Dictionary Of Real Estate And Mortgage Terms: N To Z
Negative Amortization
An increase in principal balance which occurs when the monthly payments do not cover all of the interest cost. The interest cost which is not covered by the payment is added to the unpaid principal balance.
An arrangement whereby the Broker receives as commission all monies received above a minimum sales price agreed to by the owners and the Broker.
Loans that are above the loan limits set by FNMA and FHLMC. Also known as jumbo loans.
A property which does not conform to the zoning of an area.
A written promise to repay a certain sum of money on specified terms.
Impairment of desirability and usefulness brought about by changes in the art, design or process or from external influencing circumstances that make a property less desirable and valuable for a continuity or use.
A promise by one party to do a specified deed as the other party in turn performs a specific deed.
A federal government regulatory agency that oversees some commercial banks.
A federal government regulatory agency that oversees savings and loans.
A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions.
An authorization given by a property owner to a real estate Broker wherein said Broker is given the nonexclusive right to secure a purchaser; open listings may be given to any number of Brokers without liability to compensate any except the one who first secures a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer.
A fee or charge for work involved in the evaluation, preparation and submission of a proposed mortgage loan.
The individual (s) named on a deed that has been recorded at the local municipality.
Title insurance for the owner of property, rather than a lien holder.
The right to possess and use property to the exclusion of others.
Mortgage covering both real and personal property.
A mortgage, deed of trust or land contract which is given instead of cash.
The legal rule which prevents previous oral or written negotiations to a signed contract from changing the contract.
A release of a portion of property covered by a mortgage.
A mortgage on completed construction on the same property under one mortgage or trust deed.
Property which is movable. All property is either personality, realty or mixed.
A term that is frequently used when physical deterioration is intended. In a broad concept it may relate to those elements contributing to depreciation that are existent or inherent in the physical property itself, as distinguished from other and external circumstances that may influence its utilization. Not a clear or proper them without qualification and explanation.
Abbreviation for principal, interest, taxes and insurance, often combined in a single monthly mortgage payment.
A map or chart of a lot, subdivision or community, showing boundary lines, buildings and easements.
Abbreviation for private mortgage insurance: insurance issued by a company, which insures the lender against loss in the event that the borrower defaults on the mortgage.
Origination fees charged by the originating lender or broker and/or discount fees charge by lenders to increase the overall yield. A point is equal to one percent of the principal amount of your mortgage.
Loans held as an investment by a bank, savings and loan or credit union.
A written instrument authorizing a person to act as the agent of the person granting it, and a general power authorizing the agent to act generally in behalf of the principle. A special power limits the agent to a particular or specific act as: a landowner may grant an agent special power of attorney to convey a single and specific parcel of property. Under the provisions of a general power of attorney, the agent having the power may convey any or all property of the principal granting the general power of attorney.
Prepaid interest is the interest charged to borrowers at loan closing to pay for the cost of borrowing for a partial month. For example, if a loan closes on the 15th of the month and the first payment is due 45 days later, the lender will charge 15 days of prepaid interest.
Perorations of prepaid items of expense which are credited to the seller in the closing statement.
Full payment of the principal before the due date; occurs when a property is sold or the borrower refinances the existing loan.
Charge levied by the lender for paying off a mortgage loan before its maturity date.
The process of obtaining a real estate loan, including the consumer's completion of a loan application form, validation of the credit and property information, loan underwriting by the lender and closing of the mortgage loan.
Considered the permanent location of residency.
1) The outstanding balance of a loan. 2) A party to a real estate transaction. 3) The head of a real estate firm.
Private Mortgage Insurance (PMI)
Insurance which covers the portion of a mortgage loan above 80% thereby reducing the lenders risk to principal loss in the event of a borrowers default. The insurance coverage allows lenders to make higher loan-to-value ratios (95% LTV).
Charges for the lender's services associated with making the loan.
The rights of ownership. The right to use, possess, enjoy, and dispose of a thing in every legal way and to exclude everyone else from interfering with these rights. Property is generally classified into two groups, personal property and real property.
A tax levied by the local municipality or county on real and personal property.
The allocation of expenses, such as taxes between buyer and seller at closing based on the number of days the property is owned during the month of closing.
To divide in proportionate shares, such as taxes, insurance, rent, or other items.
A housing development where there is a homeowners association and common areas owned by the homeowners.
A mortgage used to finance the purchase of real property.
Calculations that are used in determining whether a borrower can qualify for a mortgage. They consist of two separate calculations: a housing expense as a percent of income ratio and total debt obligations as a percent of income ratio.
Quit Claim Deed
A deed operating as a release; intended to pass any title, interest or claim which the grantor may have in the property.
Land and anything permanently affixed to the land and those things attached to the building.
A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.
A pecuniary charge laid upon real property for public purposes.
Registered name for a member of the National Association Of Realtors.
Salesperson associated with a broker who is a member of a the National Association Of Realtors.
A synonym for real estate.
Setting forth in a deed or other writing some explanation for the transaction.
The act of writing or entering an instrument in a book or public record, usually in the office of the county clerk and recorder. Such recording constitutes notice to all persons of the rights or claims contained in the instrument. This type of notice is called "constructive notice" or "legal notice."
The right of the holder of a note secured by a mortgage or deed of trust to look personally to the borrower or endorser for payment.
The practice of refusing to provide loans or insurance in a certain neighborhood.
The repayment of a debt from the proceeds of a new loan using the same property as security.
A charge for a title insurance policy if a previous policy on the same property was issued within a specified period of time. Reissue is less than the original charge.
A method in investing real estate in a group, with certain tax advantages.
Annulling a contract and placing the parties to it in a position as if there had not been a contract.
An instrument releasing property from the lien of the mortgage, judgment, etc.
A federal regulation that requires lenders and mortgage brokers to disclose to borrowers, in advance, the fees required to obtain a mortgage loan.
Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and be binding only between the original seller and buyer.
Formerly, federal tax on a sale of real property. Canceled and replaced by state tax stamps.
A special program for the elderly that provides income until death. Payment requirements are arranged through the increase in the principal amount of the loan.
Pertaining to the banks of a river, stream, waterway, etc.
See agreement of sale.
Document issued by mortgagee when the mortgage is paid off.
Commonly known as a vacation home. This home is not rented and is occupied occasionally by the owners.
A loan secured by a mortgage or trust deed, which lien is junior to another mortgage or trust deed.
The buying and selling of mortgage notes between sophisticated investors such as pension funds, commercial banks, savings and loans and wall street firms.
An entity, such as FNMA or FHLMC, that buys mortgage loans for investment or sells them again to another secondary market investor. Secondary market investors do not service loans and do not collect payments from borrowers.
The buying and selling of first mortgages of trust deeds by banks, insurance companies, government agencies, and other mortgagers.
Real or personal property pledged by a borrower as additional protection for the lender's interest.
Agent who takes the seller as a client, is legally obligated to a set of fiduciary duties and is required to put the seller's interests above all other's.
An Underground tank in which sewage from the house is reduced to liquid by bacterial action and drained off.
Regulates the distance from the lot line to the point where improvements may be constructed.
See "closing".
This booklet gives an overview of the lending process and is required by HUD. It is provided to consumers after the loan application is completed.
A statement prepared by broker, escrow or lender giving a complete breakdown of the cost associated with a real estate transaction.
A deed given at the sheriff's sale in foreclosure of a mortgage.
A residential home that is not attached physically to another home.
A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, street lights, etc.
A lien that binds a specified piece of property, unlike a general lien, which is levied against all one's assets. It creates a right to retain something of value belonging to another person as compensation for labor, material, or money expended in that person's behalf. In some localities it is called "particular" lien or "specific" lien. (See lien).
A deed in which the grantor conveys title to the grantee and agrees to protect the grantee against title defects or claims asserted by the grantor and those persons whose right to assert a claim against the title arose during the period the grantor held title to the property. In a special warranty deed the grantor guarantees to the grantee that he has done nothing during the time he held title to the property which has, or which might in the future, impair the grantee's title.
Lawsuit requesting that a contract be exactly carried out, usually asking that the seller be ordered to convey the property as previously agreed.
An application developed by FNMA and FHLMC that is widely used in the mortgage industry.
Unique housing finance programs to assist first time home buyers and low to moderate housing groups. Each state and local group has different sets of criteria.
The law requires that certain contracts, such as agreements of sale, to be in writing in order to be enforceable.
An involuntary lien, includes tax liens, judgment liens, mechanic liens, etc.
A document which is recorded to change the trustee under the deed of trust.
Map or plat made by a licensed surveyor who measures land and charts its boundaries, improvements, and relationship to the property surrounding it. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description.
All rights of a joint tenant passes to the surviving joint tenant.
Equity created by the labor of the purchaser or borrower that increases the value of the property.
Tax as applied to real estate is an enforced charge imposed on persons, property, or income to be used to support the State. The governing body in turn utilizes the funds in the best interest of the general public.
Lien for nonpayment of taxes.
Public sale of property at an auction by a governmental authority, due to non payment of property taxes.
A holding, as of land, by any kind of title, occupancy of land, a house or the like under a lease or on payment of rent or tenure.
A tenancy which arises when a tenant holds over after expiration of his lease.
A tenancy which may be terminated at the will of either the Lessor or lessee.
A form of ownership by husband and wife whereby each owns the entire property. In event of the death of one, the survivor owns the property without probate.
Any person in possession of real property with the permission of the owner.
Having made a will before death.
Legal phrase in a contract requiring punctual performance of all obligations.
Often used interchangeably with the word ownership. It indicates the accumulation of all rights in property by the owner and others.
These companies charge various fees for their services.
An insurance policy which protects the insured (purchaser and lender) against loss arising from defects in title.
A review of the public records generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive covenants filed in the records, which would adversely affect the marketability or value of title.
A party who is given legal responsibility to hold property in the best interest of or "for the benefit of" another. The trustee is one placed in a position of responsibility for another, a responsibility enforceable in a court of law. (See deed of trust).
A federal government regulation that provides details of the cost of obtaining a mortgage loan. Lenders must provide this shortly after the loan application has been completed.
On a loan, claiming a rate of interest greater than permitted by law.
The act or process of estimating value; the amount of estimated value.
Most valuable type of deed in which the grantor makes formal assurance of title.
Income tax form that is provided by employers to employees that states the income and taxes paid in a calendar year.
The interest earned by an investor on his investment (or bank on the money it has lent). Also called Return.
The acts of an authorized local government establishing building codes, and setting forth regulations for property land usage.
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