimes referred to as settlement. |
| Closing | A meeting at which all documents are signed and all expenses are paid to transfer ownership of property. Also called "settlement." |
| Closing | (1) In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed. (2) A selling term meaning the point at which the client or customer is asked to agree to the sale or purchase and sign the contract. (3) The final call in a metes and bounds legal description which "closes" the boundaries of the property. |
| Closing | The final procedure in which documents are signed and recorded, and the property is transferred. |
| Closing cost item | A fee or amount that a home buyer must pay at closing for a particular service, tax, or product. Closing costs are made up of individual closing cost items such as origination fees and attorney's fees. Many closing cost items are included as numbered items on the HUD-1 settlement statement. |
| Closing Costs | Expenses over and above the sales price of a property incurred by buyers and sellers in transferring ownership of a property. In a refinance, it is the costs associated with the new loan. |
| Closing costs | Various expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include items such as broker's commissions, discount points, origination fees, attorney's fees, taxes, title insurance premiums, escrow agent fees, and charges for obtaining appraisals, inspections and surveys. Closing costs will vary according to the area of the country. Lenders or real estate professionals often provide estimates of closing costs to prospective homebuyers even before the HUD-1 settlement statement is delivered. |
| Closing Costs | Expenses, beyond the selling price, such as loan fees, title fees, etc. Paid when documents are executed and/or recorded and the sale is complete. |
| Closing statement | An accounting of funds given to both buyer and seller before real estate is sold. See HUD-1 settlement statement. |
| Closing Statement | A summary, in the form of a balance sheet, showing the amounts of debits and credits to which each party to a real estate transaction is entitled upon closing. |
| 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 | An outstanding claim or lien, revealed by a title search, that adversely affects the owner's title to real estate. Usually, clouds on title cannot be removed except by a quitclaim deed, release, or court action. |
| Cloud On Title | An invalid encumbrance on real property, which, if valid, would affect the rights of the owner. For example: A sells lot 1, tract 1. to B. The deed is mistakenly drawn to read lot 2 by the recording of the erroneous deed. The cloud may be removed by quitclaim deed, or, it necessary, by court action. |
| Cloud on title | An invalid encumbrance on real property. |
| Cluster development | A method of squeezing more homes into less space. |
| Co-Borrower | If more than one person will be responsible for repaying the loan, the second person listed on the application is the Co-Borrower. If there will be more than one borrower, either one can be listed as the Borrower and/or Co-Borrower. |
| Codicil | A change to a will that adds or subtracts provisions or clarifies portions of the document. |
| Co-housing | Individual housing units that are clustered around a common building where residents share cooking and other activities. |
| Coign | The cornerstone of a building that differs in shape or color from the rest of the wall. |
| Coinsurance | A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between the amount of the policy and a specified percentage of the actual value of the property insured at the time of the loss. |
| Coinsurance | A sharing of the risk of an insurance policy by more than one insurer. Usually one insurer is liable up to a certain amount, the other liable over that amount. |
| Co-insurance | Coverage that involves the use of two or more insurers.. |
| Collar beam | The structural element that connects roof rafters. |
| Collateral | An asset (such as a car or a home) that is pledged as security for 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 or promissory note. |
| Collateral security | Additional security that a borrower supplies to obtain a loan. |
| Collection | The efforts used to bring a delinquent loan current and, if necessary, to file legal papers and notices to proceed with foreclosure. |
| Collection | The series of steps a lender takes to bring a delinquent mortgage up to date. |
| Collusion | The action of two or more people to break the law. |
| Colonia | Unincorporated communities along the U.S.-Mexico border. |
| Column | A slender upright structure that consists of a base, a round or square shaft and a capital. |
| Column footing | The support base for a load-bearing column. The footing is usually made of reinforced concrete. |
| Co-maker | A person who signs a promissory note with the borrower and assumes responsibility for the loan. |
| Combination door | An outer door with interchangeable screen and glass panels. |
| Combination window | A window with interchangeable screen and glass panels. |
| Combined Loan to Value (CLTV) | The relationship of the total of the first and any subordinate mortgages to the appraised value or sales price, whichever is the lesser of the two. |
| Combined loan to value (CLTV) | The ratio of the total amount borrowed on all mortgages against a property compared to the appraised value of the property. For example, if you have an $80,000 1st mortgage and a $10,000 2nd mortgage on a home with an appraised value of $100,000, the CLTV is 90% ($80,000+$10,000 = $90,000 / $100,000 = 90%). |
| Commercial bank | A financial institution that provides a broad range of services, from checking and savings accounts to business loans and credit cards. |
| Commercial Property | Property which is zoned "commercial" (for business use). Property such as stores, restaurants, etc., falling between residential and industrial. |
| Commercial property | An area that is zoned for businesses. |
| Commingling | To mix funds held in trust with other funds. For example: A broker or builder mixes deposits (should be in a trust account) with his funds by putting the deposits in his general account. Although commingling is in itself a violation for which a broker may lose his license, it does not mean that, by commingling, the broker or builder intended to misappropriate the funds. |
| Commingling | The mixing of money held in trust with other funds. |
| 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 (such as 3%, 5%, or 6%). |
| Commission | The negotiable percentage of the sales price of a home that is paid to the agents of the buyer and seller. |
| Commitment | A promise by a lender to make a loan with specific terms for a specified period. |
| Commitment fee | The fee a lender charges for promising to make a loan. |
| Commitment letter | A formal notification from a lender stating that the borrower's loan has been conditionally approved and specifying the terms under which lender agrees make the loan. Also known as a "loan commitment." |
| Common area | An area inside a housing development that is owned by all residents. |
| Common area assessments | Payments required of individual unit owners in a condominium or planned unit development (PUD) project for additional capital to defray homeowners' association costs and expenses and to repair, replace, maintain, improve, or operate the common areas of the project. |
| 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. |
| Common law | A body of laws based on custom, usage and rulings by courts in various jurisdictions. |
| Common-area assessments | Fees paid by the owners of a condominium project or planned-unit development to maintain, repair, improve or operate common areas. |
| Common-interest development | A project composed of individually owned units that share usage and financial responsibility for common areas. |
| Community property | In some Western and Southwestern states, the law specifies that property acquired during a marriage is presumed to be owned jointly by the husband and wife unless acquired as separate property of one spouse or the other. |
| Community property | Property accumulated through the joint efforts of husband and wife. It is a classification of property peculiar to certain states. |
| Community Reinvestment Act | A federal law that encourages financial institutions to loan money in the neighborhoods where minority depositors live. |
| Community secondsŪ | An alternative financing option for low- and moderate-income households under which an investor purchases a first mortgage that has a subsidized second mortgage behind it. The second mortgage may be issued by a state, county, or local housing agency, foundation, or nonprofit organization. Payment on the second mortgage is often deferred and carries a very low interest rate (or no interest rate at all). Part or all of the second mortgage debt may be forgiven depending on how long the buyer remains in the home. |
| Commute | The distance and time it takes a person to reach the workplace. |
| Comparables | Properties used as comparisons to determine the value of a certain property. |
| Comparables (comps) | An abbreviation for "comparable properties"; used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration; they have reasonably the same size, location, and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property. |
| Comparative market analysis | An estimate of the value of a property based on an analysis of sales of properties with similar characteristics. |
| Competent | A term for a buyer who is legally fit to enter into a sales contract. |
| Compound interest | Interest paid on the principal balance and on the accrued and unpaid interest. |
| Compound interest | The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan. |
| Concrete tilt-up | The process of pouring concrete into forms on the ground, allowing the forms to harden and then raising the material to a vertical position to form walls. |
| Condemnation | (1) Declaration that a building is unfit for use or is dangerous and must be destroyed; (2) taking of private property for a public use (such as a park, street or school) through an exercise of the right of eminent domain. |
| Condemnation | The process the government uses to take private property for public use without the consent of the owner. |
| Conditional commitment | A promise by a lender to make a loan if the borrower meets certain conditions. |
| Conditional Sales Contract | A sale in which the title to property or goods remains with the seller until the purchaser has fulfilled the terms of the contract, usually payment in full. |
| Condominium | A real estate project in which each unit owner has title to a unit in a multi-unit building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas. |
| Condominium | A structure of two or more units, the interior space of which are individually owned: the balance of the property (both land and building) is owned in common by the owners of the individual units. The size of each unit is measured from the interior surfaces (exclusive of paint or other finishes) of the exterior walls, floors, and ceiling. The balance of the property is called the common area. |
| Condominium | Individual units in a building or development in which owners hold title to the interior space while common areas such as parking lots, community rooms and recreational areas are owned by all the residents. |
| Condominium conversion | Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership. |
| Condominium conversion | The change in title from a single owner of an entire project or building to multiple owners of individual units. |
| Condominium hotel (condotel) | A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned. |
| Conduit | A metal pipe that houses electrical wiring. |
| Conforming loan | A home loan with a maximum loan amount of $333,700 that is eligible for purchase by FNMA and FHLMC. |
| Consent judgment | A binding written agreement between two parties to have a judgment entered and recorded. |
| Conservator | A court-appointed guardian. |
| Consideration | A required element in all contracts by which some-thing of value, including a promise, is exchanged for the act or promise of another. |
| Consideration | Anything that is legal, has value and induces a person to enter into a contract. |
| Construction budget | The funding that an owner arranges for the construction of a project. |
| Construction documents | Drawings and specifications from an architect that provide detailed requirements for the construction of a project. |
| Construction loan | A short-term, interim loan for financing the cost of home construction. The lender makes payments to the builder at periodic intervals as the work progresses. |
| Construction loan | Short-term loans a lender makes for the construction of homes and buildings. The lender disburses the funds in stages. |
| Construction to permanent loan | The conversion of a construction loan to a longer-term traditional mortgage after construction has been completed. |
| Consumer Credit Counseling Service (CCCS) | A nationwide, nonprofit organization that helps consumers get out of debt and improve their credit profile. National headquarters: 8701 Georgia Avenue., Suite 507, Silver Springs, MD 20910. Phone: (800) 388-2227. |
| Consumer reporting agency (or bureau) | An organization that prepares reports that lenders use to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from creditors such as mortgage lenders, credit card companies, department stores, etc. |
| Contemporary style | A design that features streamlined shapes, large unadorned windows and industrial materials. |
| Contiguous lots | Pieces of property that are adjoined. |
| 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. |
| Contingency | Action conditioned upon a certain event. Acceptance of the terms of a contract based on something else happening or certain conditions being met. |
| Contingency listing | A property listing with a special condition attached. |
| Contingent fee | A fee that must be paid if a certain event occurs. |
| Contingent Liabilities | When an applicant is a co-signer/guarantor on a debt (including mortgage debt) for another person. |
| Contract | An oral or written agreement to do or not do something. |
| Contract | An agreement between two or more parties that creates or modifies an existing relationship. |
| Contract for deed | A contract in which the seller agrees to defer all or part of the purchase price for a specified period of time. |
| Contract to purchase | A contract the buyer initiates which details the purchase price and conditions of the transaction and is accepted by the seller. Also known as an agreement of sale. |
| Contractor | The individual who contracts for the construction of a home or project. |
| Contractual lien | A voluntary obligation such as a mortgage or trust deed. |
| Controlled growth | Any restrictions imposed on the amount or type of new development in an area. |
| Conventional loan | A home loan that is not insured or guaranteed by the federal government. Contrast with government loan. Can be for conforming or non-conforming loan amounts. |
| Conventional loan | A long-term loan a lender makes for the purchase of a home. |
| Convertibility clause | A provision in some adjustable rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed rate loan at specified times during the life of the loan. |
| Convertible adjustable-rate mortgage | A mortgage which starts as an adjustable-rate loan, but allows the borrower to convert the loan to a fixed-rate mortgage during a specified period of time. |
| Convertible ARM | A type of adjustable rate mortgage that provides an option to change the mortgage to a fixed rate mortgage for the remaining life of the original loan term under specified conditions. |
| Convertible ARM | An adjustable rate mortgage (ARM) that can be converted to a fixed rate loan under specified conditions. |
| Conveyance | The transfer of title or an interest in real property by means of a written instrument such as a deed of trust. |
| Conveyance tax | A tax imposed on the transfer of real property. |
| Cooperating broker | A real estate broker who finds a buyer for a property that another broker has listed. |
| Cooperative (co-op) | A type of multiple ownership in which the residents of a multi-unit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit. |
| Cooperative corporation | A business trust that holds the title to a cooperative residential building and grants occupancy rights to shareholders in the corporation. |
| Cooperative mortgages | Any loans related to a cooperative residential project. |
| Cooperative project | A project in which a corporation holds title and sells shares representing individual units to buyers who then receive a proprietary lease as their title. |
| Corner bead | A reinforcement placed in the corner where two walls intersect. |
| Corner influence | The effect on the value of a property because it is situated on a corner or near a corner. |
| Cornice | A horizontal molding that projects from the top of a structure or wall. |
| Corporate relocation | Arrangements under which an employer moves an employee to another area as part of the employer's normal course of business or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office capacity. |
| Corporate relocation | An arrangement by which employers pay to transfer and move employees. |
| Corrective work | Necessary or desired repairs to remedy problems uncovered by a home or specialized inspection. |
| Co-Signer | One who only signs the note and is as equally responsible for repayment as the borrower. |
| Co-signer | A person who signs a promissory note along with the borrower. A co-maker's signature helps to assure that the loan will be repaid. The borrower and the co-maker are jointly responsible for the repayment of the loan. |
| Co-signer | A second party who signs a promissory note and takes responsibility for the debt. |
| Cost of funds index (COFI) | An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco. |
| Cost-plus contract | A construction contract that determines the builder's profit based on a percentage of the cost of labor and materials. |
| Cottage | A small, one-story house. |
| Counteroffer | An implied rejection of an offer by proposing a new offer or by making conditional acceptance. |
| Counteroffer | A response to an offer. |
| Covenant | A promise in a mortgage or deed that requires or prevents certain uses of the property that, if violated, may result in loss or foreclosure of the property. |
| Covenant | A legal assurance or promise in a deed or other document, or implied by the law. |
| Covenants, conditions and restrictions (CC&Rs) | Rules and regulations for a development, such as acceptable landscaping or improvements that can be made to individual units. |
| Craftsman style | An architectural style that evolved as part of the Arts and Craft movement near the turn of the century. |
| Crawl space | The space between the ground and the first floor of a home, usually no higher than four feet. |
| Creative financing | Innovative home-financing arrangements that help sell a property. |
| Credit | An agreement in which a borrower receives money or something of value in exchange for a promise to repay the lender on specified terms at a later time. |
| Credit | The money a lender extends to a buyer for a commitment to repay the loan within a certain time frame. |
| Credit history | An evaluation of an individual's capacity and history of debt repayment. A credit history helps a lender to determine whether a potential borrower is likely to repay a loan in a timely manner. |
| Credit history | A record of an individual's current and past debt payments. |
| Credit life insurance | A type of insurance that pays off a loan if one of the borrowers dies while the policy is in force. |
| Credit life insurance | Insurance that pays off a mortgage in the event of the borrower's death. |
| Credit limit | The maximum amount that can be borrowed under the home equity line of credit. |
| Credit rating | An expression of creditworthiness based upon present financial condition and past credit history. |
| Credit rating | The degree of credit worthiness assigned to a person based on credit history and financial status. |
| 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. See merged credit report. |
| Credit report | A credit bureau report that shows a loan applicant's history of payments made on previous debts. Several companies issue credit reports, but the three largest are Trans Union Corp., Equifax and Experian (formerly TRW ). |
| Credit repository | Large companies that gather financial and credit information from various sources about individuals who have applied for credit. |
| Credit repository (credit bureau) | An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit. |
| Credit scoring | Credit scores are numerical values that rank individuals according to their credit history at a given point in time. Your score is based on your past payment history, the amount of credit you have outstanding, the amount of credit you have available, and other factors. According to Fannie Mae, one of the major investors in home loans, credit scores have proven to be very good predictors of whether a borrower will repay his or her loan. |
| Credit union | Nonprofit cooperative organizations that provide banking and financial services, including mortgages, home improvement loans and home equity loans, to their members. |
| Creditor | A person to whom money is owed. |
| Creditor | An individual or institution to whom a debt is owed. |
| Cross-bridging | The strengthening of a structure by bracing cross members between beams. |
| Cul de sac | A street or alley that is closed at one end. |
| Cumulative interest | Total interest accrued |
| Cupola | A dome-like structure that sits on top of a roof. |
| Curable defect | A deficiency in a property that is easy or inexpensive to fix, such as chipping paint. |
| Curb appeal | The first impression of a house as seen from the street. |
| Curtailment | A payment that reduces the principal balance of a loan. |
| Curtain wall | An exterior wall that encloses a yard or other area but does not provide any structural support to a home. |
| Custom builder | A builder who constructs a home or building based on plans created by the owner. |
| Custom home | A structure designed by an architect hired by the owner. |
| Damper | A movable plate in a fireplace that allows smoke and fumes to travel up the chimney's flue. |
| Days on the market | The period of time a property is listed for sale until it is sold or taken off the market |
| Deadbolt lock | Locks that require a key to open from the outside and a turn button from the inside. |
| Debt | An amount owed to another. See installment loan and revolving liability. |
| Debt | Any amount one person owes to another. |
| Debt-to-income | Ratio of your monthly debt obligation to gross monthly income. |
| Debt-to-Income Ratio | "A ratio used in conventional real estate financing that is based on the sum of the applicant's following monthly charges:
1- Monthly house expenses Payments on all installment debts with more than 10 months of payments remaining.
2- Alimony, child support or maintenance payments, with more than 10 months remaining.
3- Monthly payments on revolving or open-end accounts, regardless of the balance.
4- Car lease payments, regardless of the number payments remaining.
5- Aggregate negative net rental income from all investment properties owned.
6- Monthly mortgage payment (PITI) for second home.
The monthly charges are then divided by the applicant's stable monthly income." |
| Deck | A roofless, floored area that adjoins a house. |
| Declaration Of Trust | A written acknowledgement by one holding legal title to property that the property is held in trust for the benefit of another. |
| Declining Balance Method Of Depreciation | Depreciation by a fixed annual percentage of the balance after deducting each yearly depreciation amount. |
| Deed | A written instrument by which ownership of land is transferred. |
| Deed | Actually, any one of many conveyancing or financing instruments, but generally a conveyancing instrument, given to pass fee title to property upon sale. |
| Deed | The legal document that transfers ownership of a piece of property. |
| Deed of trust | The document used in some states instead of a mortgage; title is vested in a trustee to secure repayment of the loan. |
| Deed Of Trust | An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor) in favor of the lender (beneficiary), and reconveyed upon payment in full. |
| Deed of trust | A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan. |
| Deed-in-lieu | A deed given by a borrower to the lender to satisfy a debt and avoid foreclosure. Also called a "voluntary conveyance." |
| Deep-seal floor drain | A drain used to dispose of water from the basement floor to a sewer line. |
| Default | Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage. |
| Default | Failure to make loan payments on a timely basis or to comply with other requirements of a mortgage. |
| Default | The failure to fulfill a duty or promise or discharge an obligation, such as making monthly mortgage payments. |
| Defeasible Title | Title which is not absolute but possibly may be annulled or voided at a later date. For example: Title conveyed to A with condition that if A marries before age 30, title will go to B. A's title may be good (doesn't marry) or may be defeated (marries before 30). |
| Deferred interest | A gradual increase in the mortgage debt that occurs when the monthly installment is not sufficient for full application to both principal and interest. Actually, there will be an insufficient interest application. This interest shortage is added to the unpaid principal balance to create negative amortization. |
| Deferred maintenance | Any repair or maintenance of a piece of property that has been postponed, resulting in a decline in property value. |
| Deficiency Judgment | Commonly the amount for which the borrower is personally liable on a note and mortgage if the foreclosure sale does not bring enough to cover the debt. Actually the judgment is for the total amount and not for the deficiency, the recovery from the foreclosure sale being deducted from this amount. |
| Delinquency | Failure to make mortgage payments when due. |
| Delinquent mortgage | A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings. |
| Deliquency | Failure to make payments on time. This can lead to foreclosure. |
| Delivery | In conveyancing, the placing of the property in the actual or constructive possession of the grantee. Usually accomplished by delivery of a deed to the buyer, or by recording said deed. |
| Demand | The lender's statement of the amount due to pay of a loan. |
| Demand Note | A note having no date for repayment, but due on demand of the lender. |
| Density test | An analysis of soil to determine if the surface can support the foundation of a house. |
| Dentils | Small rectangular blocks that project from a building, usually under cornices or along rooflines. |
| Department of Veterans Affairs (VA) | An independent agency of the federal government which guarantees long-term, low or no-down payment mortgages to eligible veterans. |
| Department of veterans affairs (va) | An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans. |
| 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. See earnest money deposit. |
| Deposit | (1) Money given by the buyer with an offer to purchase. Shows good faith. Also called earnest money. (2) A natural accumulation of resources (oil, gold, etc.) which may be commercially recovered and marketed. |
| Deposit | Money given by the buyer with an offer to purchase property. Also called earnest money. |
| Depreciation | A decline in the value of property because of physical or economic changes such as wear and tear; the opposite of appreciation. |
| Depreciation | (1) Decrease in value to real property improvements caused by deterioration or obsolescence. (2) A loss in value as an accounting procedure to use as a deduction for income tax purposes. |
| Design/build | A project in which the owner contracts directly with an individual or company to perform design and construction. |
| Designer | Unlike architects, designers are limited to drawing blueprints. |
| Digital images | Images that are incorporated into house listings to give potential buyers a view of the property. |
| Dimension plans | Plans which show the layout of a house but are less detailed than full blueprints. |
| Direct Reduction Mortgage | An amortized mortgage. One on which principal and interest payments are paid at the same time (usually monthly) with interest being computed on the remaining balance. |
| Disability insurance | An insurance policy which covers an individual's ability to produce income. |
| Disclosure | A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint. |
| Discount Points | A one-time charge by the lender to increase the yield of the loan. Each point equals one percent of the loan amount. Typically the more points that are paid the lower the interest rate will be. However, the more points that are paid, the higher the costs will be at closing. |
| Discount Points | The fee associated with the note rate for your loan, the more discount points you pay the lower the rate you can buy, the fewer you pay, the higher your rate. If the rate is high enough, the loan is priced above par and these premium points are available to pay closing costs creating a no or low fee loan. |
| Discount points | Fees that a borrower pays at the time the lender makes the loan. A point equals 1 percent of the total loan amount. |
| Disposition of Real Estate Statement | A statement that the buyer will occupy the property being purchased even though the buyer owns other property. The buyer states that the other property will be sold or rented. Particulars must be given as to any loan on the property and the equity or rent to payment amounts. |
| Distressed property | Property that is in poor physical or financial condition. |
| Doc Stamps on the Deed | A Florida tax for the transfer of real property. The current tax rate is $.70 on each $100, or fraction thereof, of the sales price. |
| Doc Stamps on the Note | A Florida tax on the note. The current tax rate is $.35 for each $100, or fraction thereof, of the loan amount. |
| Document needs list | A list of documents a lender requires when a potential submits a loan application.. The required document |
