ReverseMortgagesEndMonthlyPayments.com Real Estate Glossary Continues

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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

NATIONAL ASSOCIATION OF MASTER APPRAISERS (NAMA)
A non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal.

NATIONAL SOCIETY OF REAL ESTATE APPRAISERS
An organization founded in 1956 which promotes standards of professionalism in its members.

NATURAL VACANCY RATE
The percentage of vacant properties in a given area that is the result of natural turnover and market forces.

NEGATIVE AMORTIZATION
When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.

NEIGHBORHOOD LIFE-CYCLE
The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.

NEIGHBORHOOD
A subsection of a municipality that has been designated by a developer, economic forces or physical formations.

NET LEASABLE AREA
The space in a development, outside of the common areas, that can be rented to tenants.

NEW ENGLAND COLONIAL
An architectural style dating from early American history typified by a two-story building with clapboard siding.

NO-COST LOAN
Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

NO-POINT LOAN
A loan with no "points". The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.

NON-CONFORMING USE
The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.

NONLIQUID ASSET
Any asset which can not be quickly converted into cash at little or no cost.

NOTE
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

NOTE RATE
The interest rate stated on a mortgage note.

NOTICE OF DEFAULT
Formal written notice from a lender to a borrower that default has occurred.

OBSOLESCENCE
The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.

OCCUPANCY
A physical presence within and control of a property.

OCCUPANCY RATE
The percentage of properties in a given area that are occupied.

OCTOPUS RECEPTACLE
An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.

OFF-SITE IMPROVEMENTS
Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.

OFF-STREET PARKING
Designated parking spaces associated with a particular building or other structure which are not located on public streets.

OLD TERMITE ACTIVITY
Where no termites are currently active, but indications of past activity can be seen.

ON-SITE IMPROVEMENTS
Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.

OPEN SPACE
Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.

OPEN SPLICE
An uncovered electrical connection.

ORIGINAL EQUITY
The amount of cash a home buyer initially invests in the home.

ORIGINAL PRINCIPAL BALANCE
The total amount of principal owed on a mortgage loan at the time of closing.

ORIGINATION FEE
Refers to the total number of points paid by a borrower at closing.

OWNER FINANCING
A transaction where the property owner provides all or part of the financing.

OWNER OCCUPIED
The state of property wherein the owner occupies at least some portion of the property.

PARGING
The cement coat applied to block foundations.

PARTIAL INTEREST
A shared ownership in a piece of property. May be divided among two or more parties.

PARTIAL PAYMENT
A payment of less than the regular monthly amount. Usually, a lender will not accept partial payments.

PERIODIC PAYMENT CAP
The limit on how much regular monthly payments on an Adjustable Rate Mortgage can change during one adjustment period.

PERIODIC RATE CAP
The limit on how much the interest rate on an Adjustable Rate Mortgage can change during any one adjustment period.

PERSONAL PROPERTY
Owned items which are not permanently affixed to the land.

PERSONAL RESIDENCE
The primary domicile of a person or family.

PLANNED UNIT DEVELOPMENT (PUD)
A coordinated, real estate development where common areas are shared and maintained by an owner's association or other entity.

PLAT
A plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.

POINT
A percentage of a mortgage amount (one point = 1 percent).

PRE-APPROVAL
The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.

PREFABRICATED
Any building or portion thereof which is manufactured and assembled off site, then erected on a property.

PREPAYMENT
Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.

PREPAYMENT PENALTY
A fee that may be charged to a borrower who pays off a loan before it is due.

PRE-QUALIFICATION
Less formal that pre-approval, pre-qualification usually means a written statement from a loan officer indicating his or her opinion that the borrower will be able to become approved for a mortgage loan.

PRIME RATE
The interest rate that banks and other lending institutions charge other banks or preferred customers.

PRINCIPAL
The amount owed on a mortgage which does not include interest or other fees.

PRINCIPAL BALANCE
The outstanding balance of principal on a mortgage. Does not included interest due.

PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI)
The most common constituents of a monthly mortgage payment.

PRIVATE MORTGAGE INSURANCE (PMI)
A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less that 20%.

PROPERTY
Any item which is owned or possessed.

PURCHASE AGREEMENT
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

QUADRAPLEX
Any building designed to accommodate four families.

QUALIFYING RATIOS
Two ratios used in determining credit worthiness for a mortgage loan. One is the ratio of a borrower's monthly housing costs to monthly income. The other is a ratio of all monthly debt to monthly income.

QUITCLAIM DEED
A legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.

RAFTER
A structural element of the roof, sloping from the peak to the outer walls.

RANCH HOUSE
An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.

RATE LOCK
A guarantee from a lender of a specific interest rate for a period of time.

RAW LAND
Any land which has not been developed.

REAL ESTATE
A piece of land and any improvements or fixtures located on that land.

REAL ESTATE AGENT
A licensed professional who facilitates the buying and selling of real estate.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)
A federal law requiring lenders to give full disclosure of closing costs to borrowers.

REAL PROPERTY
Land, improvements and appurtenances, and the interest and benefits thereof.

REALTOR®
A real estate agent or broker who is a member of the NATIONAL ASSOCIATION of REALTORS®.

RECEPTACLE
An electrical outlet to plug into.

RECORDER
A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.

RECORDING
The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.

REFINANCE TRANSACTION
A new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.

REGISTER
Where air from a furnace or air conditioning system enters the room.

RELOCATION SERVICE
Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.

REMAINING BALANCE
The amount of principal, interest and other costs that has not yet been repaid.

REMAINING TERM
The amount of time remaining on the original amortization schedule.

REMODEL
An activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.

REPAYMENT PLAN
A plan to repay delinquent payments, agreed upon between a lender and borrower, in an effort to avoid foreclosure.

REPLACEMENT RESERVE FUND
An account, or fund, setup for the replacement of short life items, such as carpeting, in the common areas of a cooperative property.

RESIDENTIAL PROPERTY
A piece of property whose highest and best use is the maintenance of a residence.

REVOLVING DEBT
A type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.

RIDGE BOARD
The structural member of a roof where the rafters join at the top.

RIGHT OF FIRST REFUSAL
An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.

ROOF PITCH
The degree of slope in a roof.

RURAL
An area outside of an established urban area or metropolitan district.

SALE PRICE
The actual price a property sells for, exclusive of any special financing concessions.

SALES COMPARISON APPROACH
An appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.

SCARCITY
An economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.

SECOND MORTGAGE
A loan secured by the equity in a home, when a primary mortgage already exists.

SECONDARY MORTGAGE MARKET
An economic marketplace where mortgage bankers buy and sell existing mortgages.

SECURED LOAN
A loan that is backed by collateral. In the case of a mortgage loan, the collateral is the house.

SECURITY
The property used as collateral for a loan.

SEMIDETACHED HOUSING
Two residences which share a common wall.

SERVICER
A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.

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.

SHEATHING
The covering on outside walls beneath the siding or exterior finish such as stucco.

SHEETROCK
Also called drywall, the gypsum board commonly used on interior walls.

SILL PLATE
The lumber used around the foundation to support exterior wall framing.

SILL COCK
Garden hose pipe connection.

SINGLE-FAMILY PROPERTY
A property designed and built to support the habitation of one family.

SOFFIT
The underside of a cornice at the eaves.

STUCCO
A textured plaster exterior (and occasionally interior) wall finish.

STUD
A vertical framing piece in a wall, generally 2x4 lumber in interior walls.

SUBDIVISION
A residential development that is created from a piece of land which has been subdivided into individual lots.

SUBJECT PROPERTY
A term which indicates a property which is being appraised.

SUMP
A basin into which water drains and from which the water is pumped out.

SURVEY
A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.

SWEAT EQUITY
The method whereby a home owner develops equity in a property, either during the purchase or throughout its life, by personally constructing improvements rather than paying to have them built.

TAX-EXEMPT PROPERTY
Any property which is not taxed.

TENANCY
The right to occupy a building or unit.

TENANCY IN COMMON
A form of holding title, whereby there are two or more people on title to a property, ownership does not pass on to the others upon the death of one individual.

THIRD PARTY ORIGINATION
When a lender uses a third party to originate and package loans for sale to the secondary market (Fannie Mae, Freddie Mac).

TITLE
A specific document which serves as proof of ownership.

TITLE COMPANY
An organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.

TITLE INSURANCE
A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.

TITLE SEARCH
The process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.

TRANSFER OF OWNERSHIP
Any means by which the ownership of a property changes hands.

TRANSFER OF TAX
Taxes payable when title passes from one owner to another.

TRAP
A bend in water pipe.

TRUSTEE
A fiduciary that holds or controls property for the benefit of another.

TRUTH IN LENDING
A federal law requiring full disclosure by lenders to borrowers of all terms, conditions and costs of a mortgage.

TUDOR
A style of architecture typified by exposed stone, wood and brick construction. Similar in style to English manor homes.

UNDER IMPROVED LAND
A piece of land which has been improved, but not to the full extent of its potential.

UNENCUMBERED PROPERTY
Any property which has no outstanding claims or liens against it.

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP)
Developed in 1986 by the Ad Hoc Committee on Uniform Standards and copyrighted in 1987 by The Appraisal Foundation, USPAP forms the guidelines followed by every licensed and certified real estate appraiser in the United States. The purpose of these Standards is to establish requirements for professional appraisal practice, which includes appraisal, appraisal review, and appraisal consulting. The intent of these Standards is to promote and maintain a high level of public trust in professional appraisal practice.

USEFUL LIFE
The span of time over which a property can be used or can provide benefits to its owner.

VACANCY RATE
The current percentage of vacant properties in a given area, regardless of why they are vacant.

VA MORTGAGE
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).

VARIANCE
An exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.

VENT PIPE
A pipe allowing gas to escape.

VESTED
Having the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.

VETERANS AFFAIRS, DEPARTMENT OF (VA)
The successor to the Veteran's Administration, this government agency is responsible for ensuring the rights and welfare of our nation's veterans and their dependents. Among other duties, the VA insures home loans made to veterans.

VOLTAGE
An expression of electric force, or pressure. One volt being the force needed to move one amp against one ohm resistance.

WALK-THROUGH INSPECTION
A process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.

WARRANTY
An affidavit given to stipulate the condition of a property. The person giving the warranty assumes liability if the condition turns out to be untrue.

WATT
An expression of amount of electrical power. Volt times amps equals watts.

WEAR AND TEAR
A term used to indicate the normal damage inflicted on a property through every-day use.

WEATHER STRIPPING
Material used around windows and doors to prevent drafts.

WEEP HOLE
Drainage hole that allows water to escape.

ZERO LOT LINE
A municipal zoning category wherein a building or other fixture may abut the property line.

ZONE
A specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.

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