[A] [B] [C][D] [E] [F] [H] [I] [J] [L] [M] [N] [P] [R] [S] [T] [W]

A

Amortization
The gradual paying off of a debt on an installment basis.
Appraisal
An estimate of value of real estate; the report stating and supporting the estimated value of realty.

B

Bill Consolidation Refinance
Equity is used to pay off bills, consolidating monthly obligations and lowering monthly payments. These debts are paid directly through Escrow. The advantage besides lowering monthly obligations, is the potential tax benefits gained.

Broker
A licenced person who negotiates the purchase and sale of real estate for another.

C

Cash-Out Refinance
This allows the borrower to cash out existing equity on the home. This cash could be used for home improvements, purchase an automobile, college tuition, vacation etc. It is also considered cash out if there is a second mortgage lien on the property.
Closing Statement
A statement of settlement made by a broker or an escrow company that reflects the financial position of the buyer and seller in that particular real estate transaction.
Community Property
Property accumulated and owned in common through joint efforts of husband and wife during their marriage.
Conforming Mortgage
Refers to loan amounts that conform to government service standards as determined by Fannie Mae & Freddie Mac. Conforming loans range in amount form $1 to $275,000. Although not all conforming loans are serviced by these government agencies, the mortgage industry has adopted the term to express loan amounts in this range.
Conventional Mortgage
A mortgage which is not FHA insured, or VA guaranteed.

D
Discount Points
A fee based on a percentage of a loan, charged by a lender, as a service charge, or as an amount needed to produce the same yield on an FHA or VA loan that he would receive in the conventional mortgage market; each point charged represents 1% of the loan amount and increase the interest rate by a 1/8 of one percent.

E
Earnest Money
Initial payment made by a purchaser of real estate as evidence of good faith.
Encumbrance
A claim, lein, charge or liability attached to and binding upon real property which affects or limits the title thereof.
Escrow
The deposit of instruments and funds with instructions to a third neutral party to carry out the provisions of an agreement or contract.
EZ Doc
Income Verification Documentation:Typically people who are in Buisness for Self file tax returns which don't show a true picture of take home, due to deductions etc. Lenders will look at 6, 12 or 24 months worth of personal bank statements (depending on the lender) and average the deposits over the reviewed period of time. Generally, they will not add any large deposits which seem out of the ordinary compared to the rest. Some lenders will utilize 12 or 24 months business bank statements, however will deduct a percentage for expenses (usually 25%). This form of documentation is considered a medium risk and is reflected in the interest rate.

F
Fee Simple
An estate in real property, by which the owner has the greatest power over the title which it is possible to have, being an absolute estate; an estate of inheritance belonging to the owner, that he may dispose of, trade, or will, as he chooses.

H
Hard Money Loans
Asset based loans. EXTREMELY fast closings with little, or no, documentation and verification. Equity in real estate and a repayment plan are the keys. Higher rates and fees are to be expected.

I
Intestate
A person who dies without a will, or with one which is defective in form.

J
Joint Tenancy
Ownership by two or more persons with rights of survivorship; all joint tenants own equal interests and have equal rights in the property; each owner is possessed of an undivided part of the whole.

L
Leasehold
An estate or right in real property held under a lease.
Lien
A right, given by law, whereby a creditor may satisfy a debt out of the proceeds of the sale of real or personal property belonging to the debtor; an encumbrance, usually naming property as security for payment of a debt or for the discharge of an obligation.
Lite Doc
Income Verification Documentation: Typically people who are in Buisness for Self file tax returns which don't show a true picture of take home, due to deductions etc. Lenders will look at 6, 12 or 24 months worth of personal bank statements (depending on the lender) and average the deposits over the reviewed period of time. Generally, they will not add any large deposits which seem out of the ordinary compared to the rest. Some lenders will utilize 12 or 24 months business bank statements, however will deduct a percentage for expenses (usually 25%). This form of documentation is considered a medium risk and is reflected in the interest rate.


M
Mortgage
An instrument in writing which, when recorded, creates a lien upon property pledged as security for the repayment of a debt or obligation.
Mortgage Broker
A person or firm which acts as an intermediary between borrower and lender.
Mortgage Insurance
Mortgage Insurance
This is an insurance policy provided by a government agencies such as FHA or through private insurance companies (PMI). When the downpayment (or remaining equity in a property) is less than 20% of the value, the lender feels "exposed". The borrower is required to get mortgage insurance that protects the lender against default on the mortgage. The Lenders who require MI or PMI are the conventional lenders, or the government lenders. The sub-prime lenders typically do not require mortgage insurance on their loans. Mortgage Insurance can be paid up front in a lump sum, or more typically is added to the monthly mortgage payment. The annual premium amount is calculated as a percentage of the total loan amount. The premium percentage goes up as the loan to value increases.

N
Note
A written instrument acknowledging a debt and promising payment.

P

Probate
An action of the court to determine the validity and legality of a last will and testament.

R

Rate and Term Refinance
Refinancing the existing first mortgage only. The intention is to lower the annual interest rate and/or the monthly payment. This is not an option if there is a second mortgage lien on the property. The payoff the second lien would be considered a cash out option.
Recording
The act of writing or entering an instrument into a book of public records, which constitutes notice to all persons of the rights or claims contained in the instrument; often called constructive notice or legal notice.
Rescission
The annulling, revocation, or repealing of a contract by mutual consent of the parties, or for cause by either party to the contract, and returning the parties to their original position (the "status quo").

S
Stated Income
Some people, for whatever reason, are just unable to document the income that they are making. A stated loan (also known as a NIV or No Income Verification) means that the applicant simply states on their application what their monthly income is, and no effort is made on the Lender's part to verify that income. This is the riskiest of the three options, and therefore commands a higher interest rate. Lenders do look at the stated income and make a judgement as to whether the stated amount of income is reasonable for the profession. For example, it is highly unlikely that, although preferable, that the kindergarten teacher is making $200,000 from teaching our kids the ABC's!
Survey
The process by which a parcel of land is measured and its area ascertained.

T
Tenancy in Common
Ownership by two or more persons who hold undivided interest, without right of survivorship. Upon the death of one tenant, his interest goes to his heirs. Interests need not be equal, and each owner is possessed of the whole of an undivided part.
Title Insurance
A policy of insurance which idemnifies the holder for loss sustained by reason of a defect in the title, provided the loss does not result from a defect excluded by the policy provisions.

W
Warranty Deed
A deed in which the grantor fully warrents a good clear title to the property; a deed that contains convenants of title.