Abstract of title A condensed history or summary of all transactions affecting a particular parcel of real estate, including the original grant, all conveyances and encumbrances affecting the property, and the abstractor's certification of the history's accuracy
Acceleration clause A clause in a mortgage that gives the lender the right to require payment of the entire principal balance if the borrower defaults on an installment payment or other covenant
Acceptance An offeree's consent to enter into, and be bound by the terms of, a contract
Access The right to enter and exit a parcel of land from a public way, including the right to enter and exit via land belonging to others
Acknowledgment The confirmation by which a party executing a legal document confirms his signature and voluntary agreement with the terms of the document, made before an authorized officer of the Court or notary public
Acre 43,560 square feet of land
Adjustable Rate Mortgage (ARM) A mortgage with an interest rate that changes over time in line with movements in the index. ARMs are also referred to as AMLs (adjustable mortgage loans) or VRMs (variable rate mortgages).
Adjusted basis The total of the original cost of a property and the value of any capital expenditures for improvements done to it, minus any depreciation taken
Adjustment date The date on which the interest rate changes for an adjustable-rate mortgage (ARM)
Adjustment Period The length of time between interest rate changes on an ARM. For example, a loan with an adjustment period of one year is called a one-year ARM, which means that the interest rate can change once a year.
Administrator A person appointed by a probate court to administer the estate of an individual who has died without a will
Adverse Possession A claim made against the land titled to another person, by virtue of open and hostile possession and use of the land to the exclusion of the titled owner
Affidavit of title A sworn statement that is made in writing under oath by a seller of real property, and certified by a notary public, in which the seller identifies himself or herself, indicates marital status, certifies that no defects have occurred in the title since the examination of the title on the date of the contract, and confirms that he or she is in possession of the property (if applicable)
Agency The relationship between two or more persons wherein the agent is authorized to act on behalf of another person (or principal) in certain transactions
Agent A person or company that acts on behalf of another to transact business, generally in exchange for payment. In real estate, it is a person or company with a real estate license working under the authority of a real estate broker
Alienation The act of transferring property to another, either voluntarily (via a sale), or involuntarily (via adverse possession)
Alienation clause The clause in a mortgage or deed of trust which asserts the lender's option to require that the balance of the secured debt becomes immediately due and payable if the property is sold by the borrower, preventing the borrower from assigning the debt without the lender's approval
ALTA American Land Title Association, the national association of title insurance companies, abstractors and attorneys specializing in real property law, headquartered in Washington, D.C.
Amenity A natural or manmade feature of real property that enhances its value and attractiveness, though it is not essential to the property's use
Amortization Repayment of a loan in installments of principal and interest. rather than interest-only payments.
Amortization schedule A timetable for repayment of a debt or mortgage loan, showing the amount of each payment, what portion is applied to interest and principal, and the remaining balance
Amortization term The amount of time required to repay the mortgage loan, expressed in number of months
Amortize To pay off a loan or mortgage with periodic payments that cover both principal and interest
Amortized loan A loan in which both the principal and interest are payable in monthly or other periodic installments over the term of the loan, with no balloon payment prior to maturity
Annual mortgagor statement An annual report sent to the borrower (mortgagor) each year, showing the amount paid in taxes and interest during the year, as well as the remaining mortgage loan balance
Annual Percentage Rate (APR) The total finance charge (interest, loan fees, points) expressed as a percentage of the loan amount.
Annuity The return, including interest, from an investment of capital, paid in a series of regular payments
Appraisal An estimate of the property's value provided by a professional appraiser.
Appraised value The estimate of a property's fair market value, based on an appraiser's analysis of the property
Appraiser An individual educated to estimate the value of real property and personal property
Appreciation An increase in the worth of a property due to changes in economic conditions or other causes; the opposite of depreciation
Appurtenance Anything attached to, or used with, a parcel of land that will go to the new owner on conveyance of the land
ARM Adjustable-rate Mortgage. Also see "Variable Rate Mortgage"
Assessment A tax, charge or levy against a property made by the government, based on its value, and levied for a specific purpose, such as to finance sidewalks, a sewer, etc.
Assessment rolls The public record of taxable property
Assessor A public official who evaluates the value of a property for taxation purposes
Asset Anything of monetary value owned by an individual, including real property, personal property, and enforceable claims against others (bank accounts, stocks, mutual funds, etc.)
Assign To transfer interest
Assignee One who receives an assignment or transfer of rights
Assignor One who makes an assignment or transfer of rights to another
Assumable mortgage A mortgage that allows a new owner to take over its obligations
Assumption The process of transferring the seller's existing mortgage and liability for payments to the buyer when purchasing a property, which usually saves the buyer money, since assuming a new mortgage incurs additional closing costs and possibly higher interest charges
Assumption clause The provision in an assumable mortgage that allows a buyer to take responsibility for that mortgage from the seller
Assumption of Mortgage A buyer's agreement to assume the liability under an existing note that is secured by a mortgage or deed of trust. The lender must approve the buyer in order to release the original borrower (usually the seller) from liability.
Attachment
Seizure of property through Court process to force payment of a debt
Attorney-in-fact One who holds a power of attorney from another to execute legal documents on behalf of the grantor of the power
Back ratio The ratio of monthly housing costs (principal, insurance, taxes, and interest) plus regular monthly payments to gross monthly income, used by the lender to evaluate an applicant's qualification for a loan; typical back ratios are between 32 - 45 percent
Balloon mortgage A mortgage with level monthly payments over a stated term, but which requires a lump sum payment in full due at the end of an earlier specified term
Balloon Payment A lump sum principal payment due at the end of some mortgages or other long-term loans.
Bankruptcy A legal proceeding in a federal court in which a debtor who owes more than the total of his or her assets can surrender those assets to the Bankruptcy Court, thereby being relieved of the future obligation to repay his or her unsecured debts; a Trustee in Bankruptcy administers the assets, selling them to pay as much of the debt as possible
Bargain and sale deed A deed that carries with it no warranties against liens or other encumbrances, but which implies that the grantor has the right to convey title
Basis The financial interest an owner of an investment property has, as determined by the Internal Revenue Service, in order to determine annual depreciation and gain or loss on the sale of the asset Adjusted Basis: When property is purchased, the owner's basis is calculated to be the property cost plus the value of any capital expenditures for improvements made, minus any depreciation taken
Benchmark A permanent reference mark made on a piece of property for the sake of surveyors
Beneficiary The person named to receive income from a trust, an estate, or a deed of trust
Bequeath To gift or transfer personal property to another party, executed via a will
Betterment An improvement to property that increases its value, as opposed to repairs or changes that maintain its value only
Bid A financial offer to purchase a property
Binder Sometimes known as an offer to purchase or an earnest money receipt. A binder is the acknowledgement of a deposit along with a brief written agreement to enter into a contract for the sale of real estate.
Blanket loan A mortgage covering more than one parcel of real estate, which provides for each individual parcel's partial release from the mortgage upon repayment of a portion of the debt
Bond A written financial obligation, usually secured by a mortgage or a deed of trust, and often posted with the Court, to guarantee against loss incurred with a potential claim
Breach Failure to follow through on a contractual promise or legal obligation
Bridge loan A form of second trust, collateral for which is the borrower's present home, usually taken on to allow the proceeds from the sale of the borrower's present home to be used to close on a new home, before the previous home is sold
Broker An intermediary who assists in negotiating contracts between two or more parties, for a fee; in real estate, a broker is licensed to assist in the purchase, selling, rental or managing of real estate; the broker's services will vary, depending on whether he or she is employed by the seller or the buyer
Building code An ordinance that specifies minimal standards for construction, alteration, or demolition of a building, set for the sake of safety
Building Restriction Line (or "Set-back") The minimal distance from the road where a building may be positioned, which appears in the original plat of subdivision, restrictive covenants, or in zoning ordinances and building codes
Bureau of Land Management The branch of government responsible for the surveying and management of public lands
Buy-back agreement A written agreement which specifies the conditions under which the seller is allowed to repurchase the property, usually restricted to a certain period of time and to a price stated in the agreement
Buydown Permanent - prepaid interest that brings the note rate on the loan down to a lower, permanent rate. Temporary - prepaid interest that lowers the note rate temporarily on the loan, allowing the buyer to more readily qualify and to increase payments as income grows.
Buyer-agency agreement When the broker is the agent for the buyer and is financially obliged to the buyer
Buyer's market When the real estate buyer is at advantage because there is more supply of houses or real estate available for sale than there is demand, thus lowering prices
Call option A provision of a mortgage that allows the mortgagee, or lender, to require the mortgage to be due and payable for any reason at the end of a specified period of time
Cap The limit on how much an interest rate or monthly payment can change, either at each adjustment or over the life of the mortgage.
Capital expenditure The expense incurred making an improvement to a property in order to extend it useful life or to add to its value
Capital gain Profit earned from the sale of an asset
Capitalization A mathematical formula that estimates the value of a property, utilizing the rate of return on the investment and the annual net operating income expected
Capitalization rate The rate of return a property will produce on the owner's investment
Cash-out refinance A loan for refinancing a property which offers cash over and above what is needed to repay the first mortgage, closing costs, points and any other mortgage liens due. The additional cash can be used for any purpose
Cash Reserves The amount of the buyer's liquid cash remaining after making the down payment and paying all closing costs.
Caveat Emptor Translation: "buyer beware", meaning that the buyer is responsible for inspecting any real estate or property before purchase for defects, as the seller is not required to disclose any problems to the buyer, though if asked outright, cannot conceal any defects
CC&Rs Covenants, conditions and restrictions. A document that controls the use, requirements and restrictions of a property.
Certificate of Commitment The lender's approval of a VA loan, which is usually good for up to six months.
Certificate of deposit A document provided by a bank or financial institution that is proof of a deposit of funds with that bank or institution, also promising to return the deposit plus earnings at a specified interest rate within a specified time period
Certificate of Eligibility A document issued by the U.S. government certifying a veteran's eligibility for a VA guaranteed loan for a home or business
Certificate of occupancy A city or county document certifying that a building is approved for occupancy, often required by insurance companies to insure the property
Certificate of Reasonable Value (CRV) A document that establishes the maximum value and loan amount of a VA guaranteed mortgage.
Certificate of Satisfaction A document recorded with land records and signed by the Noteholder of a property, showing release of a mortgage, deed of trust, or lien on that property
Certificate of title A statement of opinion provided by a title company or attorney, based on examining public records, stating that the title to a piece of real estate is legally held by the current owner; because this certification does not cover matters not of record, it is no longer commonly used
Chain A unit for measuring land equaling 66 feet in length
Chain of Title The series of all historical title documents showing the succession of owners of a property, as evidenced in the land records, whereby it is proven that the present owner of that property in fact holds the title
Chattel Personal property
Clear title A document establishing ownership of a property that is free of any legal questions or controversies as to the current ownership
Closing Also known as "escrow" or "settlement". The process of finalizing the sale of a property via a meeting of the buyer, seller and lender, at which legally binding documents are executed, money is dispersed, the deed is prepared, and ownership is formally transferred from the seller to the buyer
Closing costs Expenses over and above the price of the property that are incurred by the buyers and sellers in transferring ownership of property, usually including property insurance, taxes, attorney's fees, an origination fee, an amount placed in escrow, title insurance, the mortgage insurance premium, points, and filing fees
Closing Statement The financial disclosure statement that accounts for all of the funds received and expected at the closing, including deposits for taxes, hazard insurance, and mortgage insurance.
Clouded Title, or Cloud on Title Any conditions revealed by a title search, usually during the sale of the property, that make the title to a piece of real estate controversial; can only be removed by a quitclaim deed, release, or court action
Coinsurance A sharing of insurance risk between the insurer and the insured, and it depends on the amount of the policy and the actual value of the property insured at the time of the loss
Coinsurance When more than one insurance company shares the risk of a particular transaction or series of transactions; lenders may require co-insurance on large commercial projects
Collateral As asset pledged to secure a loan; collateral for a mortgage is typically the property itself
Co-maker A person who takes on equal responsibility for the repayment of a loan by signing the promissory note along with the borrower
Commission The fee charged by a broker or agent for negotiating a real estate or loan transaction, usually a percentage of the selling price of the property or amount of the loan
Commitment letter A formal document issued by the lender, stating the terms under which the lender agrees to lend money to a homebuyer
Commitment Period The period during which a loan approval is valid.
Common area assessments Fees levied against individual unit owners in a condominium or planned unit development project to generate additional capital to defray homeowners' association expenses, and to pay for repairs, maintenance and improvements to the common areas of the project
Common Interest Community(CIC) An arrangement among property owners whereby they have mutual ownership of common areas of a property (e.g., condominiums, townhouses and planned unit developments) often through membership in an association
Common law An unwritten body of law or ethical agreements, originating from general customs in England
Community Land Trust Mortgage Option A financing option that enables lower or moderate-income buyers to purchase housing that has been improved by a nonprofit Community Land Trust, as well as to lease the land on which the property stands
Community property In some US states, a recognized right of ownership, that any property acquired during a marriage as being jointly owned by both spouses, except that acquired as specifically personal for either individual
Comparables, or Comparable Properties Properties that are similar in size, style, location and amenities to the property under consideration in an appraisal, which are used in the appraisal process to help determine the approximate fair market value of the subject property
Comparative market analysis (CMA) A comparison of the sale prices of similar properties (e.g., size, style, location, amenities) in a given area, for the purpose of determining the fair market value of a property
Condemnation The County or City determination that a building is dangerous for occupancy and must be demolished
Conditional-use permit Written governmental permission given to allow a use of a property that is ordinarily inconsistent with existing zoning laws, but which is deemed necessary for the common good
Condominium A form of real estate ownership where the owner receives title to a particular unit and has a proportionate interest in certain common areas. The unit itself is generally a separately owned space whose interior surface (walls, floor, ceilings) serve as its boundaries.
Conservator An individual designated by the Court to protect and preserve the property of someone who is not able to manage his or her own affairs- See "Guardian"
Construction loan A short-term loan for financing the cost of construction of a structure, whereby payments are made to the builder usually in increments as the work progresses
Contingency A condition that must be satisfied before a contract is binding. For instance, a sales agreement may be contingent upon the buyer obtaining financing.
Contract An oral or written, often legally-binding, agreement between two parties
Contract for Deed, or Land Contract A method of financing whereby the ownership of a piece of property or real estate remains in the seller's name as security until the buyer pays the purchase price in full
Conventional loan, or Conventional mortgage A real estate loan or mortgage that is not insured or guaranteed by a government agency, such as the VA or FHA
Conversion Clause A provision in some ARMs that enables home buyers to change an ARM to a fixed rate loan, usually after the first adjustment period. The new fixed rate is generally set at the prevailing interest rate for fixed rate mortgages. This conversion feature may cost extra.
Convertibility clause A provision offered in some adjustable-rate mortgages giving the borrower the option to change the ARM to a fixed-rate mortgage at a specified point in time after the loan originated
Convertible ARM An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions
Conveyance Any document by which the title to real property is transferred
Cooperative A form of multiple ownership in which a corporation or business trust entity holds title to a property and grants occupancy rights to shareholders by means of proprietary leases or similar arrangements.
Cost approach A method used by appraisers to estimate the value of a property, in which the appraiser's estimate of the replacement cost of the building is added to the estimated land value, minus the depreciation
Cost of funds index (COFI) An index used to determine changes in the interest rate for certain adjustable-rate mortgage plans, determined by the weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco
Co-tenancy Ownership of the same piece of property or real estate by more than one person
Counteroffer A new offer, with different terms and conditions, made in rejection of an original offer received
Covenant A clause written into mortgages, deeds or other real estate documents that obligates or restricts the borrower's actions, and which, if violated, can result in foreclosure of the property
CRB Certified Residential Broker. To be certified, a broker must be a member of the National Association of Realtors, have five years experience as a licensed broker and have completed required Residential Division courses.
Credit history, or Credit report A record, prepared by an independent source, of an individual's debts and status of their payment, useful to a lender in qualifying a potential borrower for a loan
Credit life insurance A type of insurance that can be purchased by mortgagors that will guarantee payment of the mortgage if the mortgagor dies while holding the policy
Debt Ratios The comparison of a buyer's housing cost to his or her gross or net effective income, and the comparison of a buyer's long-term debt to his or her gross or net effective income. The first ratio is housing ratio; the second ratio is total debt ratio.
Deed A written document that conveys the ownership of real estate from one person or party to another
Deed-in-lieu, or Deed-in-lieu of foreclosure A deed given by a mortgagor to the mortgagee when the mortgage is in default, to avoid foreclosure
Deed of trust A written document that grants a trustee, in the event of foreclosure, the full power to sell, mortgage and subdivide the property in question
Deed Restriction A clause in a Deed that limits the uses of the property (e.g., types or quantities of structures permitted)
Default The failure to meet the legal obligations in a contract; in real estate, failure to pay mortgage payments as scheduled or to comply with other stipulations of the mortgage
Deferred interest Interest on a mortgage which is delayed because the monthly payment of the mortgage is not large enough to cover the entire principal and interest due, and therefore is added to the loan balance See "negative amortization"
Deficiency judgment A claim made by the holder of a note against the maker, in the event that a foreclosure sale does not bring in enough proceeds to fully cover the note and the costs of sale, for the difference
Delivery The final, unconditional and absolute transfer of a Deed from seller to buyer, such that the seller cannot revoke the transfer of ownership; the Deed itself does not pass title until the seller delivers it to the buyer
Depreciation A decline in the value of property, due to any cause; the opposite of appreciation Also an expense deduction taken for tax purposes over the period of owning income property
Devise To dispose or convey ownership of real property via a will
Disclosure A statement of facts made by the buyer about the condition of a property being sold and its surrounding area, required by law in most US states
Discount point A unit of measurement used for loan charges, with one point equaling 1 percent of the value of the loan
Dower The rights of a spouse to the property of their deceased spouse
Down payment The amount of the purchase price of a property paid in cash (i.e. not financed with a mortgage) that is required to secure the property; typically 20%
Dual agency Representation of opposing parties in a transaction (e.g. when a realtor is the agent for both buyer and seller); requires consent of both parties to be allowed, and is illegal in some US states
Due-On-Sale Clause A clause that requires a full payment of a mortgage or deed of trust when the secured property changes ownership.
Earnest Money The portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith.
Easement The permanent or temporary right to use the property of another for a specific purpose -- e.g. for access over the property, putting up utility lines, etc.
Egress The right to leave or exit over a piece of property
Eminent domain The right of the government to take over private property for public purposes upon payment of its fair market value
Encroachment A physical, illegal intrusion onto another's adjoining property; examples are a structure, driveway, fence
Encumbrance Any claim against the fee simple title to property, such as a lien, mortgage, or easement
Equal Credit Opportunity Act (ECOA) A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs
Equity The owner's financial interest in a property, over and above any indebtedness for that property; or the difference between the fair market value of the property, and the amount still owed on its mortgage
Equity Sharing A form of joint ownership between an owner/occupant and an owner/investor, whereby the owner/investor receives depreciation deductions as his portion of interest in the property, and the owner-occupant receives some of the tax write-offs for interest and taxes, as well as part of his monthly payment being applied against his rent. If the property were sold, the co-owners would also divide the profit
Escheat Property that reverts to state ownership when an individual dies without a will and without heirs
Escrow A procedure in which a third party acts as a stakeholder for both the buyer and the seller. carrying out both parties' instructions and assuming responsibility for handling all of the paperwork and distribution funds.
Escrow account An account established by an escrow agent to hold funds for the agent's principal until the consummation of the transaction
Escrow instructions A document that outlines the duties of the escrow agent and the obligations of the parties involved in an escrow transaction
Escrow payment; also "impounds" or "reserves" in some states The portion of a mortgagor's monthly payment that is retained by the escrow agent to cover the costs of taxes, hazard or mortgage insurance, lease payments, and other costs incurred in the course of the transaction
Estate An individual's possessions and property, relevant particularly at the time of death
Eviction The legally directed removal of an occupant from real property
Exclusive listing, or Exclusive agency listing, or Exclusive right-to-sell listing A written contract giving a licensed real estate broker the exclusive right to sell a property for a designated period of time, on terms stated by the owner, for a fee, while also reserving the owner's right to sell the property himself, without paying anyone a commission
Executor A person named in a will, or in the absence of such designation, appointed by the probate court, to administer an estate and carry out its terms
Extended Mortgage A mortgage in which the due date of payment is extended, and is usually charged at a higher interest rate than the original mortgage
Fair Credit Reporting Act A federal law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies, and establishes procedures for rectifying errors on individuals' credit records
Fair Housing Act A federal law which prohibits discrimination in housing based on race, color, religion, sex, handicap, familial status and national origin
Fair market value The highest price that a buyer, who is willing but not required to buy, would pay for a piece of property or home, and the lowest price that a seller, who is willing but not required to sell, would accept
Fannie Mae The Federal National Mortgage Association (also FNMA), a private corporation which is federally chartered to provide financial products and services that increase the availability and affordability of housing, by purchasing mortgages from banks and other lending institutions; the FNMA is the largest non-bank financial services company in the world, as well as the largest resource for financing of home mortgages in the U.S.
Farmer's Home Administration (FmHA) A federal agency that provides credit assistance to farmers and other individuals residing in rural areas of the U.S.
Federal Deposit Insurance Corporation (FDIC) An independent federal agency that insures the deposits in commercial banks
Federal Home Loan Mortgage Corporation (FHLMC) Called "Freddie Mac"; a part of the secondary market, particularly used to purchase loans from savings and loan lenders within the Federal Home Loan Bank Board.
Federal Housing Administration (FHA) An agency of the U.S. Department of Housing and Urban Development (HUD), whose function is the insuring of residential mortgage loans made by private lenders; while setting standards for construction and underwriting, the FHA itself does not lend money, or construct housing
Federal National Mortgage Association (FNMA) Popularly known as "Fannie Mae"; a privately owned corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by the FHA or guaranteed by the VA, as well as conventional home mortgages.
Fee Simple An estate in which the owner has unrestricted power to dispose of the property as he wishes, including leaving by will or inheritance. It is the greatest interest a person can have in real estate.
FHA insurance Mortgage insurance provided by the Federal Housing Administration to protect banks, savings and loans, and mortgage companies against loss on real estate loans
FHA Loan A loan insured by the Federal Housing Administration (of the Department of Housing and Urban Development).
Fiduciary relationship A relationship of trust and confidence, as between principal and agent, trustee and beneficiary, attorney and client
Finance Charge The total cost a borrower must pay, directly or indirectly, to obtain credit according to Regulation Z.
Finder's fee A commission paid to a mortgage broker for sourcing a mortgage loan for a prospective borrower
First mortgage A mortgage that is the primary lien against a property
Fixed Rate Mortgage A conventional loan with a single interest rate for the life of the loan.
Fixture Any item of property that is attached to real property such that it becomes a permanent part of the real property, and therefore is usually sold with it
Foreclosure A legal proceeding usually initiated by the lender or creditors, involving a forced sale of a property owned by a borrower who has defaulted on payment of, or on the terms of, a loan on said property, and whereby the borrower is deprived of his or her interest in the property
Forfeiture The loss of money, property, rights, or privileges due to a breach of legal obligation
Forfeiture of Title The provision in a deed that accounts for title being passed to another, should certain terms not be met or certain circumstances occur
Freddie Mac The Federal Home Loan Mortgage Corporation (also FHLMC), a private corporation that is federally chartered to purchases and sells mortgage loans; a major player in the secondary market, along with the Federal National Mortgage Associate (FNMA)
Front ratio The ratio of a potential borrower's monthly housing costs to their gross monthly income, utilized by lenders to qualify an applicant for a loan; typically 28-40 percent is acceptable
Fully amortized ARM An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to pay off the remaining balance at the interest accrual rate over the amortization term
Fully indexed note rate The index value at the time of application for an adjustable rate mortgage (ARM) plus the gross margin stated in the note
Fully Indexed Rate The maximum interest rate on an ARM that can be reached at the first adjustment.
General warranty deed A deed in which the grantor warrants title against all claims, offering the greatest guarantee of protection of any type of deed, and which is used in most real estate deed transfers of title
Gift Letter A letter from a relative stating that an amount will be gifted to the buyer, and that said amount is not to be repaid.
Ginnie Mae The Government National Mortgage Association (GNMA), a United States corporation that guarantees privately issued securities backed by pools of mortgages insured by the Federal Housing Administration, the Farmers Home Administration, or the Veterans Administration
Government National Mortgage Association (GNMA) Called "Ginnie Mae"; a government part of the secondary market that deals primarily in recycling VA and FHA mortgages, particularly those that are highly leveraged.
Graduated Payment Mortgage A residential mortgage with monthly payments that start at a low level and increase at a predetermined rate.
Grantee The person who, by written document, receives title or an interest in real property from a grantor
Grantor The person who, by written document, transfers title to or an interest in real property to a grantee
GRI Graduate, Realtors Institute. A professional designation granted to a member of the National Association of Realtors who has successfully completed courses covering Law, Finance and Principles of Real Estate.
Gross Lease The most common of residential leases, whereby the landlord pays for all property expenses incurred through ownership, such as taxes, insurance, repairs, etc.
Ground Lease A long-term lease of land (usually 99 years) that allows the lessee to build and use the land as agreed in the lease, at the end of which, the land and any improvements revert to the owner
Ground rent The payment made for the use of land when the title to the property is of a leasehold estate, rather than as a fee simple estate
Growing-equity mortgage (GEM) A fixed-rate loan for which the monthly payments increase over a designated period of time, with the increased amount of the monthly payment being applied directly to the principal balance, thereby shortening the term of the loan
Guarantee mortgage, or Insured mortgage A mortgage that is guaranteed against default by a third party (such as the FHA), and for which the borrower must pay an insurance premium
Guardian An individual designated by the Court to protect and preserve the property of someone who is not able to manage his or her own affairs -See "Conservator"
Hazard insurance Insurance protection for specified losses due to natural causes, such as fire, floods, earthquake, tornadoes, and other "acts of God"
Heir An individual who will potentially inherit an interest in land from someone who dies
Hiatus A gap or space between two parcels of lands that is not included in the legal description of either parcel
Home equity line of credit, or Home equity loan A mortgage loan (usually not the primary mortgage) or line of credit which gives the property owner the option to obtain cash advances from the loan proceeds, using his or her residence as collateral, but which is not to exceed a pre-arranged amount of the owner's total equity in the property
Homeowners' association A nonprofit association of individual owners of units in a multi-unit structure (either a planned unit development, or a condominium) that manages the common areas of that structure. In a planned unit development (PUD) project, the association holds title to the common elements, whereas in a condominium project, it holds no title to the common elements
Homeowner's insurance An insurance policy available to residential real estate owners that protects homeowners against financial loss from fire, theft, public liability, and other risks
Homestead Real estate that is owned and utilized as the primary family residence, protected in some states as exempt from the claims of creditors
Homestead deed A document filed in the land records asserting a homestead exemption, protecting a variable amount of his assets (depending on which state) against the claims of creditors
Home Inspection Report A qualified inspector's report on a property's overall condition. The report usually includes an evaluation of both the structure and mechanical systems.
Home Warranty Plan Protection against failure of mechanical systems within the property. Usually includes plumbing, electrical, heating systems and installed appliances.
Housing ratio, or Debt-to-income ratio The percentage that results from dividing a borrower's housing expenses by his/her gross monthly income, used by the lender to evaluate an applicant's qualification for a loan
HUD-1 statement The document used in closing a real estate transaction (also known as a "closing statement" or a "settlement sheet") which itemizes the funds that are payable at closing, including broker commissions, loan costs, and escrow amounts, and which provides a summary of the seller's net proceeds and the buyer's net payment at closing. It is required by the US Department of Housing and Urban Development (HUD) whenever federally-related mortgages are being made on residential properties
Impound, or Reserves The portion of a borrower's monthly payments held by the lender to pay for taxes, hazard and mortgage insurance, lease payments, and other items that will come due
Income approach The method of estimating the value of a property by calculating its generated income
Income property Real estate developed for the purpose of generating income
Indemnify To provide for compensation in the case of loss or damage to property
Indemnity The statement of terms under which loss or damage to property will be compensated
Index A measure of interest rate changes used to determine changes in an ARM's interest rate over the term of the loan.
Ingress The right to enter on or over a piece of property
Initial Interest Rate The introductory interest rate on a loan; signals that there may be rate adjustments later in the loan.
Insurable Title A property title which an insurance company is willing to insure against possible claim
Installment contract, or Contract for deed A contract for the sale of real estate whereby the buyer is in possession of the property while paying off the purchase price in periodic installments, despite the title being retained by the seller until the future date of final payment
Insured closing letter An indemnity provided by a title insurance company to a lender, whereby the title insurance company assumes responsibility in the case that the closing agent does not fulfill the terms of the loan, or misappropriates the loan proceeds
Insured mortgage A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI) so that if the borrower defaults on the loan, the insurer compensates the lender the lesser of the loss incurred or the actual insured amount
Interest rate buydown plan An arrangement made for the initial years of a mortgage whereby the seller (or any other party) deposits money into an account that is then released toward the monthly payments on the mortgage, thereby bringing the mortgagor's interest rate down below the actual interest rate
Interest rate ceiling The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage note
Interest rate floor The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage note
Interim financing A temporary or short-term loan, often made during the construction phase of a building project, and usually replaced by a permanent long-term mortgage
In testate The condition of dying without leaving a will. The description of an estate without a will
Involuntary lien A claim or charge against property placed without the consent of the property's owner
Joint Ownership Agreement An agreement made between two or more owners of the same property, defining their rights and responsibilities (e.g. recommended in the case of married owners of property)-See Equity sharing
Joint Tenancy An equal undivided ownership of a property by two or more persons. Upon the death of any owner, the survivors take the decedent's interest in the property.
Joint tenancy, or Tenants by the entirety Ownership of real estate by two or more parties held jointly for life; if one of the owners dies, the survivor(s) inherit the property without reference to the deceased's will
Judgment A decision or decree made by a court of law
Judgment lien A claim against the real property of a debtor, as decreed by the court
Jumbo Loans Mortgage loans that exceed the loan amounts acceptable for sale in the secondary market; these jumbos must be packaged and sold differently to investors and therefore have separate underwriting guidelines.
Jumbo Loan, or Non-conforming loan A loan amount that exceeds the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; because such loan cannot be funded by these two agencies, it carries a higher interest rate
Junior mortgage, or Secondary mortgage A mortgage whose claim to repayment is of lesser priority than another, previously recorded mortgage
Late charge The penalty a borrower pays when a payment is made after the due date
Lease A written agreement between the property owner and a tenant that stipulates rent to be paid, as well as the terms under which the tenant may reside in the real estate for a designated period of time
Leasehold estate The tenant's right to title to a property for a specific period of time whereby the tenant does not actually own the property but has a long-term lease on it
Lease option A lease that gives the tenant the right to purchase the property, either during the lease term or at its end
Lender's Title Insurance An insurance policy covering a lender for the loan amount, whereby the coverage declines in amount as the loan is paid off, to the point where there coverage ends when the loan is paid completely
Lessee The individual or party who takes property upon a lease
Lessor The individual or party who grants property upon a lease
Liabilities An individual's financial obligations
Lien A legal hold or claim on property as security for a debt or charge.
Life estate The right to use, occupy and own, for the duration of the life of the individual
Lifetime payment cap, or Lifetime rate cap The limit on the amount that payments can increase or decrease over the term of an adjustable-rate mortgage (ARM)
Liquid asset Cash, or an asset that can be readily converted into cash
Liquidated damages The compensation predetermined by both parties to a contract to be paid to the injured party, should the other party breach the contract
Lis pendens A legal document filed in either a federal or state court indicating that a suit is pending against property located in the county where the notice is recorded
Listing agreement A contract by which a broker is employed by the seller to find a buyer for the seller's real estate, according to the seller's terms, and for which service, the broker is paid a commission
Listing broker A broker whose office initiates the property listing (as opposed to the cooperating broker, whose office negotiates the sale); the listing broker and the cooperating broker may be the same person
Loan Commitment A written promise to make a loan for a specified amount on specified terms.
Loan-To-Value-Ratio The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.
Loan origination The process by which a lender sets up a mortgage loan secured by real property
Loan origination fee The fee charged by the lender to the borrower for setting up a mortgage loan, usually computed as a percentage of the total mortgage amount
Loan-to-value (LTV) percentage The proportion of the amount of the mortgage loan against the appraised value or sales price of the piece of property being pledged as collateral; e.g., a home with appraised value of $100,000 but with a $90,000 mortgage has a LTC of 90 percent
Lock-in The fixing of an interest rate or points at a certain level, usually during the loan application process. It is usually done for a certain period of time, such as 60 days, and may require a fee or premium in the form of a higher interest rate.
Lock-in period The time period during which the set interest rate is guaranteed to the borrower
Loss Payable Clause A provision in an insurance policy that provides payment for any loss to two or more parties, as their interest so justifies, the two parties typically being the owner and the lender
Lot A parcel of land with fixed boundaries as determined by a survey
Majority The age at which an individual is legally entitled to handle his or her own affairs
Margin The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.
Market value, or Fair market value The most likely price that a piece of property or home can realistically be sold for, and is dependent on the selling price of similar real estate in the area
Marketable title A clear, unencumbered title, reasonably acceptable without the threat of the risk of litigation
Maturity The date on which the principal balance of a loan, bond, or other financial commitment is due and payable
Mechanic's lien A lien created by statute to allow unpaid contractors, laborers or suppliers who have performed work on or furnished materials for the construction of a building to recover the value of their work
Metes and Bounds Means for describing property by a set of directions and distances, when there isn't identification based on a surveyed lot number
Minor An individual below the age at which he or she is legally entitled to handle his or her own affairs
Monument of SurveyThe indications made on natural or man-made objects that indicate the boundaries of a survey
Mortgage A legal document that pledges a property to the lender as security for the payment of a loan or debt
Mortgage broker An individual or company that acts as an agent between borrowers and lenders for the purpose of arranging and negotiating mortgage contracts; who is paid a fee for such service
Mortgage insurance A contract that guarantees the lender against loss caused by a mortgagor's default on a government or conventional mortgage; such insurance can be issued by a private company or by a government agency, and covers either only a percentage, or the total, of the mortgage loan
Mortgage Insurance Premium (MIP) The mortgage insurance required on FHA loans for the life of said loans; MIP can either be paid in cash at closing or financed in its entirety in the loan. The premium varies depending on the method of payment.
Mortgagee The lender in a mortgage transaction
Mortgagor The borrower in a mortgage transaction
Mortgage Life Insurance A type of term life insurance often bought by home buyers. The coverage decreases as the mortgage balance declines. If the borrower dies while the policy is in force, the mortgage debt is automatically covered by insurance proceeds.
Multiple-listing service (MLS) An organization of brokers who share their listing agreements with one another in order to find buyers for their properties more effectively than they could individually
National Association of Realtors (NAR) A real estate trade organization that sets the standards for integrity and honesty within the real estate profession nationwide
Negative Amortization Occurs when monthly payments fail to cover the interest cost. The interest that isn't covered is added to the unpaid principal balance, which means that even after several payments the borrowers could owe more than they did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that aren't high enough to cover the interest.
Net listing The advertisement of the price of property for sale in terms of the net price the seller will receive, once the property is sold, a type of listing which is illegal in many states
Net worth The total value of all of an individual's assets, minus all liabilities or debts
No cash-out refinance A transaction for refinancing a mortgage in which the new mortgage amount is limited to the sum total of the remaining balance of the first mortgage, points, closing costs, whatever is required to satisfy any liens that are more than one year old and other funds for the borrower's use (as long as the amount is one percent or less of the principal amount of the new mortgage)
Notary An individual authorized by law to certify documents and signatures
Note A legal document that obligates a borrower to repay a loan or owed sum of money at a stated interest rate over a designated period of time
Open listing A contract under which the broker is commissioned to find a buyer before the property is sold by the seller or another competing broker
Option The agreement to keep an offer to purchase or lease open for a specific period of time
Option listing An agreement by which the broker advertising the property has the right to purchase the listed property himself
Origination Fee A fee or charge for work involved in evaluating, preparing, and submitting a proposed mortgage loan. The fee is limited to one percent for FHA and VA loans.
Owner financing A property transaction for which the seller provides all or part of the financing to the buyer
Owner's Title Insurance A policy insuring the full purchase price of a piece of property for the buyer, usually including adjustments for inflation each year up to a maximum of 150% of the original policy amount, the premium for which is payable at the time of closing
Partial payment A payment that is less than the agreed upon monthly payment on a loan
Partition The forced dividing of real estate among parties who were previously its co-owners
Patent A first in a series of documents by which the federal or state government transfers ownership of public lands to an individual
Pay-off amount The total balance on an existing loan or mortgage
Payment Cap The maximum amount the payment can adjust in any given time frame.
Percolation test A testing of the soil on a property to evaluate if its absorption and drainage capacity will allow installation of a septic system
Personal property Property that does not qualify as real property
PITI Principal, Interest, Taxes and Insurance.
Planned Unit Development (PUD) A zoning designation for property developed at the same or slightly greater overall density than conventional development, sometimes with improvements clustered between open, common areas. Use may be residential, commercial or industrial.
Plat, or Plot A map showing a piece of land subdivided into lots, streets and common area, if applicable
Point An amount equal to one percent of the principal amount of the investment or note. Lender assesses loan discount points at closing to increase the yield on the mortgage to a position competitive with other types of investment.
Power of attorney A written legal document authorizing a person to act as agent for another, to the extent outlined in the document
Power of Sale A provision in a will, mortgage or trust agreement authorizing the sale or transfer of land in accordance with the terms of the provision
Pre-Approval A commitment from a lender to loan a certain amount of money to a buyer at a designated interest rate and for a specified period of time, which gives the buyer an advantage in competing to purchase real estate or a home
Preforeclosure sale The sale of a property by a mortgagor for less than the amount owed to the lender of the mortgage for the property, thereby allowing the mortgagor to avoid foreclosure, and done with the approval of the lender
Prepayment Penalty A fee charged to a borrower who pays a loan before its due. Not allowed for FHA or VA loans.
Private Mortgage Insurance (PMI) Insurance written by a private company protecting the lender against loss if the borrower defaults on the mortgage.
Pre-qualification The process by which the amount of loan a prospective buyer will be eligible to borrow is determined, based on his or her income and expenses, which can be used to demonstrate the buyer's financial capability to the seller
Prime rate The most favorable interest rate that banks charge, usually to their preferred customers
Principal The amount borrowed, not including interest or other charges
Principal balance The portion of the original amount borrowed that is due on a loan or mortgage at any point in time
Private mortgage insurance, or P.M.I. A policy that insures that the lender will recover a specific percentage of the loan amount from the insurance company in the event that the borrower defaults; is not backed by any government agency; is usually required when a down payment of less than 20% is put on real estate or a home purchased
Probate The court proceedings to prove that a will is valid
Procuring cause The action or person who brings about the desired result; e.g., under an open listing, the broker who brings in the buyer who actually purchases the property
Promissory note A written promise to pay a specified amount of money in a designated period of time, which is also transferable to a third party
Prorate To divide the proportionate share of existing expenses on a piece of property between the seller and buyer, e.g., taxes owed at the time of a transfer of title from the seller to the buyer
PUD (Planned Unit Development) A multi-unit property or subdivision that includes common property that is owned and maintained by a homeowners' association, for the use of the individual owners
Purchase Agreement A written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions. Also called a sales contract, earnest money contract, or agreement for sale.
Purchase money mortgage An agreement whereby financing provided by the seller is included in the purchase price
Quiet title A court action to remove a claims or objections of other parties on a title
Quitclaim deed A deed that releases whatever interest or title a grantor may hold in a property, without claiming any obligations or warranties
Radon A radioactive gas that can cause health problems if present in sufficient concentration, found in some structures
Rate Cap In an adjustable-rate loan, the ceiling on the amount that the interest rate can be increased at each adjustment
Rate Gap The difference between where the rate is now and where it could adjust to on an ARM. Also used to compare the difference between a current conventional rate and that of an ARM.
Rate lock, or lock-in A commitment to a specified fixed interest rate for a designated period of time, issued by a lender
Real estate agent An individual trained and licensed to negotiate the sale of real estate on behalf of the property owner
Real estate investment trust (REIT) An organization of individuals who purchase certificates of ownership in the trust, which then invests their money in real property, distributing the profits back to the individual investors free of corporate income tax
Real Estate Settlement Procedures Act (RESPA) A federal consumer protection law that requires certain disclosures of lenders to consumers relative to mortgage loans
Real property Land and appurtenances permanently on it, including buildings, trees, minerals, and the interest, benefits, and inherent rights thereof
Realtor® A real estate broker or associate active in a local real estate board affiliated with the National Association of Realtors®.
Realtor® The registered trademark reserved for the sole use of members of local Realtor boards affiliated with the National Association of Realtors; other real estate professionals who do not belong to the local board may not advertise themselves as Realtors
Recision The cancellation or annulment of a transaction or contract based on law or by mutual consent
Recording The entering or noting of documents affecting all transactions of real estate in the recorder's office in each county, making it public record; until recorded, a mortgage or deed is usually not valid against subsequent buyers
Recording fees Payment made to the lender for recording the sale of a property with the county office
Refinance To obtain a new mortgage loan on a property already owned
Regulation Z The set of rules governing consumer lending issued by the Federal Reserve Board of Governors in accordance with the Consumer Protection Act.
Remainder An interest in land that is postponed until the termination of some other interest
RESPA Abbreviation for the Real Estate Settlement Procedures Act, which is a federal law that requires lenders to provide information on estimated settlement costs, which is available for review by the buyers one time after application, and again once prior to or at the closing
Restrictive covenants, or Protective covenants A provision in a deed that limits how real estate ownership may be used
Reverse-annuity mortgage (RAM) A loan or mortgage whereby the amount of the monthly payments the borrower receives is based on accumulated equity, rather than on the agreed-upon total sum loaned
Reversion A clause in a transfer of title that returns the property to the grantor upon specified events or occurrences happening
Right of first refusal The right specified in an agreement to have the first opportunity to purchase or lease a given property before it is offered to others, or alternately, the prior right to purchase a property based on the same terms made by another buyer that were acceptable by the seller
Right of survivorship In joint tenancy, when one of the joint tenants dies, the right of the survivors to the deceased's interest in the property
Right-of-way Permission to pass across the property of another
Riparian rights The right of an owner of property to make use of waterways adjoining the property
Sales comparison approach The method of evaluating a property's value by comparing it to actual sales prices and values of comparable properties
Sale-leaseback A transaction in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller
SBA Abbreviation for the Small Business Administration
Second mortgage, or junior mortgage A mortgage whose claim to repayment is of lesser priority than another, previously recorded mortgage, usually or shorter term and often at higher interest
Secondary market Agents or agencies that buy mortgages from primary lenders, usually at discounted prices, to sell to investors
Section, or Section of land A parcel of land measuring one square mile or 640 acres
Set Back Lines The distance designated by zoning regulations that is required between the perimeter of a property and where structures can be positioned
Secured loan A loan guaranteed by collateral
Security The property pledged as collateral for a loan or mortgage
Seller take-back A contract whereby the seller of a property provides financing, sometimes as part of an assumable mortgage
Severalty, or Sole ownership Ownership of real property by only one individual
Special assessment An additional tax imposed by the government against specific parcels of real estate that will benefit from a public improvement, such as a street
Special warranty deed An agreement whereby the current owner/seller guarantees he has done nothing that would impair or cloud title, but does not make any guarantee for what occurred prior to his ownership of the property
Specific performance A legal action that requires a party to honor the terms of a contract
Statute of limitations The time period allowed for the filing of a legal suit to enforce a claim, after which any such claims are barred
Step-rate mortgage A loan that allows for the interest rate to increase in increments according to a designated schedule for a specified period of time, at the end of which, the interest rate returns to a constant percentage
Subagent An individual or party who is employed by someone already acting as an agent
Subdivision A tract of property that is divided into streets and individual lots
Subject to Taking ownership of a property with a lien (legal claim or charge) against it, but not assuming responsibility for the said lien, while the holder who forecloses the lien can take the property, but may not collect money from the owner who took "subject to"
Subsidized second mortgage An alternative financing option for low- an moderate-income households, issued by a state or county housing foundation, agency or nonprofit corporation, whereby the buyer can purchase a first mortgage with a subsidized second mortgage behind it; payment on the second mortgage is often deferred and carries a low or no interest rate, and a portion of the mortgage may be forgiven incrementally for each year the buyer resides in the home
Survey The process of determining property areas, by measuring its dimensions, lot lines and other physical features-Also, the map that results from such measurements taken
Tax sale A sale of real property ordered by the court in order to raise money to cover delinquent taxes
Tenancy In Common A type of joint ownership of property by two or more persons with no right of survivorship.
Testate To die having prepared and left a valid will
Testator The individual who makes out a last will and testament
Time is of the essence A condition in a contract requiring the completion of a certain act within a designated period of time
Time-share A form of ownership interest which allows use of the property only for a fixed or variable period of time
Title A legal document that evidences a person's ownership of and right to possess a property
Title Insurance Policy A policy that protects the purchaser, mortgagee or other party against losses.
Title search Research into public title records to determine the current status of ownership of a piece of property; a licensed attorney must provide any legal interpretation of the records found
Torrens Title Now a dated system (only used in a few US states) whereby the court issues a certificate establishing the extent of an individual's estate, including any exceptions noted
Township A division of land that is six miles square, containing 36 square-mile sections
Tract A specific parcel of land
Transfer of ownership Any circumstance in which the ownership of a property changes hands, e.g., via outright, titled purchase, or the assumption of an existing on a property, or possession of the property via a land sales trust, even any transfer of a beneficial interest in the trust
Transfer tax State or local taxes imposed on a transfer of ownership of real property
Trust A right to a piece of property that is held for the benefit of another
Trust deed, or a Deed of trust A written document that grants the trustee the title to a piece of property for the benefit of another, and which gives the trustee the power to sell, mortgage or subdivide the property
Trustee A party who holds property for the benefit of another
Trustee's deed A deed conveying land ownership executed by the trustee who holds the land in trust
Trustor The borrower in a trust loan transaction
Truth-in-Lending A federal law that requires disclosure by a credit institution or lender of the terms and conditions of a loan or mortgage, including the annual percentage rate and any other charges, to the borrower when they apply for the loan.-Also see Regulation Z
Two-step mortgage An adjustable-rate mortgage that charges a below-market interest rate for a designated number of years (usually 5 or 7) after which the interest rate is adjusted to the current market conditions
Underwriting The process of analyzing a borrower's capability to honor repayment of a loan (evaluating his or her credit, assets, employment) along with the value of the property being purchased, to help minimize the risk involved for the party lending the purchase money
Unilateral contract A one-sided contract in which only one party is legally under obligation by the terms of the contract; one party promises an action to the second party, who is not legally required to respond, but if the second part does comply, then the first party is obligated to honor the promise made
Unsecured loan A loan that is not guaranteed by collateral
Usury The act of charging more than the maximum rate of interest permitted by law
VA guarantee An insurance contract for which the Veterans Administration (VA) guarantees the lender's recovery of a designated percentage of the loan amount from the insurer in the event that the borrower defaults on the loan
VA Loans A loan, made by a private lender, that is partially guaranteed by the Veterans Administration.
Valuation The estimated of value of a property
Variable rate mortgage, or Adjusted rate mortgage A mortgage with interest rates that may fluctuate based on market conditions
Verification of Deposit A statement signed by the borrower's financial institution that verifies the current balances in the borrower's accounts
Verification of Employment A statement signed by the borrower's employer that verifies the borrower's current position and salary
Vest To pass an immediate right on to a person
Vested Having the right to withdraw a percentage of a fund before its agreed-upon maturity date; e.g., the percentage vested to individuals with retirement funds differs; if someone is 80% vested, that means they can only withdraw 80% of the funds set aside for them until its maturity
Veterans Affairs - Department of Veterans Affairs (VA) A federal agency that insures residential mortgages made to eligible military veterans, which thereby encourages loans being made to veterans
Waiver The relinquishing of a right
Warranty A guarantee provided to the purchases regarding the quality of appliances or fixtures sold-Also a promise by the grantor of a piece of property that he or she is responsible to the buyer if the title of ownership is defect in any way
Warranty deed A document conveying ownership of a property that guarantees a clear, clean title
Will A written document stating how an individual chooses to have his or her property distributed after his or her death
Wraparound loan or Wraparound mortgage A method of refinancing which covers the remaining balance on an existing first mortgage as well as the additional amount of loan being requested by the mortgagor; full payments covering both mortgages are made to the Wraparound mortgagee, who then forwards on the portion of payment due to the first mortgagee
