The Reverse Mortgage Lady's
Real Estate Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

ABSORPTION RATE
The ratio of the number of properties in an area that have been sold against the number available. Used to show the volatility of a market.

ABSTRACTION METHOD
This method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land.

ACCELERATION CLAUSE
A provision in a mortgage that gives the lender the right to demand immediate payment of the outstanding loan balance under certain circumstances. Usually when the borrower defaults on the loan.

ACCESSORY BUILDING
A building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.

ACCRETION
The natural growth of a piece of land resulting from forces of nature.

ACRE
43,560 square feet. A measurement of area.

ACTUAL AGE
The amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE.

ADJUSTMENT DATE
The date the interest rate changes on an adjustable rate mortgage.

AD VAL OREM TAX
Taxes assessed based on the value of the land and improvements.

ADDENDUM
A supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form.

ADJUSTABLE-RATE MORTGAGE (ARM)
A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.

ADJUSTED BASIS
The value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.

ADJUSTED SALES PRICE
An opinion of a property's sales price, after adjustments have been made to account for differences between it and another comparable property.

AESTHETIC VALUE
The additional value a property enjoys based on subjective criteria such as look or appeal.

AFFIRMATION
A declaration that a certain set of facts are truthful.

AFFORDABILITY ANALYSIS
A calculation used to determine an individual's likelihood of being able to meet the obligations of a mortgage for a particular property. Takes into account the down payment, closing costs and on-going mortgage payments.

AGENT
A person who has been appointed to act on behalf of another for a particular transaction.

AMENITY
Any feature of a property that increases its value or desirability. These might include natural amenities such as location or proximity to mountains, or man-made amenities like swimming pools, parks or other recreation.

AMERICAN SOCIETY OF APPRAISERS
An organization of appraisal professionals and others interested in the appraisal profession.

AMORTIZATION
The repayment of a loan through regular periodic payment.

AMORTIZATION SCHEDULE
The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.

AMORTIZATION TERM
The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.

AMPERAGE
A measure of electric current describing the magnitude.

ANNUAL PERCENTAGE RATE (APR)
The rate of annual interest charged on a loan.

ANNUITY
A sum of money paid at regular intervals, often annually.

APPLICATION
A form used to apply for a mortgage loan that details a potential borrower's income, debt, savings and other information used to determine credit worthiness.

APPRAISAL
A ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.

APPRAISAL FOUNDATION
A not-for-profit educational organization established by the appraisal profession in the United States in 1987. It is dedicated to the advancement of professional valuation and responsible for establishing, improving, and promoting the Uniform Standards of Professional Appraisal Practice (USPAP).

APPRAISAL INSTITUTE
A world-wide organization dedicated to real estate appraisal education, publication and advocacy.

APPRAISAL PRINCIPLES
The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.

APPRAISAL REPORT
The end result of the appraisal process usually consists of one major standardized form such as, the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information. The purpose of the report is to convey the opinion of value of the subject property and support that opinion with corroborating information.

APPRAISAL STANDARDS BOARD (ASB)
An independent board of the APPRAISAL FOUNDATION, which writes, amends, and interprets USPAP. The ASB is composed of up to seven appraisers appointed by the Foundation's Board of Trustees. The ASB holds public meetings throughout the year to interpret and amend USPAP.

APPRAISED VALUE
An opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.

APPRAISER
An educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property.

APPRECIATION
The natural rise in property value due to market forces.

ARMS LENGTH TRANSACTION
Any transaction in which the two parties are unconnected and have no overt common interests. Such a transaction most often reflects the true market value of a property.

ASSESSED VALUE
The value of a property according to jurisdictional tax assessment.

ASSESSMENT
The function of assigning a value to a property for the purpose of levying taxes.

ASSESSMENT RATIO
The comparative relationship of a property's assessed value to its market value.

ASSESSOR
The jurisdictional official who performs the assessment and assigns the value of a property.

ASSET
Any item of value which a person owns.

ASSIGNMENT
Transfer of ownership of a mortgage usually when the loan is sold to another company.

ASSUMABLE MORTGAGE
A mortgage that can be taken over by the buyer when a home is sold.

ASSUMPTION
When a buyer takes over, or "assumes" the sellers mortgage.

ATTACHED HOUSING
Any number of houses or other dwellings which are physically attached to one another, but are occupied by a number of different people. The individual houses may or may not be owned by separate people as well.

BACKFILL
The slope of the ground around a house.

BALL COCK VALVE
The valve inside a toilet tank that controls the filling of the tank.

BALLOON MORTGAGE
A mortgage loan in which the monthly payments are not large enough to repay the loan by the end of the term. So at the end of the term, the remaining balance comes due in a single large payment.

BALLOON PAYMENT
The final large payment at the end of a balloon mortgage term.

BANKRUPTCY
When a person or business is unable to pay their debts and seeks protection of the state against creditors. Bankruptcies remain on credit records for up to ten years and can prevent a person from being able to get a loan.

BEAM
A structural supporting member.

BILL OF SALE
A physical receipt indicating the sale of property.

BIWEEKLY MORTGAGE
A mortgage where you make "half payments" every two weeks, rather than one payment per month. This results in making the equivalent of 13 monthly payments per year, rather than 12, significantly reducing the time it takes to pay off a thirty year mortgage.

BLIGHTED AREA
Any region of a city or town that has fallen into disrepair or otherwise has become undesirable.

BONA FIDE
Any genuine offer, made without intent to defraud or deceive.

BRIDGE FINANCING
An interim loan made to facilitate the purchase of a new home before the buyer's current residence sells and its equity is available to fund the new purchase.

BRIDGING
Structural members used between beams to strengthen the structure.

BROKER
An individual who facilitates the purchase of property by bringing together a buyer and a seller.

BTU
British Thermal Unit. A unit of measurement used to describe heating or cooling capacity.

BUFFER ZONE
A segment of land between two disparate municipal zones which acts as a shield to keep one zone from encroaching upon the other. Often used to separate residential districts from commercial areas.

BUILDING CODE
Regulations that ensure the safety and material compliance of new construction within a municipality. Building codes are localized to ensure they are adequate to meet the risk of common hazards.

BUILDING LINE OR SETBACK
The statutory distance between buildings and the property line, imposed by municipalities, home associations, or other agreements.

BUILT-INS
Specific items of personal property which are installed in a real estate improvement such that they become part of the building. Built-in microwave ovens and dishwashers are common examples.

BUNGALOW
A one-story, home-style dating from the early twentieth century. Often characterized by a low-pitched roof.

BUY DOWN
Extra money paid in a lump sum to reduce the interest rate of a fixed rate mortgage for a period of time. The extra money may be paid by the borrower, in order to have a lower payment at the beginning of the mortgage. Or paid by the seller, or lender, as incentive to buy the property or take on the mortgage.

BX CABLE
Electrical cable shrouded in a galvanized steel outer cover.

CALL OPTION
A clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time.

CAP
Associated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage.

CAPE COD COLONIAL
A single-story house style made popular in New England. Often characterized by a steep roof with gables.

CAPITAL
Accumulated goods and money which is most often used to generate additional income.

CAPITAL EXPENDITURE
An outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.

CASH-OUT REFINANCE
Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.

CAULKING
A pliable material used to seal cracks or openings such as around windows.

CAVEAT EMPTOR
Literally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.

CERTIFICATE OF DEPOSIT
A document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.

CERTIFICATE OF DEPOSIT INDEX
An index based on the interest rate of six month CD's. Used to set interest rates on some Adjustable Rate Mortgages.

CERTIFICATE OF ELIGIBILITY
A document issued by the Veterans Administration that certifies eligibility for a VA loan.

CERTIFICATE OF OCCUPANCY
Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.

CERTIFICATE OF REASONABLE VALUE (CRV)
Usually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.

CERTIFICATE OF TITLE
A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.

CERTIFIED GENERAL APPRAISER
Generally, any professional who has met the local or state requirements, and passed the appropriate certification exam, and is capable of appraising any type of property.

CERTIFIED RESIDENTIAL APPRAISER
A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.

CHAIN OF TITLE
The complete history of ownership of a piece of property.

CHATTEL
Any personal property which is not attached to or an integral part of a property. Chattel is not commonly taken into consideration when appraising the value of real property.

CIRCUIT BREAKERS
Electrical devices which automatically open electrical circuits if they are overloaded.

CLEAR TITLE
Ownership of property that is not encumbered by any counter-claim or lien.

CLOSING
A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).

CLOSING COSTS
All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.

CLOSING STATEMENT
The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.

CO-BORROWER
A second person sharing obligation on the loan and title on the property.

COLLATERAL
An asset which is placed at risk to secure the repayment of a loan.

COLLECTION
The process a lender takes to pursue a borrower who is delinquent on his payments in order to bring the mortgage current again. Includes documentation that may be used in foreclosure.

CO-MAKER
A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.

COMMON LAW
As opposed to statute law. Laws that have been established by custom, usage and courts over many years.

COMMISSION
A percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.

COMMON AREA ASSESSMENTS
Fees which are charged to the tenets or owners of properties to cover the costs of maintaining areas shared with other tenets or owners. Commonly found in condominium, PUD or office spaces.

COMMON AREAS
Any areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenets or owners of property near by. Commonly found in condominium, PUD or office spaces.

COMMUNITY PROPERTY
In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.

COMPARABLES
An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property whose value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.

COMPOUND INTEREST
Interest paid on the principal amount, as well as any accumulated interest.

CONCESSIONS
Additional value granted by a buyer or seller to entice another party to complete a deal.

CONDEMNATION
The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.

CONDENSATION
The transition of water vapor to liquid. Typically forms in areas of high humidity.

CONDOMINIUM
A development where individual units are owned, but common areas and amenities are shared equally by all owners.

CONDOMINIUM CONVERSION
Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.

CONDUIT
The pipe through which electric wiring is run.

CONSTRUCTION LOAN
A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.

CONTIGUOUS
Connected to or touching along an unbroken boundary.

CONTINGENCY
Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.

CONTRACT
A legally binding agreement, oral or written, between two parties.

CONVENTIONAL MORTGAGE
A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).

CONVERTIBLE ARM
A mortgage that begins as and adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.

COOPERATIVE (CO-OP)
A form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.

CORPORATE RELOCATION
A situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.

COST OF FUNDS INDEX (COFI)
An index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.

COVENANT
A stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.

CREDIT
A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.

CREDIT HISTORY
A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.

CREDITOR
A person to whom money is owed.

CREDIT REPORT
A detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.

CREDIT REPOSITORY
Large companies that gather and store financial and credit information about individuals who apply for credit.

CUL-DE-SAC
A dead-end street. One with only one entrance/exit.

DATE OF APPRAISAL
The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.

DEBT
An obligation to repay some amount owed. This may or may not be monetary.

DEBT EQUITY RATIO
The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.

DEED
A document indicating the ownership of a property.

DEED-IN-LIEU (OF FORECLOSURE)
A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.

DEED OF TRUST
A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.

DEED OF RECONVEYANCE
A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.

DEED OF RELEASE
A document which dismisses a lien or other claim on a property.

DEED OF SURRENDER
A document used to surrender any claim a person has to a property.

DEFAULT
The condition in which a borrower has failed to meet the obligations of a loan or mortgage.

DELINQUENCY
The state in which a borrow has failed to meet payment obligations on time.

DEPOSIT
Cash given along with an offer to purchase property, Also called EARNEST MONEY.

DEPRECIATION
The natural decline in property value due to market forces or depletion of resources.

DETACHED SINGLE-FAMILY HOME
A single building improvement intended to serve as a home for one family.

DISCOUNT POINTS
Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.

DISTRESSED PROPERTY
A mortgaged property which has been foreclosed on.

DOWNSPOUT
The pipe that water moves through to reach the ground from the rain gutter.

DUE-ON-SALE PROVISION
A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.

DUPLEX
A single-building improvement which is divided and provides two units which serve as homes to two families.

DWELLING
A house or other building which serves as a home.


DOWN PAYMENT
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.

EARNEST MONEY DEPOSIT
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.

EASEMENT
The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.

EAVE
The part of the roof that extends beyond the exterior wall.

ECONOMIC DEPRECIATION
The decline in property value caused by external forces, such as neighborhood blight or adverse development.

ECONOMIC LIFE
The amount of time which any income-producing property is able to provide benefits to its owner.

EFFECTIVE AGE
The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.

EMINENT DOMAIN
The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.

ENCROACHMENT
A building or other improvement on one property which invades another property or restricts its usage.

ENCUMBRANCE
A claim against a property. Examples are mortgages, liens and easements.

ENERGY EFFICIENCY RATIO
An efficiency rating system for air conditioning units that corresponds to the number of BTU's output per watt of electricity used.

EQUAL CREDIT OPPORTUNITY ACT (ECOA)
U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc.

EQUITY
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.

EQUITY BUILDUP
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.

ERRORS AND OMISSIONS INSURANCE
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.

ESCROW
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.

ESCROW ACCOUNT
An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.

ESCROW ANALYSIS
An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.

ESCROW DISBURSEMENTS
The payout of funds from an escrow account to pay property expenses such as taxes and insurance.

ESTATE
The total of all property and assets owned by an individual.

EXAMINATION OF TITLE
The report on the title of a property from the public records or an abstract of the title.

EXCLUSIVE LISTING
An agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.

EXECUTOR
The person named in a will to administer the estate.