Acceptance
a
verbal
or
written
acceptance
of
an
offer
to
buy
a
home,
made
from
the
seller
to
the
buyer.
Acre
a
land
measurement
commonly
used
in
U.S.
property
negotiations.
One
acre
equals
43,560
square
feet.
Adjustable rate mortgage, ARM
a
type
of
mortgage
loan
characterized
by
interest
rates
that
automatically
adjust
or
fluctuate
in
concert
with
certain
market
indexes.
Generally
an ARM begins
with
an
introductory
or
initial
interest
rate,
which
then
may
rise
or
fall,
but
monthly
payments
may
not
exceed
the
ARM
loan
cap.
Amortization
the
process
of a
loan's
value
over
a
period
of
time.
Often
amortization
is
laid
out
on
an amortization
schedule or
measured
by
an
amortization
calculator.
Annual
percentage
rate,
APR
the
truest
cost
of a
home
loan.
Per
the
Truth
in
Lending
Act,
all
mortgage
lenders
must disclose
their
APR.
In
the
mortgage
industry,
APR
may
include
fees
such
as
documentation
fees,
private
mortgage
insurance
and
more.
Appreciation
the
measurable
value
that
increases
on a
home
or
property.
Market
improvements
and
home
renovations
often
drive
appreciation
value.
Assessed
value
a
value
determined
by
local
government
assessors
and
used
to
calculate
annual
property
or
real
estate
taxes.
Assumable
mortgage
a
type
of
mortgage
that
may
be
transferred,
interest
rate
and
all,
from
seller
to
buyer.
Attorney
fees
fees
possibly
due
during
closing.
Balloon
mortgage
a
short-term
high-risk
loan
that
leaves
the
borrower
with
a
potentially
high
loan
balance
at
the
end
of
the
loan
term.
Some
of
these
loans
automatically
renew
at
prevailing
rates,
whereas
others
may
require the
balloon
payment be
paid
in
full.
Borrower
the
individual
or
individuals
extended
a
loan
and
mortgage
for
the
purchase
of a
house
and/or
property.
Borrower
is
responsible
for
making
all
payments
and
fees
associated
with
the
loan
over
the
life
of
the
loan.
Legal
mortgagor.
Bridge
loan
a
short-term
loan
used
to
quickly
effect
a
sale
while
pending
more
conventional
real
estate
financing.
While
not
popular,
a
bridge
loan
can
be
useful
particularly
for
certain
commercial
real
estate
deals.
Buy
down
a
situation
in
which
a
seller
or
lender
kicks
in a
sum
of
money
in
order
to
lower
the
initial
interest
rate
on a
home
loan
to
make
a
sale
more
appealing
for
the
buyer.
Buyer's
agent
real
estate
agent
that
works
on
behalf
of
the
homebuyer.
Cap
maximum
monthly
payment
a
borrower
may
be
expected
to
pay
on a
loan.
Capital
gain
profit
earned
on
an
asset,
such
as a
home
or
property.
Capital
gain
tax
a
tax
levied
against
the
profit
made
on
the
sale
of a
home
and/or
property.
Cash
out
refinance
a second
mortgage in
which
the
borrower
extracts
home
equity
at
the
same
time
a
refinance
deal
is
made;
an
alternative
to a
home
equity
loan.
Closing
the
formal
documented
sale
of a
home
and/or
property
that
includes
signing
all
documents
associated
with
the
exchange
and
payment
of
required
closing
fees.
A
closing
agent
usually
oversees
this
process.
Closing
agent
the
person
responsible
for
mediating
the
closing,
documenting
the
process
and
assuring
all
associated
paperwork
is
completed.
May
be
an
attorney
or
official
from
a
title
or
mortgage
company.
Closing
costs
real
estate
transaction
related
fees
payable
by
the
buyer
and
seller
during
a
closing.
A
wide
variety
of
fees
may
be
included,
such
as
title
search,
attorney's
fees,
origination
fees,
documentation
fees
and
more.
Closing
statement
an
itemized
list
of
closing
costs.
Co-borrower
a
borrower
with
good
credit
that
agrees
to
take
on
shared
responsibility
for
a
home
loan
so
that
the
primary
borrower
may
purchase
property.
Combination
loan
a
type
of
loan
that
combines
an
initial
loan
typically
for
new
home
construction,
with
a
second
conventional
home
loan
that
supplants
the
first.
Commitment
letter
a
document
from
a
lender
to a
borrower
that
officially
lays
out
the
terms
of a
loan.
Comparable
sales,
comps
similar
home
sale
prices
in
the
region
used
as a
metric
in
the
calculation
of a
home's
appraised
value.
Conforming
loan
a
conventional
loan
characterized
by
loan
limits
that
fall
within
those
guidelines
laid
out
by
the
Government
Sponsored
Enterprises
(GSEs)
such
as
Freddie
Mac
and
Fannie
Mae.
Construction
loan
a
short-term
loan
for new
home
construction that
is
supplanted
with
a
conventional
long-term
home
loan.
See
combination
loan.
Contingency
any
one
of a
number
of
common
clauses
added
to
real
estate
agreements
that
provide
buyer
or
seller
rights
during
various
stages
of a
transaction.
Conventional
mortgage
a
mortgage
offered
by
any
one
of
the
Government
sponsored
entities,
different
from
an FHA or VA
loan.
These
are
typically
30-year
fixed-rate
loans.
Credit
money
extended
from
a
lender
to a
borrower
based
on
that
borrower�s
credit
history.
Date
of
closing
date
upon
which
all
paperwork
associated
with
a
mortgage/property
sales
exchange
is
finalized.
Date
of
possession
actual
date
upon
which
the
buyer
will
move
into
a
home
or
property;
it
is
usually
the
closing
date,
but
may
be
another
agreed
upon
date
as
well.
Debt
amount
of
money
a
borrower
owes
to
creditors.
A
metric
used
to
calculate
creditworthiness.
Deed
an
official
and
public
document
that
establishes
property
ownership.
Deed
of
reconveyance
when
a
borrower
has
paid
in
full
on a
mortgage,
the
lender
then
awards
the
borrower
a
deed
of
reconveyance.
This
document
becomes
also
a
part
of
public
record.
Also
known
as
reconveyance
deed
and
recon.
Deed
of
trust
a
document
that
in
some
states
is
used
in
place
of a
mortgage.
A
deed
of
trust
may
be
held
by a
third
party,
similar
to a
mortgage.
Default
inability
of
borrower
to
make
regular
and
consecutive
payments
on a
loan.
Depreciation
the
measure
of
loss
in
value
of a
home
or
property.
Depreciation
could
be
driven
by
poor
economic
factors
or
property
damage.
Discount
points
a
measure
of
interest;
1
point
= 1%
of
the
home
loan
value.
Homebuyers may
pay
points
up
front,
a
type
of
buy-down,
in
order
to
lower
their
overall
interest
rate
and
mortgage
payment.
Earnest
money
a
sum
of
money
usually
put
up
by
the
buyer
when
an
offer
on a
home
or
property
is
made.
The
purpose
of
earnest
money
is
as a
token
of
good
faith,
a
symbol
that
the
buyer
is
seriously
pursuing
purchase.
Equity
the
measurable
value
of a
home
or
property
above
and
beyond
that
owed
on a
loan.
A
value
upon
which
many
homeowners
often
borrow.
Escrow
account
a
separate
account
held
by a
mortgage
lender
out
of
which
required
property
bills,
separate
from
the
loan
payment,
are
made.
Property
taxes
and
insurance
are
examples
of
costs
paid
out
of
escrow.
Sometimes
called
an
�impound
account.�
Fair-market-value
the
price
that
a
piece
of
property
will
bear
in
the
current
market.
Fannie
Mae
a
private
mortgage
corporation
that
began
as a
government
subsidized
entity
in
the
late
30s.
Today
Fannie
Mae,
along
with
Freddie
Mac,
is a
government
sponsored
enterprise
(GSE)
and
together
they
are
responsible
for
setting
annual
conforming
loan
limits
and
assuring
that
most
Americans
are
able
to
finance
a
home.
Fannie
Mae
is
commonly
known
as a
secondary
mortgage
market
and
lends
to
mortgage
lenders
which
in
turn
extend
mortgages
to
borrowers.
FHA
Federal
Housing
Administration.
FHA
loan
loans
extended
by
FHA-approved
lenders
typically
are
designed
to
assist
borrowers
unable
for
various
reasons
to
get
the
approval
necessary
for
conventional
home
loans.
First
time
buyer
a
home
loan
borrower
who
has
never
taken
out
a
mortgage
before;
often
qualifies
for
various
discounts
and
first-time
buyer
perks.
Fixed
rate
mortgage
a
conventional
mortgage
that
is outfitted
with
a
fixed
interest
rate
over
the
life
of
the
loan.
Monthly
payments
are
the
same
from
month
to
month.
Flood
certification
in
most
real
estate
cases
a
lender
will
require
a
flood
certification
before
making
a
loan
on a
home.
In
areas
where
a
property
falls
in a
flood
zone,
the
borrower
may
be
required
to
purchase
standalone
flood
insurance
before
a
mortgage
and/or
home
loan
is
approved.
Foreclosure
the
repossession
of a
home
and/or
property
by a
lender
in
the
event
of
borrower
loan
default
or
the
inability
to
meet
mortgage
agreements.
Freddie
Mac
in
concert
with
Fannie
Mae,
Freddie
Mac
is a
leading
government
sponsored
enterprise
(GSE)
and
is
responsible
for
maintaining
reasonable
mortgage
market
stability,
this
assuring
that
Americans
are
able
to
purchase
homes.
Freddie
Mac
is a
secondary
mortgage
market,
meaning
the
corporation
lends
to
lenders,
which
in
turn
extend
mortgage
products
directly
to
borrowers.
Good
Faith
Estimate
an
itemized
list
of
anticipated
loan
costs
and
closing
fees
passed
from
a
lender
to a
potential
borrower
within
three
days
of
an
application
for
a
home
loan.
This
is a
required
step
in
the
loan
application
process
per
the
Real
Estate
Settlement
Procedures
Act.
Hazard
insurance
also
known
as
homeowner�s
insurance;
extra
insurance
taken
out
on a
home
that
protects
the
borrower
and
lender
in
the
event
of
damage.
Usually
covers
the
value
of
the
home.
High-risk
loan
a
home
loan
extended
to
borrowers
with
poor
credit
history
or
that
fall
outside
the
conventional
or
conforming
loan
limits
set
by
Fannie
Mae
and
Freddie
Mac.
Sub-prime
loan
is
an
example
of a
high-risk
loan.
Home
inspection
a
comprehensive
and
exhaustive
examination
of a
home
by a
licensed
inspector.
Often
required
as
part
of a
mortgage
and
home
loan
process.
Home
inspection
contingency
clause
a
clause
added
to
an
offer
letter
that
gives
the
buyer
certain
rights
pending
home
inspection.
A
buyer
may
ask
the
seller
to
repair
defects
discovered
during
the
home
inspection
or
even
request
release
from
the
offer
to
buy
in
light
of a
home
inspection.
Home
loan
not
a
mortgage,
but
the
actual
amount
of
money
a
buyer
owes
the
lender
in
the
purchase
of a
home.
Home
price
index
financial
and
market
tool
that
provides
historical
data
on
residential
home
prices
in
various
regions.
Homeowner's
association
an
association
attached
to a
neighborhood,
apartment,
condo
or
town
home
complex
that
establishes
certain
rules
of
ownership.
Common,
but
not
exhaustive,
responsibilities
of a
homeowner�s
association includes
collection
of
neighborhood
dues
for
landscape
maintenance
or
membership
in
recreation
and
entertainment
facilities.
Homeowner's
insurance
insurance
that
protects
the
value
of
the
home
for
both
lender
and
borrower.
Homeowner�s
insurance
typically
covers
the
cost
of
replacing
the
home
and
various
parts
of
the
same.
Most
mortgage
lenders
require
borrowers
to
carry
a
term
of
insurance.
House
flipping
the
purchase
of a
house
or
property
at a
reduced
market
rate
for
the
purpose
of a
quick
turnaround,
a
�flip,�
and
profit.
Most
house
flippers
must
do
some
renovation
or
home
fix-up
in
order
to
turn
a
profit
on a
home.
Housing
co-op
a
real
estate
corporation
in
which
buyers
own
a
share
of
real
estate
holdings
and
may
reside
in a
co-op
unit.
Shareholders
do
not
have
mortgages,
but
pay
on a
cut
of
the
shares
and
earn
equity
over
the
long
term.
HUD
loan
a
type
of
loan
available
to
HUD
homebuyers
that
goes
toward
fixing
up a
home.
The
loan
is
subsequently
absorbed
into
the
mortgage.
The
term
�HUD
loan�
is
often
confused
with
�FHA
loan.�
Impound
accountSee, Escrow
account.
Initial
interest
rate,
introductory
the
interest
rate
at
which
an
Adjustable
Rate
Mortgage,
ARM,
will
begin.
See Adjustable
rate
mortgage.
Interest
rate
a
figure
calculated
as a
percentage
that
is
used
in
the
financial
industry
to
indicate
the
rate
charged
for
use
of
money
in a
loan.
Interest
rates
may
be
fixed
or
variable.
See, Annual
percentage
rate.
Investment
property
real
estate
bought
for
investment
purposes
as
opposed
to
private
residential.
Often
the
property
will
be
used
for
rental
purposes,
such
as
rental
home,
apartments
or
other
spaces
that
give
owners
the
opportunity
to
create
profit
and
income
over
the
long
term.
Joint
ownership
a
type
of
property
ownership
in
which
two
people
share
equally
in a
home
and/or
property;
common
for
spouses.
Joint
tenancy
a
type
of
property
ownership
in
which
two or
more people
share.
Jumbo
mortgage
a
type
of
high-risk
loan,
or
non-conforming
loan,
in
which the
"jumbo"
loan
amount is
higher
than
that
of a
conventional
loan
limit.
Lender
fees
typically
included
in
fees
associated
with
closing
costs,
sometimes
called
processing
fees;
designed
to
cover
costs
incurred
by
lenders
during
the
loan
process.
Lender,
mortgage
lender
the
bank
or
finance
company
that
directly
awards
home
loan
or
mortgage
money
to a
borrower
or
homebuyer.
Legal-mortgagee.
Lien
a
formal,
legal
symbol
of
money
owed
on a
major
asset
such
as
property.
Also,
mortgage.
Loan
money
lent
from
a
financial
institution
to a
creditworthy
borrower(s)
over
a
specified
period
of
time
and
at a
particular
interest
rate.
Maturity
typically
applied
to
the
term
of a
home
loan
or
mortgage;
the
life
span
of a
mortgage;
for
example,
a
15-year
loan
matures
in
15
years,
the
period
of
time
in
which
the
debt
must
be
paid
off.
Mortgage
a
legal
document
between
a
mortgagor
and
a
mortgagee
that
establishes
a
home
and/or
property
as
security
for
a
home
loan.
Mortgage
broker
the
entity
that
acts
as a
go-between
between
a
homebuyer
and
mortgage
lender,
handling
paperwork
and
finally
effecting
a
mortgage.
A
broker
does
not
make
direct
loans
to
buyers,
but
works
to
find
the
best
deal
and
finally
collects
fees
as
part
of
the
mortgage
process.
Mortgage
calculators
online
financial
tools
available
on
many
sites
that
allow
potential
buyers
to
plug
in
various
personal
financial
figures
to
arrive
at a
mortgage
value
they
can
afford.
Mortgage
company
could
be
either
a
brokerage
business
or a
direct
lender.
Mortgage
insurance
when
buyers
take
out
a
mortgage
with
less
than
a
certain
dollar
percentage
to
put
down
on
the
loan,
lenders
require
them
to
pay
mortgage
insurance,
a
monthly
premium
that
is
added
to
the
mortgage.
This
protects
the
lender
should
a
buyer
default
on
the
home
loan.
Mortgage
Insurance
Premium,
MIP
a
required
1.5%
fee
added
into
a
FHA
loan,
paid
at
closing.
Mortgage
originator
the
actual
company
that
lends
the
mortgage,
the
�originator.�
No-fee
mortgage
a
sales
tactic
to
attract
buyers
who
may
be
unable
to
pay
out
of
pocket
closing
fees.
Typically
a
no-fee
or
no-cost
mortgage
is
bundled
with
a
slightly
higher
interest
rate
that
more
than
makes
up
the
difference
in
so-called
�no
fees�
over
the
life
of
the
loan.
Notice
of
Incomplete
Application,
NOIA
a
form
sent
to
the
buyer
that
indicates
missing
or
incomplete
loan
application
information.
Buyer
must
provide
all
required
information
for
the
lender
to
complete
the
application
process.
Offer
a
verbal
and
written
offer
to
buy
a
home
for
a
certain
dollar
amount
made
from
a
buyer
to a
seller.
Origination
fee
a
fee,
calculated
as a
small
percentage
of
the
value
of
the
loan,
charged
by a
mortgage
lender
for
processing
the
loan.
One
of
many
fees
often
due
at
closing
and
one
that
must
be
disclosed
on
the
Good
Faith
Estimate
when
a
buyer
first
completes
a
loan
application.
Payment
cap
for
an
adjustable
rate
mortgage,
this
is
the
maximum
payment
amount
a
buyer
could
ever
be
expected
to
pay
per
month.
Piggyback
loan
a
second
mortgage
"piggybacked"
onto
a
first
mortgage
and
used
in
lieu
of
mortgage
insurance.
Cost
effectiveness
of a
piggyback
loan
depends
on
current
market
factors.
Portable
mortgage
a
type
of
mortgage
that
may
be
carried
by
the
borrower
from
one
home
purchase
to
the
next,
portable.
Power
of
attorney
a
legal
document
that
grants
an
individual
the
rights
to
act
on
behalf
of
another.
For
example,
if a
borrower
dies
or
becomes
incapable
of
managing
his
or
her
home
loan
or
mortgage,
a
power
of
attorney
assigned
by
that
individual
could
manage
his
or
her
mortgage
and
related
decisions.
Preferred
lender
a
lender
that
is
closely
affiliated
with
a
brokerage
based
on
reputation
and
other
industry
factors.
A
mortgage
lender
that
is
recommended
by a
broker.
Pre-paid
costs
or
fees
any
of a
number
of
fees
associated
with
a
mortgage
and
usually
paid
out
of
pocket
at
the
time
of
closing;
includes
origination
fees,
underwriting
fees,
attorney
fees,
etc.
Pre-qualification
the
process
in
which
a
homebuyer
may
find
out
how
much
of a
home
loan
he
or
she
would
be
approved
for
with
a
lender;
gives
many
buyers
more
flexibility
when
shopping
for
a
home.
Primary
mortgage
market
direct
lenders.
Prime
loan
a
conforming
loan,
one
whose
loan
limits
fall
within
those
set
by
Fannie
Mae
or
Freddie
Mac
and
often
awarded
to
borrowers
with
good
credit.
Principal
the
amount
borrowed
on a
home
loan.
Principal
balance
the
amount
currently
owed
on a
home
loan.
Private
label
mortgage
outsourcing
a
process
in
which
a
private
bank
or
financial
lender
outsources
mortgage
products
to
another
lender.
Private
mortgage
insurance,
PMI
a type
of
insurance many
homebuyers
are
required
to
purchase,
particularly
when
they
are
unable
to
put
down
a
certain
dollar
amount
on
the
loan;
protects
the
lender
in
the
event
of
borrower
default.
Processing
fees
lender
fees
associated
with
creating
the
loan
or
mortgage,
usually
part
of
closing
costs.
Property
address
the
physical
street
address
of a
home
or
property,
required
for
mortgage
application.
Property
appraisal
a
fair
market
value
of
property
performed
by a
licensed
appraiser;
takes
into
account
not
only
condition,
but
also
the
value
of
similar
local
properties
or
comparable
sales.
Property
taxes
annual
local
taxes
charged
against
the
value
of a
homeowner's
property.
Property
valuation
see Property
appraisal.
Quit
claim
deed
a
document
that
releases
one
party
in a
home
title
from
any
responsibility
and
grants
all
responsibility
to
another.
Commonly
used
for
spouses
or
in
family
situations
in
which
more
than
one
individual
has
an
interest
in a
mortgage
or
property
title.
Rate
commitment
option,
RCO
see Rate
lock.
Rate
lock
a
short-term
agreement
by a
lender
to
�hold�
a
certain
interest
rate
on a
home
loan
while
the
buyer
negotiates
a
sale
transaction.
Also,
Rate
commitment
option.
Real
estate
investment
trust
securities
or
mutual
funds
that
invest
directly
in
real
estate.
Real
Estate
Settlement
Procedures
Act
(RESPA)
this
act
passed
in
1974
reeled
in
hidden
costs,
fees
and
kickbacks
that
had
become
widespread
among
real
estate
entities.
Per
this
act
all
fees
and
costs
must
be
disclosed
to
both
buyers
and
sellers.
Real
estate
tax
see Property
tax.
Refinance
process
by
which
a
borrower/homeowner
may
negotiate
a
lower
interest
rate
on a
mortgage,
thereby
lowering
monthly
payments.
They
may
choose
to
work
with
their
current
lender,
or refinance with
another
lender.
Remaining
balance
The current
balance
owed on
a
home
loan.
Remaining
term
The
current
amount
of
time
remaining
in
the
length
of
the
loan.
Repayment
schedule
mortgage
payments
laid
out
over
the
life
of
the
loan.
Some
mortgage
calculators
let
borrowers
see
their
repayment
schedule
based
on
the
amount
of
the
home
loan,
the
interest
rate
and
monthly
payments.
See
also
Amortization.
Reverse
mortgage
a
type
of
mortgage
designed
for
homeowners
over
62
years
of
age;
gives
them
access
to
home�s
equity
in
cash
payments,
frees
up
money
they
may
use
for
other
important
costs
or
to
make
needed
home
repairs.
Since reverse
mortgages are
typically
structured
as
loans,
these
payments
are
not
typically
considered
income.
Sales
contract
a
real
estate
sales
agreement
is a
formal
written
contract
made
between
a
homebuyer
and
seller.
The
document
includes
property
address,
condition,
purchase
price,
inspections,
date
of
closing,
date
of
possession
and
more.
Second
mortgage
also
known
as a
home
equity
loan,
a second
mortgage gives
borrowers
flexibility
to
access
the
cash
equity
in
their
home,
usually
useful
for
other
high-dollar
expenses
such
as
auto
and
college
loans.
Secondary
mortgage
market
the
segment
of
the
mortgage
and
real
estate
securities
market
that
deals
in
the
investment
of
mortgages;
not
direct
mortgage
lenders.
Seller�s
agent
a
real
estate
agent
that
works
on
behalf
of
the
home
seller.
Short
sale
useful
tool
for
lenders
and
homeowners
when
foreclosure
could
be a
worst-case
scenario.
In a
real
estate
short-sale
lenders
give
homeowners
permission
to
discount
the
home
value
(an
outstanding
loan
balance)
to
effect
a
quick
sale,
thereby
averting
foreclosure.
Speculative
home
market
one
in
which
investors
snatch
up
homes
for
quick
re-sale
hoping
to
cash
in
on
improving
markets;
considered
risky
by
some.
Sub-prime
loan
a
high-risk
loan
packaged
with
non-conforming
loan
limits
and
interest
rates
that
make
it
possible
for
homebuyers
with
poor
credit
to
qualify
for
a
mortgage.
Survey
a
formal
survey
of
property
that
establishes
boundary
lines
and
defines
any
types
of
limits
on
construction
and
other
features
that
could
affect
the
value
of
property;
in
many
cases
lenders
require
buyers
to
purchase
a
property
survey.
Swing
loan
see Bridge
loan.
Tenancy
in
common
one
or
more
persons
may
possess
the
property
title,
but
ownership
may
be
declared
in
various
percentages.
Third-party
fees
see Closing
costs.
Title
the
official
document
used
in
the
real
estate
industry
that
specifies
at
any
one
time
who
owns
a
piece
of
property.
Title
company
a
title
company
typically
handles
all
tasks
associated
with
the
property
title,
including
insurance
and
search.
Title
insurance
insurance
taken
out
on
the
property
title
that
protects
both
borrower
and
lender
in
the
event
of a
title
dispute.
Title
search
research
on a
property
title
usually
conducted
by a
title
company
to
determine
if
there
exist
any
outstanding
liens
against
the
property
prior
to a
sales
transaction.
Truth
in
Lending
disclosure
a
document
that
all
lenders
are
required
to
provide
when
a
borrower
applies
for
a
home
loan.
The
document
discloses
interest
rates,
the
amount
to
be
loaned,
plus
the
final
cost
of
the
loan
upon
maturity.
Turnaround
loan
see Bridge
loan.
Underwriter
the
company
or
service
that
evaluates
a
borrower�s
creditworthiness
prior
to
loan
and
mortgage
approval.
VA
loans
special,
often
discounted,
home
loans
designed exclusively
for
military
veterans.
|