The Most Comprehensive Mortgage Glossary

the most complete and up-to-date glossary of Mortgage, Real Estate, and Finance Terms Available.

At BuildBuyRefi.com, we're dedicated to empowering your financial journey by providing the most complete and up-to-date glossary of mortgage, real estate, and finance terms available. Our goal is to demystify the complex language of the industry, ensuring you have the knowledge needed to make informed decisions about your loans and investments.

Whether you're a first-time homebuyer or a seasoned investor, our glossary serves as your go-to resource for understanding the terminology used throughout the mortgage process. From common slang to intricate financial jargon, we've compiled a comprehensive collection of terms to guide you through every step of your homeownership journey.

Be sure to check back regularly, as we're constantly updating our glossary with new terms and industry insights. Explore our glossary today to stay informed about the latest terminology and industry updates and gain the confidence you need to navigate the world of real estate and finance with ease.

Numerical and Symbolic Mortgage Terms

3-D Printed Home

A dwelling constructed using 3-dimensional printing technology, where layers of material are deposited to build up the structure layer by layer. These homes can be built more quickly and with less waste compared to traditional construction methods, potentially offering cost savings and design flexibility.

10 Year Mortgage

A type of mortgage where you pay back the money you borrowed to buy your home over 10 years.

10-Year Bond

This is a type of investment where you lend money to the government or a company for 10 years, and they promise to pay you back with interest.

100 Year Mortgage

A mortgage plan that stretches the repayment of the loan over 100 years, making it a very long-term loan.

1031 Exchange

A way for investors to delay paying taxes on profits from selling a property by using those profits to buy another similar property.

1040 Tax Return

The form used by individuals in the U.S. to file their yearly taxes, showing how much money they made and taxes they owe.

1099

A set of forms used to report money earned from sources other than a regular job, like freelance work or investments.

15 Year Mortgage

A mortgage plan where you pay back the loan for your house over 15 years.

2-1 Buy Down

A mortgage that starts with a low interest rate for the first two years and then adjusts to a higher rate annually after that.

20 Year Mortgage

This is a mortgage where the loan is paid back over 20 years, usually with fixed monthly payments.

203k Limited

A specific FHA loan that's used for making minor home improvements and repairs. (Read more about our FHA 203k Limited Renovation Loan and other rehab programs here.)

203k Standard

An FHA loan for homes that need significant repairs or renovations, allowing the borrower to finance the purchase and the renovation costs. (Read more details on our FHA 203k Standard Renovation Home Loan here.)

25 Year Mortgage

A mortgage plan with a repayment period of 25 years, often resulting in lower monthly payments compared to shorter-term loans.

2nd Mortgage

A loan taken out on a property that already has a mortgage, using the home's equity as collateral.

30 Year Mortgage

A common type of mortgage where the loan is repaid over 30 years, offering lower monthly payments.

30-Year Bond

A long-term investment where you lend money to the government or a corporation, and they pay you back with interest in 30 years.

40 Year Mortgage

A mortgage option where the loan is spread out over 40 years, making monthly payments smaller but the total interest paid higher.

Mortgage Terms Starting With A - C

Abatement

A decrease or reduction in the amount of taxes owed.

Absorption Rate

How quickly homes are sold in a particular area within a certain time frame.

Abstract of Title

A document summarizing the history and ownership details of a piece of land.

Acceleration Clause

A loan agreement term that lets the lender ask for the whole loan balance if the borrower misses payments or breaks the contract.

Acceleration

The right of the lender to demand full repayment of the mortgage early if the borrower breaks the loan agreement.

Access Right

The legal right of a property owner to enter and leave their land.

Accretion

The process of land increasing in size naturally, like when a river adds sediment to a property's edge.

Acquisition Cost

The total cost to buy property, including the purchase price, closing costs, and any expenses to make the property ready for use.

Acre

A measure of land area equal to 43,560 square feet, used in the U.S.

Action to Quiet Title

A legal action to settle disputes or clear doubts about who owns a piece of property.

Active Listing

A property that's currently for sale on the market.

Ad Valorem Tax

Property tax that's based on the assessed value of real estate or personal property.

Add-on Interest

Interest calculated at the start of a loan and added onto the principal amount, meaning you pay interest on interest.

Addendum

An extra document or information added to the main contract.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that can change over time, based on a specific financial index.

Adjustment Frequency

How often the interest rate of an adjustable-rate mortgage changes.

ADU (Accessory Dwelling Unit)

A second, smaller dwelling on the same grounds (or attached to) your house, like a guest house or apartment.

Adverse Possession

When someone lives on or uses someone else's land as if it's their own, under certain conditions, they might legally claim it over time.

Affidavit of Title

A legal document where the seller of a property swears that they own the property and there are no legal problems with the sale.

Affordable Housing

Homes that are priced so that people earning a median income can afford them.

Agency Disclosure

Informing buyers or sellers about who the real estate agent is working for in a transaction.

Agency

The relationship where a real estate agent is authorized to act on behalf of their client, either a buyer or seller.

Agent

Someone who is authorized to act on behalf of another person in business or legal matters.

Agreement of Sale

A contract where the buyer agrees to buy, and the seller agrees to sell a property under certain conditions.

AIA Documents

Standard contracts and forms created by the American Institute of Architects for managing and documenting construction projects.

Air Rights

The right to use, control, or build in the air space above a piece of land.

Alienation Clause

A mortgage term that requires the borrower to pay off the loan in full if the property is sold or transferred.

All-Inclusive Rate (AIR)

The interest rate on a mortgage that includes all costs of borrowing, shown as an annual percentage.

Alt-A

Mortgages for borrowers with better credit histories than subprime loan borrowers, but the loan doesn't meet prime loan standards.

Amenities

Features and facilities that enhance the living environment or value of a property, like parks or swimming pools.

Amortization Schedule

A table that shows each loan payment amount split into interest and principal and shows the remaining balance after each payment.

Amortization Term

The length of time it takes to pay off a loan in full with regular payments.

Amortization

The process of spreading out a loan into a series of fixed payments over time, covering both principal and interest.

Anchor Tenant

A large or popular store in a shopping center that draws many shoppers, helping smaller stores in the center get more business.

Annual Cap

A limit on how much the interest rate or mortgage payments can increase in one year for an adjustable-rate mortgage.

Appliance Upgrades

Replacing old appliances with new, more energy-efficient models to improve a home's value and functionality.

Appraisal Fee

The cost charged by an appraiser to estimate the value of a property.

Appraisal

An expert's estimate of what a property is worth, based on similar properties that have sold recently.

Appraised Value

The value of a property determined by a professional appraiser, looking at recent sales of similar homes.

Appreciation

When the value of a property goes up over time.

Appurtenance

A right or benefit that comes with owning a property, like a pathway across another person's land.

APR (Annual Percentage Rate)

The yearly cost of a loan, including interest and other fees, shown as a percentage.

Arbitration Clause

An agreement in a contract to settle disputes through arbitration instead of going to court.

Arbitration

Resolving disagreements by using an impartial person or group outside of court.

Arms Length Transaction

A deal where the buyer and seller act independently without any pressure from the other, ensuring a fair price.

As-Built Drawings

Blueprints that show exactly how a building was constructed, including any changes made during the build.

As-Is Condition

Buying a property in its current state, including any problems it might have.

Assessed Value

The value set by the government for a property, used to calculate property taxes.

Assessment

The process of figuring out a property's value for tax purposes.

Asset Verification

Proving what assets you have, like money in the bank or property, often needed when applying for a loan.

Asset-Based Lending

Getting a loan that's backed by something valuable you own, like a piece of equipment or inventory.

Assets

Things you own that have value, such as money, property, or stocks.

Assignee

Someone who has been given the rights of a contract from someone else.

Assignment of Mortgage

A legal document that shows a mortgage has been transferred from one person to another.

Assignment

The act of transferring a property mortgage from one person to another.

Assumable Loan

A mortgage that a new buyer can take over from the seller, keeping the same terms.

Assumption Fee

A fee paid to a lender when taking over an existing mortgage.

Attachment

Legally taking someone's property to pay off a debt they owe.

Attorney-in-Fact

A person given the legal right to act on someone else's behalf for business matters.

Attractive Nuisance

Something on a property that could be dangerous but might attract children, like an unfenced pool.

Automated Underwriting

Using computer programs to quickly decide if a loan should be approved based on the borrower's information.

Back Title Letter

A letter from a title insurance company to a lawyer or another party, showing the status of a property's title.

Back Up Offer

An offer on a property that's already under contract, in case the first deal doesn't go through.

Backup Contract

A secondary agreement that becomes valid if the primary agreement falls apart.

BAH (Basic Allowance for Housing)

A military allowance given to service members to help cover housing costs when on-base housing isn't available.

Balanced Bid

A construction bid where the total is evenly spread out over different parts of the work.

Balanced Market

A housing market where there is an equal number of buyers and sellers, leading to stable prices.

Balloon Loan

A loan with low monthly payments and a large final payment at the end of the loan term.

Balloon Mortgage

A mortgage with regular payments for a set period and then one large payment for the remaining balance at the end.

Balloon Payment

The final large payment due at the end of a balloon loan term.

Bankruptcy Discharge

Being legally freed from the obligation to pay certain debts after going through bankruptcy.

Bankruptcy

A legal process for people or businesses that can't pay their debts to get a fresh start.

BAQ (Basic Allowance for Quarters)

An old term for the housing allowance given to military personnel, now known as BAH.

Barndominium

A barn converted into a living space, often with areas for animals or a workshop.

Base Loan Amount

The amount borrowed for a mortgage, not including any additional fees like upfront mortgage insurance.

Base Rent

The minimum rent amount in a lease that can increase based on sales or other factors.

Basement Renovation

Updating or finishing a basement to add living space or improve its use.

Basis Point

A way to measure changes in interest rates, with one basis point equal to 0.01%.

Bearer

The person or entity entitled to receive payment on a financial document.

Before and After Method

A way to figure out how much a property's value has changed after improvements have been made.

Bench Mark

A fixed point used as a reference for measuring elevations on a property.

Beneficial Interest

Having the right to enjoy benefits from property that's in someone else's name.

Beneficiary

The person or entity chosen to receive benefits from a trust, estate, or deed of trust.

Bequeath

To leave personal property to someone in a will.

Berm

A raised ridge of earth often used for landscaping, to block sound, hide unsightly views, or manage water flow.

Bid Bond

A bond given with a bid as a guarantee that the bidder will follow through with the contract and provide the needed performance bonds.

Bid

An offer to do a job for a specific price, often used in construction.

Biennial

Something that happens every two years.

Bill of Sale

A document that transfers ownership of goods or personal property from one person to another.

Binder

A temporary insurance agreement that provides coverage until the final insurance policy is issued.

Biweekly Mortgage

A mortgage plan where payments are made every two weeks, reducing the amount of interest paid over time.

Blanket Authorization

Permission from a government body that covers multiple transactions, not just one.

Blanket Insurance Policy

Insurance that covers more than one property or item.

Blanket Mortgage

A single mortgage that covers multiple properties owned by the same borrower.

Blended Rate

A new loan's interest rate that combines an old loan's lower rate with the higher rate of new loans.

Blind Ad

An advertisement for real estate that doesn't include the advertiser's contact information or identity.

Blockbusting

An illegal practice where sellers are persuaded to sell their homes by suggesting that the neighborhood's demographic is changing in a way they might find undesirable.

Blueprints

Detailed technical drawings used for planning and constructing buildings.

Bona Fide

Something done in good faith, without any intent to deceive.

Bond Market

A financial market where debt securities are issued and traded.

Bond

A form of debt where the issuer owes the holders a debt and is obliged to pay interest and to repay the principal at a later date.

Bonding Company

A company that provides financial protection against the failure of a contractor to complete a project or meet obligations.

Book Value

The value of a property or business according to its financial documents, excluding market and other external factors.

Boot

Additional value or property given to even out a trade or exchange of properties of different values.

Borrower Paid Closing Costs

Expenses the borrower is responsible for paying at the time of closing a mortgage loan.

Borrower

The individual or entity that takes out a loan and is obligated to repay it with interest.

Boundary

The defined edges of a piece of property, as described in its deed.

Breach of Contract

Failing to fulfill a contract's terms without a lawful reason.

Breach

The act of breaking a law, promise, agreement, or expectation.

Breakpoint

The sales amount needed to cover the basic costs of renting a space.

Bridge Financing

A short-term loan used until permanent financing is secured or an obligation is removed.

Bridge Loan

A temporary loan that bridges the gap between short-term needs and long-term financing.

Broker Price Opinion (BPO)

A real estate broker's estimate of the potential selling price of a property.

Broker

A person or company that arranges transactions between a buyer and a seller for a commission.

Brokerage Fee

A fee charged for services rendered in facilitating a transaction.

Brownfield

Land previously used for industrial purposes or certain commercial uses, which may be contaminated by hazardous waste.

Buffer Zone

An area designed to separate different uses of land, like residential areas from commercial ones.

Build to Suit

A leasing arrangement where a landlord agrees to customize a space according to a tenant's specifications.

Build-Out

The construction or modification of a rental space according to a tenant's needs.

Builder Financing

Loans provided by builders to finance construction, repaid upon completion.

Building Code

Regulations that set minimum standards for construction, design, and maintenance of buildings.

Building Envelope

The physical barrier between the interior and exterior of a building, including walls, floors, roofs, and windows.

Building Inspector

An official who examines buildings to ensure they comply with codes, regulations, and standards.

Building Permit

Official approval to begin construction or renovation on a property.

Built to Suit

Similar to "Build to Suit," it refers to customizing rental space for a tenant's specific needs.

Business Owner

Someone who owns and runs a business.

Buy to Let Mortgage

A mortgage designed for properties that the borrower intends to rent out.

Buydown

A financing method where the mortgage interest rate is lowered for the first few years through an upfront payment.

Buyer's Agent

A real estate agent who represents the interests of the buyer in a transaction.

Bylaws

Rules governing the management and operation of a group or organization, such as a homeowners association.

California Privacy Policy (California Consumer Privacy Act, CCPA)

Legislation that enhances privacy rights and consumer protection for residents of California. (Read more about our California Privacy Policy here.)

Call Option

A provision in a loan that allows the lender to demand full repayment at any time.

Cap

A limit on the interest rate or payment changes in an adjustable-rate mortgage, either per adjustment period or over the life of the loan.

Capital Expenditure (CapEx)

Money used by a company to buy or improve assets like property, buildings, or equipment.

Capital Gain

The profit made from selling assets like real estate.

Capital Improvement

A major upgrade to a property that increases its value or extends its life.

Capitalization Rate

A rate used to evaluate the return on an investment property, based on the income it's expected to generate.

Capitalization

The total value of all a company's stocks, bonds, and other long-term debts.

Carry Costs

Expenses involved in owning a property, such as financing, taxes, insurance, until it is sold or generates income.

Carryback Loan

A loan where the seller provides financing to the buyer by taking part of the purchase price as a note.

Cash Flow

The net amount of cash generated by a rental property after paying for operating expenses and mortgage.

Cash Reserves

The amount of cash a borrower has after closing a loan, often required by lenders.

Cash-Out Refinance

Refinancing a mortgage for more than the owed amount to access the home's equity in cash. (Read more about our cash-out refinance home loan programs here.)

Caveat Emptor

"Let the buyer beware." The principle that the buyer is responsible for checking the quality and suitability of goods before a purchase is made.

Ceiling

The highest interest rate possible on an adjustable-rate mortgage over the loan's lifetime.

Certificate of Deposit (CD)

A bank deposit with a fixed date of withdrawal and a fixed interest rate.

Certificate of Eligibility

A document from the government certifying a veteran's eligibility for a VA loan.

Certificate of No Defense (CND)

A title company's certification that the title is legally held by the current owner.

Certificate of Occupancy (CO)

A document from a local government agency stating a building is safe and meets building codes.

Certificate of Reasonable Value (CRV)

A VA certificate that states the property's value for loan purposes.

Certificate of Sale

A document from a judicial sale entitling the buyer to receive the deed after court confirmation.

Certificate of Title

A document identifying the legal owner(s) of property or real estate.

Chain of Title

The history of all documents transferring title to a property, from the earliest to the most recent.

Change Order Request

A request for a change in the contract sum or time, usually issued by the project's architect or owner's representative.

Change Order

A document specifying changes to the original construction contract, including adjustments in price and schedule.

Chapter 11 Bankruptcy

A bankruptcy allowing businesses to restructure debt while continuing operations.

Chapter 13 Bankruptcy

A bankruptcy where individuals can repay debts over three to five years under a court-approved plan.

Chapter 7 Bankruptcy

A bankruptcy involving the liquidation of assets to repay debts.

Charge-Off

Debt that a lender has declared uncollectible and written off.

Chattel Lender

A lender specializing in loans for personal property like manufactured homes.

Chattel Loan

A loan for personal property, where the property itself serves as collateral.

Chattel

Personal, movable property, as opposed to real estate.

Cladding

The material used on the exterior walls of a building.

Clear Span

A building design that has no internal supports, like columns or pillars, offering open space inside.

Clear Title

A title without any liens or legal questions affecting the property's ownership.

Clear to Close (CTC)

A lender's final approval, indicating all loan conditions have been met and the loan can proceed to closing.

Client

An individual or entity that uses the professional advice or services of another.

Closing Agent

The person or company responsible for coordinating the closing of a real estate transaction.

Closing Costs

Fees and charges paid at the closing of a real estate transaction, including various taxes and legal fees.

Closing Disclosure

A document providing final details about a mortgage loan, including terms, payments, and fees.

Closing Statement

A detailed accounting of a real estate transaction, showing all received, charged, and paid cash.

Closing

The final step in completing a real estate transaction.

Cloud on Title

Any claim or condition found during a title search that could affect the title's validity.

Co-Borrower

An additional person responsible for repaying a loan and listed on the title.

Co-Housing

A planned community where residents choose to live with shared spaces and responsibilities.

Co-Mortgagor

A co-signer of a mortgage loan, equally responsible for repayment.

Co-op (Cooperative)

Housing where residents own shares in the building or complex, not the individual unit.

Co-Signor

Someone who signs a loan with the borrower and assumes responsibility for the debt if the borrower defaults.

Code Compliance

Meeting local building codes and regulations during construction or renovation.

Code of Ethics

A set of principles and values guiding the professional conduct of individuals or organizations.

Collateral

An asset used to secure a loan, which can be seized if the loan is not repaid.

Collection Agency

A company hired to collect overdue payments on behalf of a lender.

Collection

The process of ensuring a loan is paid back by collecting monthly payments from the borrower.

Combined Loan To Value Ratio (CLTV)

A calculation that shows the total mortgage debt as a percentage of the property's appraised value.

Commercial Bank

A bank that offers services like accepting deposits, providing business loans, and offering basic investment products.

Commercial Loan

A loan given to businesses for purposes like buying commercial real estate or funding business operations.

Commercial Mortgage-Backed Security (CMBS)

A type of security backed by mortgages on commercial properties.

Commercial Property

Property used for business activities, such as offices, malls, and factories.

Commission

A fee paid to a broker or agent for their services, usually a percentage of the property sale price.

Commitment Letter

A letter from a lender stating the terms under which it agrees to lend money.

Common Area Assessments

Fees charged to owners in a condo or PUD for the repair and maintenance of shared areas.

Common Area Maintenance (CAM)

The expense of upkeep for areas used by all tenants in a commercial property, often passed on to tenants.

Common Areas

Parts of a property like hallways and recreational facilities that are shared by all residents or tenants.

Community Land Trust Mortgage

A financing option that helps lower and moderate-income buyers afford a home by buying from a nonprofit that owns the land.

Community Property

Property owned jointly by a married couple or domestic partners.

Comparables (Comps)

Similar properties used to help determine the market value of a property being sold.

Comparative Market Analysis (CMA)

A study of the prices at which similar properties in the same area have recently sold.

Completion Bond

A guarantee that a construction project will be completed within the agreed timeframe and budget.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Condemnation

The process by which private property is legally taken for public use, with compensation to the owner.

Conditional Loan Approval

A preliminary loan approval that requires certain conditions to be met before final approval.

Condominium Association

An organization made up of condo owners that manages the property and common areas.

Condominium Conversion

The process of changing rental units into condominiums that are owned individually.

Condominium Hotel (Condo Hotel)

A building operated as a hotel but where the rooms are individually owned like condominiums.

Condominium

A property where individual units are owned privately, while common areas are owned by all unit owners.

Conforming Loan

A mortgage that meets the size and standards of Fannie Mae and Freddie Mac.

Construction Agreement

A contract outlining the terms between a client and a contractor for a construction project.

Construction Budget

The estimated cost of all aspects of a construction project.

Construction Draw Procedure

The method by which funds are withdrawn from a construction loan to pay for project expenses.

Construction Draw

A portion of a construction loan released to fund each stage of a building project.

Construction Loan Note (CLN)

Short-term debt issued to finance a construction project.

Construction Loan

A loan used to finance the construction of a building, typically replaced by a permanent loan. (Read our Construction Loan Guide here.)

Construction Management

The oversight of a construction project from start to finish, ensuring it meets planned goals.

Construction Manager (CM)

A professional responsible for managing the planning, design, and construction of a project.

Construction Mortgage

A loan that covers construction costs and is usually replaced by a standard mortgage upon completion. (Learn about Construction Home Loans here.)

Construction-to-Permanent Loan

A loan that finances construction and then converts to a standard mortgage loan.

Constructive Eviction

When a tenant is forced to leave because the landlord failed to keep the property habitable.

Consumer Loan

A loan given for personal, family, or household reasons.

Contingency Reserve

Money set aside to cover unexpected costs during construction.

Contingency

A condition that must be met for a real estate contract to proceed.

Contract Documents

All the documents, including designs and agreements, involved in a construction project.

Contract Employee

Someone hired for a specific period or project under a contract, rather than a permanent employee.

Contract for Deed

An agreement where the buyer makes payments directly to the seller until the sale price is paid in full.

Contractor

A person or company hired to perform work or provide services on a project.

Contractor's Statement

A detailed list of the work to be done, the cost, and terms agreed upon for a construction project.

Conventional Loan

A mortgage not insured by the government, typically with fixed terms and rates.

Convertible ARM

An adjustable-rate mortgage that offers the option to convert to a fixed-rate mortgage.

Conveyance Tax

A tax charged on the transfer of property ownership.

Conveyance

The act of transferring property ownership from one person to another.

Cosmetic Renovation

Improvements made to enhance the appearance of a property without significant structural changes. (Read more about renovation and rehab loans here.)

Cost Code

A system used to categorize and track construction costs for project management and accounting.

Cost Escalation

An increase in construction costs due to rising prices for materials, labor, or other factors.

Cost Estimate

An approximation of how much a construction project will cost, based on current prices for labor and materials.

Cost of Funds Index (COFI)

An index that reflects the average interest rate financial institutions pay for funds, used as a benchmark for adjustable-rate mortgages.

Cost Overrun

Expenses that exceed the original budget estimates for a construction project.

Cost-Plus Contract

A contract where the buyer agrees to pay the actual costs of labor and materials plus an additional amount for contractor profit and overhead.

Counteroffer

A new offer made in response to a previous offer, often with adjusted terms or price.

Covenant

A promise in a mortgage or deed stating that certain activities will or will not be carried out on the property.

Covenants, Conditions, and Restrictions (CC&Rs)

Rules set by a homeowners' association or developer that dictate how properties in a community can be used and maintained.

Creative Financing

Innovative or unconventional methods used to finance real estate purchases beyond traditional loans.

Credit Card Payoff

The act of paying off the total amount owed on credit card accounts.

Credit Denial

The refusal of credit by a lending institution, usually because of insufficient creditworthiness.

Credit Enhancement

Methods used to improve the creditworthiness of a financial instrument, reducing risk for investors.

Credit Letter

A letter from a bank or financial institution confirming an individual's creditworthiness.

Credit Line

An arrangement where a borrower can withdraw funds up to a predetermined limit over a certain period.

Credit Report

A detailed record of an individual's credit history compiled by a credit bureau.

Credit Repository

An organization that gathers, records, and sells information about individuals' credit histories.

Credit Score

A number representing an individual's creditworthiness, based on their credit history.

Credit Union

A member-owned financial cooperative that provides savings, credit, and other financial services at low interest rates.

Critical Path

The sequence of project activities that determines the shortest possible duration to complete the project.

Cul-de-sac

A street or lane ending in a circular turnaround, allowing for no through traffic.

Curb Appeal

The overall attractiveness of a property and its surroundings when viewed from the street.

Mortgage Terms Starting With D - F

Days on Market (DOM)

The number of days a property has been listed for sale on the market.

DD214

The official document issued upon a military service member's retirement, separation, or discharge from active duty. (Click here to request your DD214 from the VA.)

Debt Consolidation

Combining several debts into one loan with a single payment, often with a lower interest rate or monthly payment. (Read more about cash out and debt consolidation loans here.)

Debt Coverage Ratio (DCR)

A measure of a property's ability to cover its debt payments with its income.

Debt Ratio

The ratio of a person's total debt to their total income, used to assess creditworthiness.

Debt Service

The total amount of money required to make payments on debts, including both principal and interest.

Debt-to-Income Ratio (DTI)

A comparison of an individual's total monthly debt payments to their total monthly income.

Deed In Lieu of Foreclosure

An alternative to foreclosure where a borrower voluntarily transfers property ownership to the lender to satisfy a loan in default.

Deed of Trust

A legal document in some states that secures a real estate transaction, similar to a mortgage.

Deed

A legal document that represents the ownership of property and rights of the owner.

Default

The failure to meet the legal obligations of a loan, typically by not making the required payments.

Defeasance Clause

A provision in a mortgage that voids a specific right upon the happening of a certain condition.

Deferred Interest

Interest that accumulates on a loan balance when payments are insufficient to cover it, which is then added to the principal.

Deferred Maintenance

Neglecting necessary maintenance on property, resulting in a need for more significant repairs later on.

Delinquency

Failure to make mortgage payments on time.

Depreciation

The decrease in the value of an asset over time, including real estate.

Design Development (DD)

A phase in architectural services where design decisions are detailed and documented.

Design-Build

A project delivery system where one entity offers both design and construction services to the project owner.

Detached Garage

A garage that stands separate from the main structure of a house or building.

Developer

A person or company that develops land for residential or commercial use.

Developer's Profit

The earnings a developer makes from a project after all expenses are paid.

Development Loan

A loan used to finance the costs associated with developing property, including construction and land acquisition.

Disbursement

The act of paying out funds, as in paying contractors during construction or releasing loan funds.

Discount Points

Fees paid upfront to reduce the interest rate on a mortgage, with each point equaling 1% of the loan amount.

Discounted Loan

A loan offered at a lower interest rate than the current market rate.

Doctor Loan

A special mortgage product for medical professionals, offering favorable terms like low down payments and no mortgage insurance.

Down Payment Assistance

Financial assistance programs designed to help homebuyers cover the down payment on a home purchase. (Learn more about down payment assistance loans and programs here.)

Down Payment

The portion of a property's purchase price paid upfront in cash.

Draw Schedule

A detailed plan for disbursing funds from a construction loan at various stages of a project.

Due Diligence Period

A specified time frame where a buyer investigates the details of a property or project to ensure it meets their needs before proceeding.

Due Diligence

The comprehensive appraisal of a property or investment to evaluate its suitability, including legal, financial, and physical conditions.

Due-on-Sale Clause

A mortgage provision that requires the borrower to pay off the loan in full if the property is sold.

Duplex

A building divided into two separate living units, each with its own entrance.

Earnest Money Deposit

A sum of money paid to demonstrate a buyer's serious interest in purchasing a property.

Earnest Money

A deposit made by a purchaser as evidence of good faith to bind a transaction.

Earth Contact Home

A home partially buried underground to achieve better energy efficiency and integration with the environment.

Earthship Home

A sustainable, passive solar house made from natural and recycled materials, designed for minimal reliance on public utilities.

Easement

A legal right to use another's land for a specific, limited purpose without owning it.

ECOA (Equal Credit Opportunity Act)

Federal legislation that prevents lenders from discriminating against borrowers based on race, color, religion, national origin, sex, marital status, age, or because they receive public assistance.

Economic Feasibility

Analysis to determine whether a project is financially viable based on projected costs and revenues.

Economic Life

The duration during which a property can generate income or be used effectively.

Effective Interest Rate

The actual cost of borrowing, including interest, fees, and other charges, expressed as an annual rate.

Egress

A means or place of going out; an exit.

Eminent Domain

The power of the government to take private property for public use, with compensation to the owner.

Encroachment

Unauthorized intrusion of a building or other improvement onto neighboring land.

Encumbrance

A claim, lien, charge, or liability attached to and binding real property.

Environmental Impact Statement (EIS)

A report that details the potential environmental effects of a proposed project or development.

Equity Loan

A loan based on the equity of the borrower's home.

Equity Participation

An arrangement where a lender or investor receives a portion of ownership in a property in exchange for financing.

Equity Share Agreement

An agreement in which property equity is exchanged for needed services or investment.

Equity Sharing

A joint ownership arrangement where parties share in the property's equity.

Equity Skimming

An illegal practice where investors divert equity or rental income from a property without fulfilling debt obligations.

Equity

The value of an owner's interest in property after deducting the balance of liens.

Escrow Account

A third-party account where funds are held in trust until certain conditions are met.

Escrow Disbursements

Payments made from an escrow account to pay for property-related expenses like taxes and insurance.

Escrow

A legal arrangement in which a third party temporarily holds money or property until a particular condition has been met.

Estoppel Certificate

A document that prevents someone from asserting a fact that is contradictory to a previously agreed upon or established condition.

Eviction

The legal process by which a landlord removes a tenant from rental property.

Exaction

A requirement by a local government that a property owner give money, land, or improvements to the public as part of the development process.

Exclusive Listing

An agreement where a single broker has the right to sell a property for a specified time.

Extenuating Circumstances

Special situations that are considered exceptions to normal procedures, such as unexpected life events affecting loan repayment.

Fair Credit Reporting Act

Federal law designed to ensure the accuracy, fairness, and privacy of consumer information contained in the files of credit reporting agencies.

Fair Housing Act

A federal law that prohibits discrimination in housing based on race, color, religion, sex, handicap, familial status, or national origin.

Fair Market Value (FMV)

The price that property would sell for on the open market between a willing buyer and seller.

Family Land

Property that has been passed down through generations within the same family.

Fannie Mae (Federal National Mortgage Association or FNMA)

A government-sponsored enterprise that purchases mortgages from lenders to increase affordable lending. (Click here to learn more about Fannie Mae.)

Fannie Mae Homestyle Loan

A loan that allows borrowers to finance both the purchase and renovation of a home with a single mortgage. (Read about our Fannie Mae Homestyle Loan programs here.)

FDIC (Federal Deposit Insurance Corporation)

A U.S. government agency that insures deposits in banks and thrift institutions.

Feasibility Analysis

An assessment of the practicality and financial viability of a proposed project or investment.

Feasibility Study

An in-depth analysis conducted to assess the practicality and challenges of a proposed construction project, including technical, legal, and financial aspects.

Federal Home Loan Mortgage Corporation (FHLMC)

Commonly known as "Freddie Mac," a government-sponsored enterprise that purchases mortgages from lenders, pools them, and sells them as mortgage-backed securities to investors on the open market to increase the supply of money available for mortgage lending.

Federal Housing Administration (FHA)

An agency within the U.S. Department of Housing and Urban Development that insures mortgage loans made by private lenders, aimed at encouraging homeownership by offering lower down payments and more lenient credit requirements for borrowers.

Federal National Mortgage Association (FNMA)

Often referred to as "Fannie Mae," a government-sponsored entity that buys mortgages from banks and other lenders, pools them, and sells them as mortgage-backed securities to investors on the open market, thereby providing liquidity to the mortgage market.

Fee Simple

The highest ownership interest in real estate that one can have, allowing the owner complete control over the property, subject only to governmental regulations and any restrictions in place at the time of purchase.

FHA Loan

A mortgage insured by the Federal Housing Administration, designed to make homeownership accessible to individuals with lower credit scores and smaller down payments than required by conventional loans.

FHA Renovation Loan

A special type of loan insured by the FHA that allows borrowers to finance both the purchase of a home and the cost of its rehabilitation through a single mortgage, or to finance the rehabilitation of their existing home.

Fiduciary

An individual or organization that acts on behalf of another person or persons, putting their clients' interest ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other's best interests.

Final Draw

The last payment made to a contractor at the end of a construction project, usually after a final inspection confirms that all work meets the specified standards.

Final Inspection

A thorough inspection carried out after the completion of a project to ensure all work has been done according to the contract specifications and building codes.

Financier

An individual or organization that provides money for investment in business ventures or real estate.

First Mortgage

The primary loan secured by a property, which has priority over all other liens or claims on the property in the event of default.

Fixed Installment

A set monthly payment made on a loan or mortgage that includes both interest and principal.

Fixed Price Contract

An agreement where the contractor agrees to complete a project for a specified price, regardless of the actual costs incurred.

Fixed Rate Mortgage

A mortgage with an interest rate that remains constant for the entire term of the loan.

Fixed-Price Bid

A proposal to complete work for a specific project at a set price, regardless of the actual costs that may arise.

Fixed-Price Contract

A contract that stipulates a single price for all work performed, providing stability and predictability for both the buyer and seller.

Fixture

An item of personal property that becomes real property when it is attached to the land or a building in a permanent manner.

Flood Certification

A document that identifies whether a property is located in a flood hazard area as defined by the Federal Emergency Management Agency (FEMA).

Flood Insurance

Insurance that covers damage to property due to flooding, required for properties in designated flood zones with mortgages from federally regulated or insured lenders.

Floor Area Ratio (FAR)

A measure used in zoning that determines the maximum floor area allowed for a building on a particular lot, calculated by dividing the total floor area of the building by the total area of the lot.

Floor Plan Financing

A lending arrangement for purchasing inventory, typically used by dealerships to buy vehicles or large equipment.

Floor Plan

A diagram showing the layout of a building's rooms, walls, doors, and windows from above.

Foam Constructed Home

A home made with foam as a primary construction material, offering superior insulation and energy efficiency.

For Sale By Owner (FSBO)

Selling property without the assistance of a real estate agent or broker, often to avoid paying commission fees.

Forbearance Agreement

An agreement between a lender and a borrower to temporarily suspend or reduce loan payments, usually to avoid foreclosure.

Forbearance

A lender's decision to temporarily postpone foreclosure or legal actions against a borrower who is behind on payments.

Foreclosure Process

The legal procedure by which a lender sells a property after the homeowner fails to make mortgage payments, in order to recover the loan balance.

Foreclosure Sale

The process of selling property that has been foreclosed on, typically at a public auction, with the proceeds used to pay off the mortgage debt.

Foreclosure

The legal process by which a lender takes control of a property, evicts the homeowner, and sells the home after the homeowner fails to make full mortgage payments.

Foreign National Loan

A type of mortgage designed for non-residents or non-citizens of the United States who wish to purchase property within the country.

Foundation Inspection

An examination to evaluate the condition and structural integrity of a building's foundation, ensuring it meets building codes and standards.

Foundation

The base upon which the structure of a building is built, typically made from concrete and designed to support the entire weight of the building.

Four Family

A residential property divided into four distinct living spaces, each with its own living facilities.

Frank Dodd Act (Dodd-Frank Wall Street Reform and Consumer Protection Act)

Federal legislation passed in 2010 aimed at reducing risk in the financial sector by increasing regulations and oversight. (Click here to read more about the Frank Dodd Act.)

Freddie Mac

A government-sponsored enterprise (GSE) that purchases, guarantees, and securitizes mortgages to facilitate liquidity in the mortgage market. (Click here to learn more about Freddie Mac.)

Free And Clear

A term that indicates a property is owned without any encumbrances, such as mortgages, liens, or other legal claims against it.

Front-End Ratio

A financial ratio that compares an individual's gross monthly income to their monthly housing expenses, used by lenders to assess borrowing capacity.

FSBO (For Sale By Owner)

A method of selling property directly by the owner without the use of a real estate agent or broker.

Full Loan Approval

The final confirmation from a lender that a borrower has been approved for a loan under specified terms after completing all necessary checks and verifications.

Fully Amortized ARM

An adjustable-rate mortgage that includes payments which are high enough to pay off the entire loan over its term, including both interest and principal.

Mortgage Terms Starting With G - I

Garage

A structure designed to park vehicles, often attached to or part of a residential house.

General Contractor (GC)

A primary contractor responsible for overseeing a construction project, including hiring and coordinating subcontractors.

General Lien

A legal claim against all the property of a debtor, as opposed to a specific lien that is against a particular piece of property.

Generational Mortgage

A mortgage with a term so long that it extends beyond the borrower's lifetime, potentially spanning several generations.

Gentrification

The process of improving a district or house to conform to middle-class taste, which often leads to increased property values and displacement of lower-income families.

Gift Funds

Money given to a homebuyer by a relative or eligible donor to help with the down payment or closing costs, not expected to be repaid.

Gift Letter

A document provided to a lender from the donor of gift funds stating that the money is a gift and not a loan, indicating there is no obligation to repay.

Ginnie Mae

The Government National Mortgage Association, a federal agency that guarantees mortgage-backed securities to facilitate lending for housing. (Click here to learn more about Ginne Mae.)

Good Faith Estimate

An early estimate of the fees and costs associated with obtaining a mortgage, provided to borrowers by lenders under the Real Estate Settlement Procedures Act.

Grace Period

A set time after the due date during which a payment can be made without penalty, even though it is technically late.

Graduated Lease

A lease agreement where rent payments start at a lower amount and gradually increase at set intervals over the term.

Graduated Payment Mortgage

A mortgage that starts with lower monthly payments that gradually increase over time, designed to match expected increases in the borrower's income.

Grantee

The individual or entity to whom an interest in real property is transferred or conveyed.

Grantor

The individual or entity transferring or conveying an interest in real property to another.

Green Building

Building practices that increase the efficiency with which buildings use resources while reducing building impacts on human health and the environment.

Gross Lease

A lease agreement in which the landlord pays for all the property's operating expenses, including maintenance, taxes, and insurance.

Gross Monthly Income

The total amount a borrower earns each month before any deductions are taken out.

Gross Rent Multiplier (GRM)

A metric used to estimate the value of a property by multiplying its gross annual income by a certain figure.

Ground Lease

A lease agreement where the tenant leases the land from the landowner and typically owns or constructs a building on the leased land.

Ground Rent

The payment made by a lessee to the landowner for leasing the land, typically in a ground lease situation.

Growing-Equity Mortgage (GEM)

A mortgage with fixed-rate interest where the monthly payments increase over time, with the extra payment applied directly to reduce the principal balance.

Guarantee Mortgage

A mortgage that is backed by a third party, ensuring the lender will receive payment even if the borrower defaults.

Guaranteed Loan

A loan guaranteed by a third party, reducing the risk for the lender and often enabling the borrower to receive better loan terms.

Guaranteed Maximum Price (GMP)

The highest amount that a construction project owner will pay for a specified scope of work, regardless of actual costs incurred.

Habendum Clause

A section of a deed that explains the rights and interests in the property being transferred to the new owner.

Hard Costs

Direct expenses related to the physical construction of a building, including materials and labor.

Hard Credit Pull

A credit check that can affect an individual's credit score, typically conducted by lenders before offering final loan approval.

Hard Money Lender

A private lender offering loans based on the collateral value of a property, rather than the borrower's creditworthiness.

Hard Money Loan

A short-term financing option secured by real estate, offering quick funding but at higher interest rates and lower loan-to-value ratios.

Hazard Insurance

Insurance coverage that protects a property owner against damage caused by fires, severe storms, and other specific natural events.

HELOC (Home Equity Line of Credit)

A revolving line of credit that allows homeowners to borrow against the equity in their home.

High Balance

Loans that exceed the conforming loan limits set by Fannie Mae and Freddie Mac but are still within certain designated high-cost areas.

High-Rise

A building that is significantly taller than the average structure, often defined as having more than six stories.

Holding Costs

Expenses incurred from owning a property, including mortgage payments, property taxes, insurance, and maintenance costs.

Home Equity Line of Credit (HELOC)

A credit line secured by the homeowner's property, allowing the borrower to withdraw funds as needed up to a certain limit.

Home Equity Loan

A loan where the borrower uses the equity of their home as collateral, typically in a lump-sum loan with a fixed interest rate.

Home Equity

The value of a homeowner's interest in their home, calculated as the current market value minus any outstanding mortgage balances.

Home Inspection

A thorough examination of a property's condition, usually performed by a professional inspector before a sale.

Home Remodel

Renovations or improvements made to update, repair, or change the design of an existing home.

Home Warranty

A contract that covers the repair or replacement of home system components and appliances that fail due to age and normal wear and tear.

Homeowners Association (HOA)

An organization in a residential community that creates and enforces rules for the properties and their residents.

Homeowners Insurance Policy

A policy that provides financial protection against loss or damage to a homeowner's property and liability coverage.

Homeowners Insurance

Insurance that covers damage to an individual's home and possessions within the home, as well as liability for accidents that occur on the property.

Homeowners' Association Dues (HOA Dues)

Regular payments made by residents of certain communities to fund the operations and maintenance of common areas and amenities.

House Auction

A public sale where properties are sold to the highest bidder, often used as a method to sell properties quickly, including foreclosures.

Housing and Urban Development (HUD)

A U.S. government agency that supports community development and homeownership through programs and policies.

Housing Expense Ratio

The percentage of a borrower's gross monthly income that goes toward paying housing expenses, including mortgage payments, insurance, and taxes.

Housing Expense

The total cost associated with owning a home, encompassing the mortgage payment, property taxes, insurance, and homeowners association fees.

HUD-1 Settlement Statement

A document that provides an itemized listing of the funds that were paid at closing, used in real estate transactions.

Hypothecation

The practice of pledging collateral to secure a debt without giving up title, possession, or ownership rights in the collateral.

Impact Fee

Charges imposed on developers by municipalities to cover the cost of providing public services to the new development.

Impound

An account maintained by a lender in which a homeowner's monthly mortgage payment includes amounts for property taxes and insurance, to be paid by the lender when due.

In-House Financing

Financing offered directly by a seller to a buyer, bypassing third-party lenders, to facilitate the sale of property or goods.

Income Documentation

Documents that verify a borrower's income, used by lenders to determine loan eligibility.

Income Property

Real estate developed or improved to generate income, such as rental properties.

Index Rate

A benchmark interest rate, like the prime rate or LIBOR, that determines interest adjustments for adjustable-rate mortgages.

Index

A published interest rate that lenders use to calculate rate adjustments for adjustable-rate mortgages (ARMs).

Infrastructure

The basic physical and organizational structures needed for the operation of a society or enterprise, such as roads, utilities, and water supply.

Ingress and Egress

The right to enter and exit a property, ensuring access to the property.

Inspection Fee

A charge for the professional examination of a property's condition, typically conducted by a certified inspector.

Inspection

A detailed examination of a property or project to ensure it meets specified criteria, such as building codes and contract stipulations.

Installment Loan

A loan repaid with interest in equal periodic payments.

Insulated Concrete Foam Home (ICF)

A building technique using concrete forms insulated with foam as structural walls, known for energy efficiency and strength.

Interest Accrual Rate

The rate at which interest accumulates on a loan.

Interest Only Loan

A loan where the borrower pays only the interest for some time, before paying both interest and principal.

Interest Rate Buy Down

The act of paying an upfront fee to lower the interest rate on a mortgage loan.

Interest Rate Cap Structure

Limits set on how much the interest rate can change at adjustment periods in an adjustable-rate mortgage.

Interest Rate

The percentage charged on a loan or paid on deposits over a specific period, representing the cost of borrowing or the payment for saving.

Interest

The fee charged by a lender to a borrower for the use of borrowed money, typically a percentage of the principal.

Interim Financing

Short-term funding used to cover project costs until long-term financing is secured.

Investment Property

Real estate purchased to generate rental income or to be sold for profit rather than used as a primary residence.

Investor Loan

A mortgage designed for purchasing properties intended to be used as investments rather than as primary residences.

ITIN Loans

ITIN Loans are mortgage loans available to non-U.S. citizens who do not have a Social Security number but possess an Individual Taxpayer Identification Number (ITIN). These loans are designed to provide financing opportunities for purchasing a home in the United States to borrowers who may otherwise be ineligible for traditional mortgage products due to their citizenship status. (Read more about ITIN Home Loans here.)

ITIN Number

An ITIN Number, or Individual Taxpayer Identification Number, is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who are required to have a U.S. taxpayer identification number but do not have, and are not eligible to obtain, a Social Security number. ITINs are used by individuals for tax filing and reporting purposes and help ensure that people, including non-residents and foreign nationals, comply with U.S. tax laws.

Mortgage Terms Starting With J - L

Joint Tenancy

A type of property ownership in which all owners hold equal shares and have equal rights to the property.

Joint Venture (JV)

A business arrangement where two or more parties pool their resources for the purpose of accomplishing a specific project.

Judgment

A court's final decision or order in a lawsuit.

Judicial Foreclosure

A foreclosure process that involves court action, where the property is sold under court supervision after the borrower defaults.

Jumbo Loan

A mortgage that exceeds the conforming loan limits set by Freddie Mac and Fannie Mae, often used to purchase luxury properties.

Land Acquisition Loan

Financing used to purchase land, especially for development or construction purposes.

Land Contract

An agreement where the buyer makes payments to the seller for a specified period in exchange for the title to the land.

Land Development Loan

A loan for financing the improvements and infrastructure required to prepare land for construction or use.

Land Financing

Financial arrangements for purchasing land, including loans and other forms of credit.

Land Lease

An agreement where the tenant rents the land but owns or builds the structures on it.

Land Loan

A loan specifically for purchasing a piece of land.

Landlord

The owner of a rental property who leases it to a tenant.

Lease Option

A rental agreement that includes an option for the tenant to buy the property at a predetermined price during or at the end of the lease term.

Lease To Own

An agreement where a tenant can purchase the rental property during or at the end of the lease period.

Lease

A contractual agreement where a lessee (tenant) pays the lessor (owner) for use of an asset for a specified period.

Leased Land

Land that is used by someone other than the owner under the terms of a lease.

Leasehold Estate

A tenant's right to occupy real estate during the term of a lease, typically for a long term.

Leasehold Improvements

Alterations made to rental premises by or for a tenant.

Leasehold Mortgage

A mortgage on a tenant's interest in a leasehold estate.

Leasehold Property

Property that a tenant occupies and uses under the terms of a lease agreement.

Lender

An entity that loans money to borrowers with the expectation that the money will be repaid with interest.

Lender's Policy

Title insurance that protects the lender's interest in the property as security for the loan.

Letter of Intent (LOI)

A document outlining the preliminary understanding between parties who intend to make a deal or contract with each other.

Leverage

The use of various financial instruments or borrowed capital to increase the potential return of an investment.

Liability Insurance

Insurance coverage that provides protection from claims resulting from injuries and damage to people and/or property.

LIBOR (London Interbank Offered Rate)

A benchmark rate that some of the world's leading banks charge each other for short-term loans, influencing interest rates globally.

Lien Holder

An entity that has a legal right or interest in a property until a debt or duty that it secures is satisfied.

Lien Release

A document from a creditor stating that a lien has been paid off and removed from the property.

Lien Waiver

A document in which a contractor, subcontractor, or supplier waives rights to place a lien on a property for the amount of an invoice that has been paid.

Lien

A legal right or claim against a property by a creditor until a debt owed by the property owner is paid off.

Life Cap

A limit on how much the interest rate on an adjustable-rate mortgage can increase over the life of the loan.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Listing Agent

The real estate agent who represents the seller and lists the property for sale.

Listing Agreement

A contract in which a property owner employs a real estate broker to find a buyer for the property under certain terms.

Listing

An agreement or contract that gives a real estate agent the right to sell or lease a property.

Load Factor

The ratio of the total rentable square footage to the total usable square footage, indicating the proportion of common areas and amenities.

Loan Abandonment

The act of a borrower discontinuing the loan process after initiation but before completion.

Loan Closer

An individual responsible for assembling and preparing all necessary documents for the closing of a loan, ensuring accuracy and compliance.

Loan Closing

The conclusive step in a real estate transaction where the sale is finalized, the title is transferred, and finances are settled.

Loan Commitment

A lender's formal promise to offer a loan to a borrower under specific terms.

Loan Conditions

Criteria set by the lender that the borrower must meet for the loan to be fully approved.

Loan Default

The failure of a borrower to meet the repayment terms as agreed in the loan contract.

Loan Denial

The refusal of a loan application by the lender, typically due to insufficient creditworthiness or other eligibility criteria.

Loan Disbursement

The release of loan funds to the borrower, builder, or seller, often occurring in stages.

Loan Eligibility

The criteria a borrower must meet to qualify for a loan, based on factors like income, credit history, and employment.

Loan Estimate

A document that provides important information about the requested loan, including estimated interest rates, monthly payments, and closing costs.

Loan Exception

A loan approved under special conditions where the borrower doesn't meet standard lending criteria, often due to mitigating factors.

Loan Extension

An agreement to extend the due date or term of a loan, providing the borrower with additional time to repay.

Loan Foreclosure

The legal process through which a lender seizes and sells a property after the borrower fails to meet repayment obligations.

Loan Modification

A change made to the terms of an existing loan, agreed upon by the lender and borrower, to accommodate the borrower's financial hardship.

Loan Officer

A bank or financial institution's representative who evaluates, authorizes, or recommends the approval of loan applications.

Loan Origination Fee

A charge by the lender for processing a new loan application, intended to cover document preparation, credit checks, and other expenses.

Loan Origination

The process by which a borrower applies for a new loan, and the lender processes that application.

Loan Processor

A professional who manages the paperwork and submission process for a loan application, ensuring all necessary documentation is collected and verified.

Loan Servicing

The ongoing process of managing a loan from the time the funds are disbursed until the loan is paid off, including collecting payments and managing escrow accounts.

Loan Underwriter

A specialist who assesses the risk of offering a loan to a borrower, based on an analysis of credit, employment, income, and other factors.

Loan Withdrawal

The cancellation of a loan application before it has been approved or denied by the lending institution.

Loan-to-Cost Ratio (LTC)

A financial metric used to compare the financing of a property to its cost, important in commercial mortgages and multifamily lending.

Loan-to-Value Ratio (LTV)

A calculation used by lenders to assess the risk of a loan, determined by dividing the loan amount by the appraised value or purchase price of the property.

Lock-In Period

A guaranteed time frame during which a borrower has a specific interest rate locked in with a lender, protecting against rate increases.

Log Cabin Home

A residence constructed from logs that have not been milled into standard lumber, known for its rustic appearance and natural insulation.

Lot

A designated parcel of land, identified for legal purposes and potentially ready for development or construction.

Low Balance

Refers to a loan amount that falls below a specified level, often within conforming loan limits for conventional loans.

LOX (Letter of Explanation)

A document provided by a borrower to explain any unusual or questionable details in their financial history during the loan application process.

Mortgage Terms Starting With M - O

Manufactured Construction Loan

A Manufactured Construction Loan provides financing for the purchase and setup of a manufactured home. These loans cover the cost of the home, as well as any site work and installation required, and are typically secured by the finished property. (Learn more about Manufactured Construction Loans here.)

Manufactured Home

A home built in a factory and then transported to a site where it is set on a permanent foundation; previously known as a mobile home. (Click here to learn about Manufactured Home Loan Lenders.)

Manufactured Jumbo Loan

A Manufactured Jumbo Loan is a financing option designed for purchasing high-value manufactured homes that exceed the loan limits set by conventional financing options. It provides borrowers with the necessary funds to buy luxury manufactured homes or those located in high-cost areas, typically requiring a higher down payment and credit score compared to standard manufactured home loans. (Read about Manufactured Jumbo Loans here.)

Market Value

The highest price a willing buyer would pay and a willing seller would accept for a property, assuming both parties are well-informed and under no pressure to act.

Master Plan

A comprehensive plan detailing the development or construction project's long-term strategy and layout.

Material Release

A document indicating that a supplier's claim to materials supplied or lien against the property has been satisfied.

Materialman's Lien

A lien placed on a property for unpaid materials used in the construction project, ensuring suppliers are compensated.

Mechanic's Lien

A legal claim against a property for unpaid labor or materials that contributed to the improvement of that property.

Mechanical Systems

Systems within a building that provide essential services, such as heating, ventilation, air conditioning (HVAC), and plumbing.

Mechanical, Electrical and Plumbing (MEP)

Refers to the critical systems in construction that include mechanical, electrical, and plumbing components of a building project.

Metal Home

A residence made primarily from metal components, noted for its strength, durability, and often energy efficiency.

Metes and Bounds

A method of describing land or real estate using boundary lines with terminal points and angles.

Mixed Use Property

A property that combines residential, commercial, industrial, or cultural uses into one space, where those functions are physically and functionally integrated.

MLS (Multiple Listing Service)

A comprehensive database used by real estate agents and brokers to list properties for sale, enhancing exposure and access to information.

Mobile Home

A prefabricated home built in a factory and then transported to a living site, not permanently affixed to the land. (Click here to learn about Mobile Home Loan Lenders and Programs.)

Modular Construction Loan

A Modular Construction Loan offers financing for the construction of modular homes, which are built in sections at a factory and then assembled on-site. This type of loan covers both the construction phase and the permanent mortgage and is designed to convert to a traditional mortgage upon completion of the home. (Read more about Modular construction loans here.)

Modular Home

A home constructed in modules at a factory and then assembled on-site on a permanent foundation. (Read more about Manufactured and Modular Construction Loans.)

Mortgage Bank

A financial institution specializing in originating, funding, and servicing mortgage loans.

Mortgage Banker

A company or individual that originates mortgage loans, using their own funds or borrowed funds for lending.

Mortgage Broker

An intermediary who assists borrowers in finding mortgage loans, often by comparing terms from various lenders.

Mortgage Calculator

An online tool that calculates mortgage payments, including principal, interest, taxes, and insurance, based on input variables. (Click here to use our Mortgage Calculator to check how much you qualify for.)

Mortgage Company

A firm engaged in the business of originating and/or funding mortgages for residential or commercial property.

Mortgage Insurance Premium (MIP)

Required insurance on FHA loans for borrowers making down payments of less than 20%, designed to protect the lender in case of default.

Mortgage Insurance

Insurance that protects the lender against loss if a borrower defaults on a loan, typically required for down payments below 20%.

Mortgage Lender

An institution that lends money to borrowers for the purchase of real estate.

Mortgage Payoff

The act of paying the remaining balance on a mortgage loan, thereby fulfilling the borrower's obligation.

Mortgage

A legal agreement by which a bank, building society, etc., lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Mortgagee Letter

A document issued by the lender outlining important information regarding the terms, conditions, or status of a mortgage loan.

Mortgagee

The lender in a mortgage agreement, typically a bank or financial institution.

Mortgagor

The borrower in a mortgage agreement, who pledges the property as security for the loan.

Multi Family Home

A residential structure designed to house several different families in separate housing units.

Multi-Plex

A building divided into multiple residential units, offering separate living spaces for multiple tenants or families.

Multiple Listing Service (MLS)

A comprehensive system utilized by real estate agents to list properties, making details available to other agents to help find buyers.

Negative Amortization

A situation in loan repayment where the principal balance grows because payments made are not enough to cover the interest.

Negotiated Contract

An agreement where the terms and conditions are discussed and agreed upon by all parties before finalization.

Net Lease

A lease agreement where, in addition to rent, the tenant pays for one or more of the property expenses, such as taxes, insurance, and maintenance.

Net Listing

An arrangement where the real estate agent's commission is the difference between the sale price and a minimum amount the seller wants to receive.

Net Operating Income (NOI)

The total income from a property minus operating expenses, not including taxes and interest payments.

No-Cash-Out Refinance

A refinancing of a mortgage where the new loan amount covers only the existing mortgage balance and closing costs.

No-Documentation Loan

A mortgage that does not require borrowers to prove their income through standard documentation like pay stubs or tax returns.

Non-Arms Length Transaction

A deal where the buyer and seller have a pre-existing relationship, potentially leading to a conflict of interest or non-market transaction terms.

Non-Conforming

Refers to a loan that does not meet the purchasing guidelines of Fannie Mae or Freddie Mac, often because it exceeds the loan size limits.

Non-Recourse Loan

A loan secured by collateral, usually property, where the borrower is not personally liable beyond the collateral.

Notarized Document

A document that has been certified by a notary public to verify the authenticity of signatures.

Notary Public

An official authorized to witness signatures on documents, administer oaths, and perform other administrative functions.

Notice of Completion

A legal document filed to indicate that a construction project is complete, initiating the period for filing any mechanics' liens.

Notice of Default

A formal notification issued to a borrower indicating a failure to meet loan obligations, typically a step before foreclosure.

Notice to Proceed (NTP)

A formal notice given by the project owner allowing the contractor to start work on a specified date.

Nurse Loan

A mortgage product specifically designed for nurses, offering special terms like lower down payments and favorable interest rates.

Offer

A formal proposal to buy a property at a specific price, subject to conditions.

One-Time Close Construction Loan

A construction loan that covers the construction period and then converts into a permanent mortgage, requiring only one closing process. (Click here to read about the One-Time Close Construction Loan.)

Open House

A scheduled event where a property for sale is opened for viewing by potential buyers.

Open Listing

A non-exclusive contract that allows a property owner to list with multiple brokers and sell the property themselves.

Open-End Mortgage

A flexible mortgage that allows the borrower to borrow additional funds under the same loan agreement up to a certain limit.

Operating Expenses

Costs associated with running and maintaining a property, such as utilities, maintenance, and property management fees.

Option to Buy

A provision in a lease that grants the tenant the right to purchase the property under specific conditions.

Option

A contractual right, but not obligation, to buy or sell a property or asset at a specified price within a specified time.

Origination Fee

A fee charged by a lender to process a new loan application, typically a percentage of the loan amount.

Origination

The process of creating a new loan, from application through funding.

OTC Loan (One-Time Close Loan)

A construction loan that combines the construction phase and the permanent financing phase into a single loan with one closing. (Read about OTC Loans here.)

Overhead Costs

Expenses not directly tied to a specific project but necessary for running a business, like administrative salaries and office rent.

Overhead

General business expenses not directly attributable to a specific business activity or project.

Owner Financing

A transaction where the property's seller provides all or part of the financing for the buyer's purchase.

Terms Starting With P - R

Paid off Land

Land that is fully owned without any outstanding mortgages or loans.

Parcel

A specific piece of land, defined by boundaries, that is owned or can be owned.

Partial Release

A mortgage clause allowing certain parcels of property to be released from the mortgage upon repayment of a specific amount of the loan.

Partition

The division of real property among co-owners so each owns a portion individually.

Paystub

A document provided by an employer that shows an employee's earnings, taxes, and deductions for a specific pay period.

Percentage Lease

A lease where the rent amount is based on a percentage of the monthly or annual gross sales made on the premises.

Percolation Test

A test to determine the water absorption rate of soil for the installation of a septic system.

Performance Bond

A bond issued to ensure the satisfactory completion of a project by a contractor.

Performance Metrics

Measurements that are used to assess the efficiency, performance, or progress of a project or investment.

Performance Specification

A document that describes the operational requirements of a project, allowing contractors to propose methods to achieve the desired outcomes.

Peril

The risk of loss or damage to property, which can be insured against.

Permanent Foundation

A durable foundation built to support a structure for its entire life.

Permanent Loan

A long-term mortgage loan that replaces short-term interim financing, such as a construction loan.

Permit

Official authorization or approval required for various types of construction or renovation projects.

Personal Guarantee

An agreement where an individual's personal assets are pledged as security for a loan.

Personal Property

Property that is movable and not fixed to one location, as opposed to real estate.

Phase Inspection

Inspections conducted at various stages of construction to ensure compliance with plans, specifications, and codes.

PITI

An acronym for Principal, Interest, Taxes, and Insurance - the components of a typical mortgage payment.

Plans and Specifications (P&S)

Detailed documents that outline how a building or project should be constructed, including materials, methods, and dimensions.

Plat Book

A public record containing detailed maps that show the division of streets, blocks, lots, and individual parcel measurements.

Plat

A surveyor-drawn map or chart of a lot, subdivision, or community showing boundary lines, buildings, improvements, and easements.

Points (or Discount Points)

Fees paid directly to the lender at closing in exchange for a reduced interest rate; each point equals 1% of the loan amount.

Power of Sale

A clause in a mortgage allowing the lender to sell the property without court supervision if the borrower defaults on the loan.

Pre-Approval and Pre-Qualification

Processes to determine a potential borrower's creditworthiness and how much they can borrow before applying for a mortgage.

Pre-Approval

An official indication from a lender stating the amount a borrower is qualified to borrow before selecting a property.

Pre-Foreclosure

The status of a property in the process of foreclosure due to the owner's failure to meet mortgage obligations.

Pre-Qualification

An initial evaluation of a potential borrower's financial status to determine if they may qualify for a loan.

Predatory Lending

Unfair lending practices that exploit borrowers, often involving high interest rates, excessive fees, or deceptive terms.

Prepayment Penalty

A fee charged for paying off a loan earlier than the agreed term, applicable only if specified in the loan agreement.

Prime Contractor

The primary contractor responsible for overseeing construction work and ensuring project completion.

Prime Rate

The interest rate banks charge their most creditworthy customers, often used as a benchmark for other loans.

Principal, Interest, Taxes, and Insurance (PITI)

Components of a typical mortgage payment, encompassing the loan principal, interest, property taxes, and homeowner's insurance.

Principal

The original loan amount borrowed or the remaining balance of a loan, excluding interest.

Private Mortgage Insurance (PMI)

Insurance required on mortgages with less than a 20% down payment, protecting the lender in case of borrower default.

Private Property

Land or possessions owned by an individual or group, used exclusively by the owner(s).

Pro Forma

A financial statement estimating the expected financial performance of a project or investment.

Probate

The legal process through which a deceased person's will is validated and their assets are distributed.

Progress Payment

Payments made to contractors based on completed work stages during a construction project.

Proof of Employment

Verification that an individual is employed and earning a specified salary or wage.

Proof of Funds

Documentation confirming a person has sufficient funds available for a particular transaction.

Property Abandonment

The act of an owner giving up possession and control of a property without transferring ownership to another party.

Property Lease

A legal agreement detailing terms under which one party agrees to rent property from another.

Property Management

The administration of residential, commercial, or industrial real estate, including managing property maintenance and leasing.

Property Manager

An individual or firm responsible for the day-to-day operations of a piece of real estate.

Public Record

Information that has been filed or recorded by public agencies, available to the general public.

Punch List Items

A list detailing work that does not conform to contract specifications, needing completion before final payment.

Purchase Loan

A purchase loan is a type of financing arranged specifically for acquiring a property or real estate. It is typically obtained from a bank, credit union, mortgage company, or other financial institution. The loan amount is usually a significant portion of the property's purchase price, with the borrower agreeing to pay back the principal amount along with interest over a predetermined period. Purchase loans are secured by the property being purchased, meaning the lender holds the title or deed as collateral until the loan is fully repaid. This type of loan is primarily used by individuals and families looking to buy a home, as well as by investors purchasing real estate properties. (Click here to read more about Purchase Loan Programs.)

Purchase Renovation Loan

A loan covering both the purchase price of a home and the cost of home improvements. (Click here to read more about purchase renovation loans.)

Quitclaim Deed

A legal document transferring a property owner's interest to a recipient, without guaranteeing the title's validity.

Rate and Term Refinance

Refinancing that changes the interest rate, loan term, or both of a mortgage without advancing new money on the loan.

Rate Buy Down

The process of paying additional fees to reduce the interest rate of a mortgage loan.

Rate Lock Extension

An agreement to extend a mortgage rate lock period, often for a fee, due to delays in loan processing.

Rate Lock

A guarantee from a lender to lock in a specific interest rate for a set period, protecting the borrower from rate increases.

Rate Markets

Financial markets concerned with the trading of interest rates or products based on interest rates.

Real Estate Agent

A licensed professional who represents buyers or sellers in real estate transactions.

Real Estate Broker

A person who has additional education beyond that of an agent and is authorized to manage their own real estate businesses.

Real Estate Concession

Incentives offered by a seller to encourage a buyer to close a deal, such as paying closing costs.

Real Estate Investment Trust (REIT)

A company that owns, operates, or finances income-producing real estate, offering investors a share of the produced income.

Real Estate Owned (REO)

Property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction.

Real Estate Settlement Procedures Act (RESPA)

Federal law that ensures consumers are provided with accurate and timely information during the real estate settlement process.

Real Estate Taxes

Annual taxes based on the assessed value of property and land, paid by the property owner.

Real Property

Land and any permanent structures on it, including buildings and natural resources.

Realtor®

A real estate professional who is a member of the National Association of Realtors® and adheres to its code of ethics.

Realty

Another term for real estate or real property; tangible assets including land and buildings.

Redlining

A discriminatory practice by lenders that refuse or limit loans, mortgages, insurance, etc., within specific geographic areas, often based on racial or economic criteria.

Refinance

The process of replacing an existing mortgage with a new one, typically to obtain better loan terms.

Refinancing Costs

Fees associated with obtaining a new mortgage to replace the original, including closing costs, appraisal fees, and legal fees.

Rehab Loan

A loan that provides funds for both purchasing and renovating a property. (Read more about Rehab Home Loans here.)

Renovation Loan

A loan that combines the purchase price of a home with additional funds for renovations into one mortgage. (Click here to read more about renovation home loans.)

Rent Control

Regulations that limit how much rent can be charged for residential housing to keep it affordable for renters.

Rent Roll

A comprehensive list showing the rental income, lease terms, and tenant details for a property, used by property managers and owners.

Rent-to-Own

An agreement allowing a tenant the option to purchase the rented property after a specified period of occupancy.

Rented Land

Land that is rented from the owner under specific terms for a set duration, often for the construction of a building.

Renters Insurance

An insurance policy that covers a tenant's personal belongings and liability within a rented property.

REO (Real Estate Owned)

Properties owned by a bank or lender, typically acquired through foreclosure.

Request for Proposal (RFP)

A formal invitation issued by a business or agency requesting proposals for a specific service, commodity, or asset.

Reserve Fund

Funds set aside by a property or homeowners' association for major repairs or improvements.

Residual Value

The estimated market value of an asset at the end of its lease or its useful life.

Retainage

A portion of a contractually due payment withheld until project completion to ensure all obligations are met.

Retention

Funds withheld from a contractor's payment by the client as security to ensure project completion and satisfaction.

Return on Investment (ROI)

A measure used to evaluate the profitability of an investment compared to its cost.

Reverse Mortgage

A financial product for homeowners aged 62 or older, allowing them to convert part of their home equity into cash while retaining home ownership.

Right of First Refusal (ROFR)

A right granting the holder the option to enter a business transaction with the property owner before the owner can offer it to third parties.

Roof Inspection

An assessment conducted to determine a roof's condition, identify damages, and estimate its remaining lifespan.

Mortage Terms Starting With S - U

Sale-Leaseback

A financial transaction where one sells an asset and leases it back for the long term; effectively freeing up capital while retaining use of the asset.

Schedule-C

A tax form used by sole proprietors to report profits or losses from their business operations.

Second Home

A property owned in addition to the primary residence, often used as a vacation or investment property.

Second Mortgage

A loan taken out on a property that already has a mortgage, with the second loan being subordinate to the first.

Secondary Market

The financial market where securities and loans, including mortgages, are bought and sold after their original issuance.

Secured Loan

A loan backed by collateral, providing the lender with security that can be seized if the borrower defaults.

Self Employed

Individuals who operate their own businesses or work as freelancers, rather than being employed by someone else.

Seller Carryback

An arrangement where the seller of a property provides financing to the buyer, often in the form of a mortgage.

Seller Financing

A transaction where the seller of a property extends credit to the buyer to finance the purchase.

Seller Held Second

A second mortgage provided by the seller to the buyer to facilitate the sale, usually to cover part of the down payment.

Seller Paid Closing Costs

Closing costs that are paid by the seller of a property, often negotiated in the sales contract.

Seller's Agent

A real estate agent representing the seller's interests in a property transaction.

Septic Inspection

An examination of a property's septic system to ensure it is functioning correctly and to determine its maintenance state.

Service Release Premium (SRP)

The payment a lender receives for selling the servicing rights of a loan to another financial institution.

Short Sale

A real estate transaction where the sale price is less than the balance owed on the property's loan, requiring lender approval.

SIP Panel Home (Structural Insulated Panel)

Homes constructed using panels that consist of an insulating foam core sandwiched between two structural facings, typically made of oriented strand board (OSB).

Site Plan

A detailed drawing representing the proposed development and use of a parcel of land including structures, access, and landscaping.

Soft Costs

Indirect expenses associated with a project, such as architectural, legal, and administrative fees, rather than direct construction costs.

Soft Credit Pull

A credit inquiry that does not affect an individual's credit score, often used in preliminary credit checks.

Soil Test

An analysis conducted to assess soil composition and characteristics, crucial for determining suitability for construction or agriculture.

Straw Buyer

An individual used to conceal the true identity of the real purchaser of a property, often for fraudulent purposes.

Structural Renovation

Improvements made to a building's structural elements, such as foundations, beams, or load-bearing walls. (Learn more about which home loan programs allow structural renovation here.)

Subcontractor

A specialist contractor hired by the general contractor to perform specific tasks within the larger construction project.

Subdivision

The act of dividing a larger tract of land into smaller parcels, each with its own legal title.

Subordination Clause

A legal agreement that makes the claim of one mortgage fall behind that of another in priority.

Subprime Mortgage

A type of mortgage offered to individuals with poor credit histories, carrying higher interest rates to compensate for higher risk.

Substantial Completion

The point at which a construction project is sufficiently completed, according to contract specifications, so it can be used for its intended purpose.

Survey

A precise measurement and description of a property's boundaries and dimensions, typically prepared by a licensed surveyor.

Take-Out Loan

A permanent, long-term loan that "takes out" a short-term construction loan used to finance building projects.

Tax Returns

Official documents filed with tax authorities that declare income, deductions, and tax payments.

TCPA (Telephone Consumer Protection Act)

Legislation that aims to protect consumer privacy by regulating telemarketing practices, including calls, SMS texts, and faxes.

Tenant Lease

A contractual agreement where a tenant agrees to rent a property from a landlord for a specified period and at an agreed-upon rate.

Tenants Rights

Legal protections afforded to tenants, including the right to a safe living environment, privacy, and the return of security deposits under certain conditions.

Term

The duration over which a loan or mortgage is to be repaid.

Three Family

A residential property designed to house three separate families or units, each with independent living facilities.

TILA (Truth in Lending Act)

Federal legislation designed to ensure consumers are fully informed about the terms and costs of borrowing before entering into a credit agreement.

Tiny Home

A compact dwelling, typically ranging from 100 to 400 square feet, often built on a trailer chassis for mobility.

Title Company

A firm specializing in examining and insuring titles to real estate, ensuring buyers receive clear title upon purchase.

Title Defect

An issue or claim affecting the ownership or marketability of a property's title, potentially leading to disputes or legal challenges.

Title Insurance

Insurance protecting homeowners and lenders against financial loss due to title defects, ensuring clear ownership.

Title Policy

An insurance policy safeguarding against financial losses resulting from title defects or disputes, issued to homeowners or lenders.

Title Search

An investigation of public records to verify legal ownership of a property and uncover any claims or liens affecting the title.

Title

A legal document proving ownership or rights to a property.

Traditional Construction Loan

Short-term financing used to fund the construction of a new home or building, typically transitioning to permanent financing upon completion.

Triple Net Lease (NNN)

A lease where the tenant agrees to pay real estate taxes, insurance, and maintenance costs, in addition to rent.

Triplex

A residential property divided into three separate living units.

Turndown

The rejection of a loan application by a lender due to failure to meet approval criteria.

Turnkey

A completed project or property ready for immediate use or occupancy without the need for further work or modifications.

Two Family

A residential building with two separate living units.

Two-Time Close Construction Loan

A construction loan requiring two separate closings: one for the construction phase and another for permanent financing. (Read about Two-Time Close Construction Loan options here.)

Umbrella Insurance

Additional liability coverage extending beyond the limits of standard home, auto, or watercraft insurance policies.

Unconventional Financing

Non-traditional financial arrangements such as lease-to-own agreements or seller financing.

Underwater

A property with a mortgage balance exceeding its current market value.

Underwriting Approval

Confirmation from a lender's underwriting department that a borrower meets loan criteria, ensuring funding.

Underwriting Exception

A deviation from standard lending criteria, permitted based on compensating factors, to approve a loan.

Underwriting

The process lenders use to evaluate loan applicants' creditworthiness and determine loan eligibility.

Unsecured Loan

A loan not backed by collateral, relying solely on the borrower's creditworthiness.

USDA

The United States Department of Agriculture (USDA) is a federal agency that oversees agriculture, forestry, rural economic development, and nutrition. It offers various programs including loans and grants to promote homeownership in rural areas, support farming operations, and enhance food security. (Read more about the USDA here.)

USDA Construction Loan

A USDA Construction Loan provides financing for the construction, improvement, or renovation of homes in eligible rural areas, offering low interest rates and no down payment requirements, backed by the United States Department of Agriculture.

USDA Loan

A mortgage offered by the United States Department of Agriculture for rural property owners. (Read more about USDA Home Loan Lenders here.)

USDA Manufactured Home Loans

USDA Manufactured Home Loans offer financing options for the purchase of new or existing manufactured homes in eligible rural areas. Backed by the United States Department of Agriculture, these loans provide affordable financing solutions, including no down payment requirements and favorable interest rates, to qualified buyers seeking affordable housing options in designated rural communities. (Read more about USDA Manufactured Home Loans here.)

USDA OTC Loan

A USDA OTC (One-Time Close) Loan combines construction financing and permanent mortgage into a single loan, simplifying the process for building a home in eligible rural areas with no down payment, backed by the United States Department of Agriculture. (Learn more about the USDA OTC Loan here.)

USDA Purchase Loan

A USDA Purchase Loan offers eligible rural and suburban homebuyers competitive interest rates, no down payment, and 100% financing. This loan is backed by the United States Department of Agriculture. (Learn more about USDA Purchase Home Loan programs and guidelines here.)

USDA Repair Escrow

A loan allowing buyers to finance home improvements into their mortgage to repair or upgrade a rural home. (Learn more about USDA Repair Escrow and other renovation loans here.)

USDA Streamline Assist

The USDA Streamline Assist is a refinancing program offered by the United States Department of Agriculture that allows existing USDA borrowers to refinance their current USDA loans to lower interest rates and monthly payments without a new appraisal, credit review, or property inspection. (Read more about the USDA Streamline Assist refinance program here.)

Usury

The illegal practice of charging excessively high-interest rates on loans.

Mortgage Terms Starting With V - Z

VA Cash Out Loan

A VA Cash-Out Loan allows veterans to refinance their existing mortgage and take out cash from the home's equity. This type of loan is backed by the Department of Veterans Affairs. (Read about VA Cash Out Home Loan guidelines here.)

VA Construction Loan

A VA Construction Loan offers veterans the ability to finance the construction of a new home with a VA-backed loan, combining the benefits of a traditional VA loan with specific construction features. (Read more about VA Construction loans here.)

VA Jumbo Loan

A VA Jumbo Loan is designed for veterans looking to finance homes that exceed the standard loan limits set by the VA. These loans typically require a down payment and offer competitive rates. (Learn more about VA Jumbo Loans here.)

VA IRRRL (Interest Rate Reduction Refinance Loan)

A VA loan program allowing existing VA loan holders to refinance at a lower interest rate. (Learn more about the VA IRRRL Loan program here.)

VA Loan

A mortgage guaranteed by the Department of Veterans Affairs, available to eligible veterans, service members, and surviving spouses. (Read more about VA Loan programs here.)

VA Manufactured Loan

A VA Manufactured Loan provides financing to veterans for the purchase of manufactured homes or mobile homes. These loans are backed by the VA and offer terms similar to those of traditional VA loans. (Read more about VA Manufactured Home Loans and guidelines here.)

VA Purchase Loan

A VA Purchase Loan is designed to help veterans buy a primary residence with no down payment, no private mortgage insurance, and competitive interest rates, backed by the Department of Veterans Affairs. (Read more about VA Purchase Loans here.)

VA Renovation Loan

A VA loan allowing veterans to purchase and renovate a home with one mortgage. (Read more about VA Renovation Loans here.)

Vacancy Rate

The percentage of unoccupied units in a rental property at a given time.

Vacation Rental

A property rented to tourists for short-term stays.

Variable Rate Mortgage

A mortgage with an interest rate that fluctuates over time based on market conditions.

Variance

Permission granted by local authorities to deviate from zoning regulations for a property.

Veteran

An individual who has served in the armed forces.

VOD (Verification of Deposit)

Documentation used by lenders to confirm a borrower's bank account balance.

VOE (Verification of Employment)

Verification of a borrower's employment status and income, typically required by lenders.

VOL (Verification of Loan)

Confirmation of a borrower's loan information with another lender, often required during the mortgage application process.

W2

A tax form reporting an employee's wages, salary, and tax withholdings, issued by employers.

Walkthrough

A final inspection of a property to identify any issues before completing a real estate transaction.

Warehouse Financing

Inventory financing where loans are secured by goods held as collateral, commonly used by manufacturers and processors.

Warranty Deed

A deed guaranteeing the grantor's clear title to a property and right to sell it, providing assurance to the grantee.

Warranty

A promise or guarantee, often from the seller, regarding the condition or performance of a product or property.

Well Inspection

An assessment of a property's well water system to ensure it functions properly and provides safe drinking water.

Yield Spread

The difference between the interest rate charged on a loan and the rate paid on deposits or investments.

Zero Balance

The state of a loan or credit account when the outstanding balance is fully paid off, resulting in no amount owed.

Zoning Laws

Regulations dictating how real property can be used in specific geographic areas.

Zoning

Governmental rules defining how land can be used within designated areas.