Real Estate Glossary
Adjustable Rate Mortgage (ARM)
Annual Percentage Rate (APR)
Annual percentage rate: the annual rate of interest; the total interest to be paid in a year divided by the balance due.
An offer on a home under contract that becomes Active if the primary contract falls through.
A clause in a purchase contract outlining conditions that must be fulfilled before the contract is executed. Both buyer and/or seller may include contingencies in a contract, but both parties must accept the contingency.
A right held by one property owner to make use of the land of another for a limited purpose, as a right of passage.
A contract, deed, bond, or other written agreement deposited with a third person, by whom it is to be delivered to the guarantee or promise on the fulfillment of some condition.
Fannie Mae (FNMA)
Federal Housing Authority
A home mortgage for which equal monthly payments of interest and principal are paid over the life of the loan, usually for a term of 30 years.
Good Faith Estimate (GFE)
An interest rate set by the federal government that determines the cost to borrow money.
The legal claim of one person upon the property of another person to secure the payment of a debt or the satisfaction of an obligation.
The risk assessment ratio used by lenders. To calculate the LTV, divide the mortgage by the appraised value.
Multiple Listing Service (MLS)
The amount received by the seller at closing after all other costs have been deducted.
An event hosted by a listing agent to showcase a home to potential buyers.
A fee charged by a lender for evaluating and processing a loan application, usually a percentage of the face value of the loan.
Principal, interest, taxes, and insurance.
A letter indicating that a lender is willing to loan a specific amount of money for a home purchase: pre-approval does not guarantee a loan.
A deed that transfers property rights without any validation of ownership; typically used between spouses and family members.
A commitment by a lender to a borrower guaranteeing a specific interest rate over a period of time at a set cost.
Real estate owned (REO) property
A repossessed property owned by a lender after an unsuccessful sale at auction.
A document completed by the seller disclosing the property’s history and defects.
In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership.
Insurance protecting the owner or mortgagee of real estate from lawsuits or claims arising from a defective title.
A mortgage loan for veterans and their spouses, made by private lenders and guaranteed by the U.S. government.