Glossary

• Abstract of title:
An abstract of title is the condensed history of title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.
• Acknowledgment:
In legal terminology, acknowledgment is a declaration or avowal of one's own act, to give it legal validity; as, the acknowledgment of a deed before a proper officer. The term also refers to the certificate of the officer attesting such declaration.
• Acre:
The international acre is 4 046.856 422 4 m².
The US survey acre is 4 046.872 61 m².
• Ad valorem tax:
An Ad valorem tax is a tax based on the assessed value of real estate or personal property.
• Adjustable rate mortgage (ARM):
An adjustable rate mortgage or variable rate mortgage is a loan secured on a property (house) whose interest rate and so monthly repayment vary over time.
• Administrator:
The administrator is the person responsible for distributing the decedent's property to heirs.
• Adverse possession:
In real estate law, adverse possession is a means of acquiring title to another's real property without compensation.
• Allodial title:
Allodial title is a concept in some systems of property law. It describes a situation where real property (i.e., land, buildings and fixtures) is owned free and clear of any encumbrances, including liens, mortgages and tax obligations.
• Amortization calculator:
An amortization calculator is used to determine the periodic payment amount due on a loan (typically a mortgage), based on the amortization process.
• Amortization schedule:
An amortization schedule is a table detailing each periodic payment on a loan (typically a mortgage), as generated by an amortization calculator.
• Amortization:
Amortization is distribution of a single lump-sum cash flow into many smaller cash flow installments for easier repayment.
• Antitrust laws:
Antitrust or competition laws, legislate against trade practices that undermine competitiveness or are considered to be unfair.
• Apartment:
An apartment (or flat) is a self-contained housing unit that occupies only part of a building. Apartments may be owned (by an owner-occupier) or rented (by tenants).
• Appreciation:
Appreciation is a term used in accounting relating to the increase in value of an asset.
• Arrears:
Arrears, or arrearages is a legal term for the type of debt accrued after missing an expected payment.
• Assignment:
An assignment encompasses the transfer of rights held by one party - the assignor - to another party - the assignee.
• Balloon payment mortgage:
A balloon payment mortgage is a mortgage that has a final payment that is much larger than a regular payment.
• Blanket loan:
A blanket loan, or blanket mortgage, is a mortgage client securing several parcels of property.
• Bridge loan:
A bridge loan is a type of short-term loan in the financial industry. Bridge loans are typically taken out for a period of 2 weeks to 3 years in order to finance other projects.
• Bundle of Rights:
The bundle of rights theory is a common way of explaining how rights in property are held.
• Capital gain:
A capital gain is profit that is realized from the sale of an asset that was previously purchased at a lower price.
• Capitalization rate:
The Capitalization Rate or Cap Rate is a ratio used to estimate the value of income producing properties. The cap rate is the net operating income divided by the sales price or value of a property expressed as a percentage.
• Chain of title:
A chain of title is the sequence of historical transfers of title to a property.
• Closed end home equity loan:
In this loan you receive a lump sum loan amount for the equity in your home.
• Closing cost:
Real property in most jurisdictions is conveyed from the seller to the buyer through a real estate contract. The point in time at which the contract is actually executed and the title to the property is conveyed to the buyer is known as the "closing".
• Closing:
Closing is the final step in executing a real estate transaction.
• Cloud on title:
When a document has been recorded in public record in the county that the real property is located that enables the sale of such property until resolved.
• Community property:
Community property is a marital property regime. In a community property jurisdiction, all property acquired during the marriage (except for gifts or inheritances) is owned jointly by both spouses and is divided upon divorce, annulment or death.
• Comparables:
Properties that are similar to the subject property. In real estate, a real estate agent checks the selling prices of comparables to help determine the value of a property he is appraising.
• Condominium:
A condominium is a form of housing tenure. It is the legal term used for a type of joint ownership of real property in which portions of the property are commonly owned and other portions are individually owned.
• Conveyancing:
Conveyancing is the act of transferring the ownership of a property from one person to another.
• Cooperative:
A cooperative (also co-operative or co-op) is an association of persons who join together to carry on an economic activity of mutual benefit, in an egalitarian fashion.
• Debt consolidation:
Debt consolidation entails taking out one loan to pay off many others.
• Deed:
A deed is a legal instrument used to grant a right.
• Depreciation:
Depreciation is an estimate of the decrease in the value of an asset, caused by "wear and tear", obsolescence, or impairment.
• Double closing:
A Double closing is the simultaneous purchase and sale of a real estate property involving three parties: the original seller, an investor (middleman), and the final buyer.
• Due-on-sale clause:
A Due-on-sale clause is a clause in a loan or promissory note that stipulates the full balance is due upon sale or transfer of ownership.
• Earnest payment:
An earnest payment (sometimes called earnest money or simply earnest) is when a buyer gives of something of value (money or otherwise) to a seller at the time an agreement is made and it is accepted by the seller as an indication that the agreement is complete. For the gift to be earnest it must be given outright by the buyer to the seller with no intention of ever getting it back.
• Easement:
An easement is the right of use over the real property of another.
• Eminent domain:
Eminent domain is the power of the state to appropriate private property for its own use without the owner's consent.
• Encumbrance:
An encumbrance is a legal term of art for anything that affects or limits the title of a property, such as mortgages, leases, easements, liens, or restrictions.
• Equity loan:
An equity loan is a mortgage placed on real estate in exchange for cash to the borrower.
• Escrow:
Escrow is a legal arrangement whereby a property is delivered to a third party (called an escrow agent) to be held in trust pending a contingency or the fulfillment of a condition or conditions in a contract.
• FHA loan:
FHA loan is a mortgage loan insured by the Federal Housing Administration.
• Floor loan:
Floor Loan is the minimum amount of money a lender is willing to provide on a commercial loan for a building that is to be tenant occupied.
• Hard money loan:
A Hard Money Loan is a specific type of financing in which a borrower receives funds based on the value of a commercial real estate property.
• Home equity loan (HEL):
A home equity loan is a type of mortgage.
• Home insurance:
Home insurance, or homeowners insurance, is an insurance policy that combines insurance on the home, its contents, loss of use (additional living expenses) and, often, the other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.
• Interest-only loan:
An interest-only loan is a loan in which for a set term the borrower pays only the interest on the capital; the capital remains owing.
• Jumbo mortgages:
A Jumbo Mortgage is a residential property mortgage which is at high risk of default when drawn down.
• Loan to value (LTV):
Loan to Value is an expression of the loan amount as a percentage of the total appraised value of a piece of real estate.
• Loan:
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. The borrower initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt.
• Manufactured housing (MH):
Manufactured housing is a type of housing unit that is largely assembled in factories and then transported to sites of use.
• Mezzanine loan:
A mezzanine loan is a relatively large, unsecured loan (a loan that is not backed by a pledging of assets) with a maturity of at least five years.
• Negative amortization:
A negative amortization is an amortization method where the borrower pays back less than the full amount of interest owed to the lender each month.
• Non-conforming loan:
A non-conforming loan is a loan that fails to meet bank criteria for funding.
• Non-performing loan:
A non-performing loan is a loan that is in default or close to being in default.
• Open end home equity loan:
This is a revolving credit loan where the borrower can choose when and how often to borrow against the equity in the property.
• Ownership equity:
In finance and accounting, ownership equity, commonly known simply as equity, but also as risk capital or liable capital, is the difference in value between the assets and the claims on them (liabilities), which accrues to the owner(s).
• Package loan:
A package loan is a real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings and major appliances.
• Participation mortgage:
A participation mortgage is a mortgage wherein the lender, or mortgagee, is entitled to share in the rental or resale proceeds from a property owned by the borrower, or mortgagor.
• Payday loan:
A payday loan or cash advance is a small, short-term loan (typically up to $500) without a credit check that is intended to bridge the borrower's cashflow gap between pay days.
• Pooling:
Pooling is the process of grouping together loans. Loans and debt with similar characteristics can with success be pooled into a new security.
• Pre-approval:
People interested in buying a house can often approach a lender, who will check their credit and verify their income, and then can guarantee they would be able to get a loan up to a certain amount. The people can then take a letter of pre approval from the lender, and when shopping for a home can have possibly an advantage over others because they can show the seller that they are guaranteed to be able to buy the house.
• Pre-qualification:
Pre-qualification is a term of art in retail finance, and means that a loan officer has taken some information from the borrower, and made a tentative decision, but not verified any of it.
• Quitclaim deed:
A quitclaim deed is a term used in property law to describe a document by which a person disclaims any interest the grantor might have in a piece of real property, and passes that claim to another person.
• Real estate appraisal:
A real estate appraisal is a service performed, by an appraiser, that develops an opinion of value based upon the highest and best use of real property.
• Real estate broker:
A real estate broker is in the business of brokering real estate transactions; this is, finding sellers for those who want to buy real estate and finding buyers for those trying to sell real estate.
• Real estate broker:
A real estate broker is in the business of brokering real estate transactions; this is, finding sellers for those who want to buy real estate and finding buyers for those trying to sell real estate.
• Real estate contract:
A real estate contract is a contract for the purchase/sale, exchange, or other conveyance of real estate between parties.
• Real estate:
Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings.
• Refinancing:
Refinancing refers to applying for a secured loan intended to replace an existing loan secured by the same assets.
• Reverse mortgage:
A reverse mortgage is a type of loan used by older consumers as a way of converting their home equity (the value of their home, minus the amount of mortgage(s)) into a cash payment (or series of payments) while retaining ownership of their property.
• Second mortgage:
A second mortgage is a secured loan (or mortgage) that is subordinate to another loan against the same property.
• Securitization:
Securitization is a financial technique that pools assets together and, in effect, turns them into a tradeable security.
• Signature loan:
A signature loan is a loan that is not backed by collateral.
• Student loan:
Student loans are loans offered to students to assist in payment of the costs of professional education.
• Syndicated loan:
A syndicated loan (or "syndicated bank facility") is a large loan in which a group of banks work together to provide funds for a borrower.
• Unsecured loan:
A signature loan is a loan that is not backed by collateral.
• VA loan:
A VA loan is a mortgage loan guaranteed by the Veterans Administration.
• Wraparound mortgage:
A wraparound is a way of lowering the barriers of entry to a junior lien or subordinate mortgage; it also expedites process of purchasing a home.