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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

FACADE
The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.

FAIR CREDIT REPORTING ACT
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.

FAIR MARKET VALUE
The price at which two unrelated parties, under no duress, are willing to transact business.

FANNIE MAE
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.

FASCIA
The boards that enclose the eaves.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.

FEDERAL HOUSING ADMINISTRATION (FHA)
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.

FEE APPRAISER
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.

FEE SIMPLE
A complete, unencumbered ownership right in a piece of property.

FEE SIMPLE ESTATE
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.

FHA MORTGAGE
A mortgage that is insured by the Federal Housing Administration (FHA).

FINAL VALUE ESTIMATE
The opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.

FIRST MORTGAGE
The primary loan or mortgage secured by a piece of property.

FIXED-RATE MORTGAGE (FRM)
A mortgage which has a fixed rate of interest over the life of the loan.

FIXTURE
Any piece of personal property which becomes permanently affixed to a piece of real property.

FLASHING
The metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.

FLOOD INSURANCE
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.

FLOOR PLAN
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.

FLUE
The furnace exhaust pipe, usually going through the roof.

FLUSH VALVE
The valve between the toilet bowl and the tank.

FOOTING
The partially buried support for a vertical structural member such as a post.

FORECLOSURE
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.

FORFEITURE
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.

FOUNDATION
The solid structural element upon which a structure is built.

FRONTAGE
The segment of a property that runs along a point of access, such as a street or water front.

FUNCTIONAL OBSOLESCENCE
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.

GABLE ROOF
A steeply angled, triangular roof.

GALVANIZED PIPE
Iron pipe with a galvanized (zinc) coating.

GAMBREL ROOF
A ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.

GENERAL LIEN
A broad-based claim against several properties owned by a defaulting party.

GEORGIAN
A classic, English-style hose characterized by simple rectangular shape and multiple stories.

GFI
Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.

GINNIE MAE
A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.

GIRDER
A main supporting beam.

GOVERNMENT MORTGAGE
Any mortgage insured by a government agency, such as the FHA or VA.

GRADE
The slope of land around a building. Also ground level.

GRANTEE
Any person who is given ownership of a piece of property.

GRANTOR
Any person who gives away ownership of a piece of property.

GROSS AREA
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.

GROUTING
Material used around ceramic tile.

GUTTER
The trough around the edge of the roof that catches and diverts rain.

HALF-SECTION
320 acres.

HAZARD INSURANCE
Insurance covering damage to a property caused by hazards such as fire, wind and accident.

HEADER
The framing elements above an opening such as a window or door.

HEARTH
The floor of a fireplace or the area immediately in front of it.

HEIGHT ZONING
A municipal restriction on the maximum height of any building or other structure.

HIDDEN AMENITIES
Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.

HIGHEST AND BEST USE
The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.

HOME EQUITY CONVERSION MORTGAGE (HECM)
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM's typically do not have to be repaid until the borrower is no longer occupying the home.

HOME EQUITY LINE OF CREDIT
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.

HOME INSPECTION
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.

HOME INSPECTOR
A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER'S ASSOCIATION
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.

HOMEOWNER'S INSURANCE
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

HOMEOWNER'S WARRANTY
An insurance policy covering the repair of systems and appliances within the home for the coverage period.

HUD MEDIAN INCOME
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 STATEMENT
A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.

IMPROVED LAND
Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.

IMPROVEMENTS
Any item added to vacant land with the intent of increasing its value or usability.

IMPROVEMENT RATIO
The comparative value of an improved piece of land to its natural, unaltered state.

INCOME APPROACH
The process of estimating the value of property by considering the present value of a stream of income generated by the property.

INCOME PROPERTY
A piece of property whose highest and best use is the generation of income through rents or other sources.

INDEPENDENT APPRAISAL
An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.

INSPECTION
The examination of a piece of property, its buildings or other amenities.

INSURABLE TITLE
The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.

INTEREST RATE
A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.

INVESTMENT PROPERTY
Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.

JAMB
The side of a door frame.

JOINT TENANCY
A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.

JOISTS
Horizontal beams laid on edge to support flooring or a ceiling.

JUDGMENT
An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payee's property as collateral.

JUDICIAL FORECLOSURE
A type of foreclosure conducted as a civil suit in a court of law.

JUMBO LOAN
A mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called Non-Conforming Loans.

LALLY COLUMN
A concrete filled steel pipe used to support beams.

LATE CHARGE
An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.

LATENT DEFECTS
Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.

LEASE
A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

LEASEHOLD ESTATE
A type of property ''ownership'' where the buyer actually has a long-term lease on the property.

LEASE OPTION
A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LEGAL DESCRIPTION
The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.

LENDER
The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.

LIABILITIES
A person's outstanding debt obligations.

LIABILITY INSURANCE
Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.

LIEN
Any claim against a piece of property resulting from a debt or other obligation.

LIFE CAP
A limit on how far the interest rate can move for an Adjustable Rate Mortgage.

LIKE-KIND PROPERTY
Any property which is substantially similar to another property.

LINE OF CREDIT
An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LIQUID ASSET
Any asset which can be quickly converted into cash at little or no cost, or cash itself.

LOAN
Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

LOAN OFFICER
A person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION
How a lender refers to the process of writing new loans.

LOAN SERVICING
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

LOAN-TO-VALUE RATIO (LTV)
The comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-IN
An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

LOCK-IN PERIOD
The amount of time the lender has guaranteed an interest rate to a borrower.

MAJOR DEFICIENCY
A deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair.

MANUFACTURED HOUSING
Once known as ''mobile homes,'' manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.

MARGIN
The difference between the interest rate and the index on an adjustable rate mortgage.

MARGINAL LAND
Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

MASTER ASSOCIATION
An umbrella organization that is made up of multiple, smaller home owner's associations. Often found in very large developments or condominium projects.

MATURITY
The date on which the principal balance of a financial instrument becomes due and payable.

MERGED CREDIT REPORT
A credit report derived from data obtained from multiple credit agencies.

METES AND BOUNDS
A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.

METROPOLITAN AREA
The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.

MINERAL RIGHTS
The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.

MISREPRESENTATION
A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.

MORTGAGE
A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGE BANKER
A financial institution that provides primary and secondary mortgages to home buyers.

MORTGAGE BROKER
A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.

MORTGAGEE
The entity that lends money in a real estate transaction.

MORTGAGE INSURANCE
A policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

MORTGAGE INSURANCE PREMIUM (MIP)
A fee that is often included in mortgage payments that pays for mortgage insurance coverage.

MORTGAGE LIFE INSURANCE
A policy that fulfills the obligations of a mortgage when the policy holder dies.

MORTGAGOR
The entity that borrows money in a real estate transaction.

MULTI-FAMILY PROPERTIES
Any collection of buildings that are designed and built to support the habitation of more than four families.