deed
The legal document conveying title to a property.
deed-in-lieu
A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure. Also called a "voluntary conveyance."
deed of release
A document which dismisses a lien or other claim on a property.
deed of trust
The document used in some states instead of a mortgage. Title is conveyed to a trustee rather than to the borrower.
default
Failure to abide by the terms of a mortgage loan agreement. May result in the lender taking legal action to possess or foreclose the mortgaged property.
delinquency
Failure to make mortgage payments when mortgage payments are due to the lender.
depreciation
The decrease in the value of an asset allowed when computing property value for tax purposes. It can also be a loss in the appraised value of a property due to physical deterioration. This latter type of depreciation is curable when it can be remedied by repair or an addition to the property, and incurable when there is no easy or ecomomic remedy.
discount points
An added loan fee charged by a lender to make the yield on a lower-than-market-interest VA or FHA loan competitive with higher-interest conventional loans. One discount point is equal to 1 percent of the loan amount.
distressed property
A mortgaged property which has been foreclosed on.
down payment
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
due-on-sale provision
A provision in a mortgage that allows the mortgage lender to demand repayment of the entire balance in full if the borrower sells the property that serves as security for the mortgage.
earnest money deposit
A deposit made by a potential home purchaser to demonstrate that he is serious about purchasing the property.
easement
A right-of-way giving persons other than the owner of the property access to or through a certain property.
effective age
An appraiser’s estimate of the physical condition of a building. The actual age of a building may differ.
eminent domain
The right of government to take private property for public use upon payment of its fair market value to the owner.
encroachment
Construction or imposition of a structure onto the property of another.
encumbrance
A legal right or interest in land that affects or limits complete ownership and control over property. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes or restrictive convenants. An encumbrance does not necessarily prevent transfer of the property to another, but may diminish its value. A title search will usually reveal the existence of such encumbrances, and it is up to the buyer to determine whether he wants to purchase the property with the encumbrance.
Equal Credit Opportunity Act (ECOA)
Federal law that prohibits a lender or other creditor from refusing to grant credit based on the applicant's sex, marital status, race, religion, national origin, or age, or because the applicant receives public assistance.
equity
A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens.
escrow
An independent third party, such as an Escrow Officer, who acts as the agent for buyer and seller, or for borrower and lender, carrying out instructions of both and disbursing documents and funds. Escrow closes and the transfer of property or document is completed upon fulfillment of certain conditions specified in the written instructions, whereupon the necessary deeds and other instruments are recorded.
escrow account
An account that a lender or mortgage servicer establishes to hold funds for the payment of expenses such as homeowners insurance and property taxes. Also known as an impound account.
escrow disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.
estate
The ownership interest of an individual in real property.
eviction
The lawful removal of an occupant from real property. Usually due to non-payment or mortgage debt or rent.
examination of title
The report on the title of a property from the public records or an abstract of the title. Conducted by an attorney in New Hampshire but may differ in other states.
executor
A person named in a will to administer an estate. A court will appoint an administrator if no executor is specifically named in the will.
Fair Credit Reporting Act
A federal law passed in 1971 that regulates the activity of credit bureaus. It is designed to prevent inaccurate or obsolete information from staying in a consumer's credit file and requires credit bureaus to have reasonable procedures for gathering, maintaining and disseminating credit information. The act also requires credit bureaus to show a consumer their credit file if the consumer presents proper identification, although the bureau reserves the right to charge a fee for doing so. New laws are changing this and mandating that credit bureaus will have to provide a certain number of credit reports for free each year.
fair market value
The value of an item as established by a consideration of how much an independent buyer would pay to an independent seller in a completely free transaction for the item.
Fannie Mae (FNMA)
Fannie Mae purchases home mortgages, thus serving as a source of funds for mortgage lenders. It is a privately owned corporation whose shares are traded on the New York Stock Exchange, but it is subject to the strict supervision of the secretary of the U.S. Department of Housing and Urban Development (HUD).
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)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing. top)
fee simple
The greatest and best possible interest a person can have in real estate.
fee simple estate
An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.
FHA mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a government loan.
firm commitment
A lender’s agreement to make a loan to a specific borrower on a specific property.
first mortgage
A mortgage that is the primary lien against a property.
fixed-rate mortgage
A mortgage in which the interest rate remains the same throughout the entire term of the loan.
fixture
Personal property that becomes real property when attached in a permanent manner to real estate.
flood insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.
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.
foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
forefeiture
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.
401(k)/403(b)
An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations.
401(k)/403(b) loan
Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans. Loans against 401K plans are an acceptable source of down payment for most types of loans.
