Real Estate

A 1031 exchange is a real estate transaction in which the buyer and seller effectively swap properties in order to avoid paying capital gains tax on the sale.
An abstract of title is a history of a piece of property.
An adjustable rate mortgage (ARM) is a type of mortgage using a varying interest rate calculated by adding a premium to a specific benchmark rate. These loans are also called variable-rate mortgages or
/*-->*/ /*-->*/ Although assessed value   is a term used in conversations about property taxes, it is also an important factor in municipal bond issues. Because many municipalities receive a large
A balloon mortgage is a mortgage with a large payment made near or at the end of a loan term.
A buydown, also known as paying points, is a way to lower the interest rate on a mortgage.
In real estate, a capitalization rate is a measure of return on investment. The formula for capitalization rate is: Capitalization Rate = (Expected Income from Property – Fixed Costs – Variable Costs)/
The Case-Shiller Home Price Index refers to a set of indices released by Standard and Poor's that tracks changes in the value of residential real estate.
A cash out refinance (also called a cash out refinance loan or cash out refinance mortgage) is a type of mortgage loan that lets you to turn the equity you have in your home into cash, similar to a home
Closing costs are fees and expenses paid by both the buyer and the seller when a transaction is completed. Closing costs are common expenses in real estate transactions.
A coinsurance clause in regards to property insurance specifies a minimum percentage of a property's assessed cash or replacement value that it must be insured for (typically 80% or 90%). If the insured
Commercial real estate is any property that is exclusively used for business activity.
A condominium, often shortened to condo, is a multi-unit property where units are individually owned. Ownership typically includes an interest in common properties, like sidewalks, lobbies, and pools,
Sometimes referred to as a “self build loan,” a construction loan is a loan that is used to finance the construction of a new home or some other type of real estate project. The loan is made to the
A conventional loan is a mortgage that is not insured or guaranteed by a government agency. Also known as a conventional mortgage, conventional loans are usually fixed-rate loans. Conventional mortgages
A deed is an ownership document that entitles its holder to specific rights to a property based on a set of explicit conditions.
A deed of trust, most commonly used in real estate transactions, is an agreement between a borrower and a lender that the title to the property purchased by the loan will be held in trust by a neutral
A distressed sale occurs when a sale must be made under unfavorable conditions for the seller.   
A down payment is the initial payment a borrower puts toward a large purchase, and is usually a specified percentage of the total purchase price. Down payments are typically used for real estate, cars and
Earnest money is a good faith deposit, typically on a house purchase. It is not the same as a down payment.
An easement is a legal right to trespass.  
An easement in gross is a legal right to use another person's land for as long as the owner owns that land or the holder of the easement dies.
Eminent domain is a legal strategy that allows a federal or local government to seize private property for public use. The seizing authority must pay fair market value for the property seized.
Escrow is a financial arrangement whereby a third party holds funds in safekeeping pending the completion of a contract or other obligation.
In the real estate world, mortgage companies use escrow accounts to collect property taxes, homeowners insurance, private mortgage insurance and other payments that are required by the homeowner but are
Fannie Mae (OTC: FNMA) is the nickname for the Federal National Mortgage Association (FNMA). Established in 1938, Fannie Mae's purpose is to create a secondary market for the purchase and sale of
The Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") is a government-sponsored entity that buys certain types of mortgages from banks and uses them to collateralize mortgage-backed
A first-time homebuyer an individual or couple purchasing a home for the first time. The IRS also considers someone who has not owned a home in the past two years to be a first-time homebuyer.
The foreclosure process can take several months, if not years, and it does long-term damage to a person's credit report. It is important to note that foreclosure laws vary by state, and they affect the
Ginnie Mae is the nickname for the Government National Mortgage Association. Ginnie Mae guarantees the timely payment of interest and principal on certain mortgage-backed securities (MBS).  
A good faith estimate is a written estimate of the fees due at closing for a mortgage.
Good faith money is money a buyer uses to prove to a seller that he or she intends to complete a transaction. In real estate, good faith money is also called earnest money. It is not the same as a down
A habendum clause in a real estate contract transfers ownership of a piece of real estate with no restrictions. It generally pertains to oil and gas leases for pieces of property but can relate to any
High-ratio loans typically have higher interest rates because they are riskier. If the borrower defaults on the loan, the bank might not be able to sell the property for enough to repay the loan. The
Home equity equals the value of a house less the balance owed on the homeowner's mortgage.
A home equity line of credit (or HELOC) is a low-cost, flexible loan that lets you to turn your home's equity into cash whenever you need it, up to a certain amount. A HELOC uses your home as collateral
A home equity loan (HEL), also called a second mortgage, is a loan secured by the equity in a house. Equity equals the value of the house less the balance owed on the homeowner's mortgage.
A home loan (or mortgage) is a contract between a borrower and a lender that allows someone to borrow money to buy a house, apartment, condo, or other livable property. A home loan is typically paid back
House poor is used to describe a homeowner who spends too large a portion of his or her income on home ownership, leaving too little for discretionary spending.
In the real estate world, an impound is an account that mortgage companies use to collect property taxes, homeowners insurance, private mortgage insurance and other payments that are required by the
The term interest rate ceiling typically refers to the maximum lifetime interest rate charged on an adjustable rate mortgage according to the terms of a mortgage contract.
An interest-only adjustable-rate mortgage (interest-only ARM) is a mortgage in which the borrower only pays the interest on the loan for a set period.
An interest-only mortgage is a mortgage in which the borrower only pays the interest on the loan for a set period.
An investment property is a real estate investment purchased with the intent of earning a return on the money used to purchase the property. The return on the investment can be earned through rental
Investment real estate refers to any residential structure owned solely for the purpose of generating investment returns, either through rental income or through market value appreciation.
Joint tenancy is an arrangement in which two or more individuals occupy a property. Participating tenants each share equally in the rights and responsibilities related to the property.
A judicial foreclosure occurs when a court allows a lender to seize and sell a borrower's collateral when the borrower has failed to repay the lender. The term is most often associated with real estate.  
A jumbo loan, also called a jumbo mortgage, is a mortgage that exceeds the maximum amount that will be guaranteed by a government-sponsored entity like Fannie Mae.
Junk fees appear in mortgage closing documents and usually benefit the loan originator or the lender.
Just compensation is the fair market value that a federal or local government must pay to a property owner in order to seize that private property for public use.
Key money is money paid to a landlord or property owner in order to reserve a spot as a tenant on the property.
A land contract is a contract in which the buyer of a property agrees to pay the seller in scheduled installments.
A land flip is an act of fraud whereby a group of people buy a piece of land and then profits by continually reselling to each other for more than its actual value.
A land lease option is a section of a lease contract that allows a renter to lengthen his or her use of a piece of land beyond the term specified in the contract.
Land rehabilitation is the practice of returning a piece of land to the natural state it was in prior to human interference or damage from natural disasters.
A land trust is a trust comprised exclusively of real estate assets.
Land value is the overall value of a piece of property.
Landlocked is a term describing a piece of property that has no direct access.
A landlord is an individual who owns real estate that he or she leases to renters.
A landominium is a housing community in which residents own the housing units as well as the land on which they are built.
Leasehold improvements make assets more useable and, in many cases, more marketable. Sometimes, landlords will pay for leasehold improvements in order to entice a tenant to rent a space for a long period
In the tax world, a main home is where a taxpayer has lived for most of the tax year or is the only home the taxpayer owns.
A maintenance bond is a surety bond for construction projects.
The idea behind Making Home Affordable is to stabilize the economy. A major contributor to the financial crisis of 2008 was a large number of defaults on home loans, which created cash crises for lenders
This term is a play on the word "McDonalds," which is a global fast-food restaurant chain whose food is usually so consistent that an item from one restaurant is indistinguishable from the same item made
Minimum lease payments are the lowest total amount that a renter can expect to pay during the term of a lease.
Homeownership is a cornerstone of the American Dream. A home is a valuable asset for most people, and mortgages (or home loans) make buying one possible for many Americans.
A mortgage accelerator is a type of checking account that allows a borrower to repay a mortgage more quickly using the balance of monthly paychecks as opposed to recurring monthly payments.
Mortgage allocations refer to the specific mortgage information given to an MBS buyer by an MBS seller.
A mortgage application is a document that a prospective property buyer submits to a lender to secure a mortgage. The lender must approve the application before any money is lent.
A mortgage banker is a person or entity who lends mortgages.
A mortgage broker is an agent who connects property buyers with mortgage lenders.
A mortgage equity withdrawal (MEW) is a loan that uses the value of a mortgaged property as collateral.
Mortgage excess servicing is the percentage remainder of the annual yield on a mortgage-backed security (MBS) once it has been allocated between the holder, the servicer, and the underwriter.
Mortgage fallout is the percentage of an originator's mortgages that fail to close.
Mortgage interest is the compensation a borrower pays a lender for money used to purchase property.
A mortgage originator is an individual or institution that collaborates with the borrower to complete a mortgage transaction.
Mortgage points (also called interest rate points or discount points) are fees you can pay to a lender at closing to lower your mortgage's interest rate -- or annual percentage rate (APR). The cost of
A mortgage pool is a group of mortgages in a mortgage-backed security (MBS).
A mortgage rate is the rate of interest a borrower pays on his or her mortgage.
A mortgage rate lock is the term in a mortgage contract that stipulates the rate the borrower will pay for the entire duration of the mortgage.
A mortgage rate lock deposit is a sum of money that a borrower must pay the lender to lock in a specific interest rate until a borrower's mortgage is approved and given out.
A mortgage rate lock float down is a provision that allows a borrower to obtain a lower rate if interest rates decline during the process of applying for a mortgage.
Mortgage real estate investment trusts (mREITs) invest in residential mortgages that have been bundled together into securities called mortgage-backed securities (MBS)
Mortgage servicing rights (MSR) is an arrangement by which a third party promises to collect and disseminate mortgage payments in exchange for a fee.
A mortgage short sale is the sale of a mortgaged property for less than the remaining value of the mortgage itself.
The National Association of REALTORS (NAR) is a trade association for real estate professionals.
Also called a yield-spread premium, negative points are rebates lenders pay to mortgage brokers or borrowers for mortgages. Negative points are expressed as a percentage of the principal.
Net payoff is the profit or loss on the sale of a good or service after all the costs of producing and selling that good or service have been subtracted.
New Home Sales is an economic indicator released monthly by the United States Census Bureau. The data reflect the number of newly constructed homes purchased in the previous month.  
A judicial foreclosure occurs when a court allows a lender to seize and sell a borrower's collateral when the borrower has failed to repay the lender. The term is most often associated with real estate.
Occupancy rate is the ratio of rental units rented versus the total number in the building, city, state, etc.
Odd days interest refers to interest earned on loans that close on any day other than the standard day the lender requires interest and principal payments.
Owner financing is when a seller, usually of a property or a business, provides financing for the purchase directly to the buyer under a for sale by owner situation. Owner financing is also referred to as
Private mortgage insurance (PMI), also called mortgage insurance, is what borrowers must pay on each mortgage payment if they didn't make a 20 percent down payment toward their home loan. The insurance
A price level adjusted mortgage (PLAM) is a mortgage with a fixed interest rate but an adjustable principal balance.
A property lien is a lender's claim against a piece of real estate that may be legally sold should the borrower fail to repay a loan.
Property tax is a tax on property -- usually real estate -- as determined by an assessor.
A qualified acquisition cost refers to the cost of buying, building, or rebuilding a home. Investors can often withdraw qualified acquisition costs from their IRAs without paying early withdrawal
Quiet title is the name of a legal action intended to ensure that the owner of a property is in fact the real owner and that the property has no other ownership claims on it. To do this is known as
Quiet title action is the name of a legal action intended to ensure that the owner of a property is in fact the real owner and that the property has no other ownership claims on it. To do this is called
A quitclaim deed is a document that transfers interest in a property to another person.
A rate and term refinance occurs when a borrower replaces one mortgage with another mortgage that has a different maturity and interest rate.
A real asset is a tangible, touchable asset that has value.
Real estate refers to land, as well as any physical property or improvements affixed to the land, including houses, buildings, landscaping, fencing, wells, etc.
A real estate agent, working on behalf of a licensed real estate broker, is a licensed professional who works on behalf of the buyer and seller of real estate during a sales transaction.
A real estate investment trust (REIT) is a closed-end investment company that owns assets related to real estate such as buildings, land and real estate securities. REITs sell on the major stock market
Real estate owned (REO) is a term describing real estate owned by lenders, usually because the lender has foreclosed on the property.
A real estate short sale is the sale of property that is worth less than what is owed on it.
Real property is anything that is attached to land.
A realtor is a professional designation for a real estate broker who has membership in the National Association of Realtors (or NAR).
A recapture occurs when a person or entity takes back an asset from a buyer under certain conditions.
A recapture clause is language in a contract that allows a person or entity to take back an asset under certain conditions.
A recording fee is the cost of making a public record of a real estate transaction.
A reverse mortgage is an arrangement whereby a homeowner borrows against his or her home equity and receives regular payments from the lender until the total payments reach a predetermined limit.
A short sale is a three-step trading strategy that seeks to capitalize on an anticipated decline in the price of a security. 
Short selling is a trading strategy that seeks to capitalize on an anticipated decline in the price of a security. Essentially, a short seller is trying to sell high and buy low.
A short squeeze is a situation in which a stock's price increase triggers a rush of buying activity among short sellers.  Short sellers must buy stock to close out their short positions and cut their
A tax lien certificate is written proof that a taxing authority has placed a lien on a piece of property for unpaid property taxes.
A tax service fee is paid by mortgage borrowers to mortgage lenders to ensure that a mortgaged property's property taxes are paid on time.
Tenancy at will is a legal term describing an arrangement whereby a tenant occupies a piece of property with the permission of the property owner.
Tenants in common (TIC) describes an ownership status that applies when a property is severally owned by two parties.
The Troubled Asset Relief Program (TARP) is a U.S. government program created in an attempt to mitigate the fallout from the subprime mortgage crisis of 2007-2008. 
Vacancy rate is the ratio of rental units not rented versus the total number in the building, city, state, etc.
A viager is a French method of real estate sale whereby the buyer makes a down payment and agrees to make a series of payments for the rest of the seller's life.
Warehouse lending is credit provided to a mortgage lender to fund mortgages until the lender sells them in the secondary market.
Yield maintenance is a kind of prepayment fee that borrowers pay to banks to reimburse them for the loss of interest resulting from the prepayment of a loan. 
Also known as negative points, yield-spread premiums are rebates lenders pay to mortgage brokers or borrowers. Yield-spread premiums are a percentage of the principal.
A zero-lot-line house is a house whose structure goes right up the edge of the property line.