Home Finance Glossary of Terms Print E-mail
1.    Accelerate - An option given to lenders through an "acceleration" clause in the mortgage or deed of trust requiring the borrower to pay the entire balance of the loan all at once if their loan is in default.
2.    Acceptance -  When the seller's or agent's principal agrees to the terms of the agreement of sale, approves the negotiation on the part of the agent, and acknowledges receipt of the deposit in subscribing to the agreement of sale, that act is termed the acceptance.
3.    Accrued Items of Expense - Those incurred expenses that are not yet payable. The seller's accrued expenses are credited to the purchaser in the closing statement.
4.    Adjustable Rate Mortgage - A loan that has an interest rate that can go up or down at certain intervals, called periods, and within certain limits, called caps. The loan is secured by a house, on which the lender will foreclose if the loan is not paid.

5.    Affidavit - A sworn statement in writing usually given while under oath or in the presence of a notary.
6.    Alienation - The transferring of property from one person to another.

7.    Alienation Clause - (Acceleration Clause; Due on Sale Clause) A clause that states that upon sale or transfer of certain property, a loan is immediately due and payable.

8.    All-Inclusive Deed or Trust - (Wrap Around Contract) A form of deed of trust that, in addition to any other amounts actually financed, includes the amounts of any prior deeds of trust.

9.    Amortization - The repayment of a debt in installments.

10.  Amortization Mortgage - A debt, of which the periodic repayments are used to reduce the principal outstanding as well as paying off the current interest charges.

11.  Appraisal - The process in which a licensed or authorized person gives an estimate of property value.
12.   Appreciation - When the market value or price of a property increases over time.

13.   Arrears - An unpaid, overdue debt or payment.

14.  Assessor - An official who has the responsibility of determining assessed valuation.

15.  Assessors Parcel Number - A number assigned by the county tax assessor to identify a parcel of real property.

16.  Assignment - The transfer of property to be held in trust or to be used for the benefit of the creditors (lenders).
17.  Assets - All things owned, including land, home, car, shares, furniture etc owned by a person
18.  Bid - The offered amount for a property for sale at auction.
19.  Balance Owed on the Loan - The part of the original loan that remains unpaid by the borrower at a given point in time.
20.  Balloon Payment - A final installment payment, larger than previous installments that pays off a debt.

21.  Bankruptcy - An action filed in a federal bankruptcy court that allows a creditor to reorganize or discharge credit obligations due to insolvency. A property owner may restrain foreclosure action by filing bankruptcy.

22.  Bearer - Lender in whose hands the promissory note remains until it is paid in full.

23.  Beneficiary - (1) One entitled to the benefit of a trust: (2) One who receives profit from an estate, the title of which is vested in a trustee: (3) The lender on a security of a note and deed of trust.

24.  Beneficiary Statement - ("Benny Statement") A written statement of the conditions and remaining balance of a loan secured by a deed of trust.

25.  Bill of Complaint - The initial paperwork filed in many states to begin a foreclosure. It is part of the process of filing a lawsuit.

26.  Bill of Sale - A document by which title to personal property is passed from seller to buyer.

27.  Bond - A set sum of money or assets that are available if needed to pay to a court or other named person upon a certain event.

28.  Capitol Improvement - A permanent structure erected to extend the useful life and value of a property. (The replacement of a roof would be considered a capital improvement.)

29.  Certificate of Sale - A document given to the winning bidder at a foreclosure sale stating their rights to the property once the borrowers redemption period has expired.
30.   Certificate of Title - An official legal document detailing who owns the land and any restrictions that may be placed on dealings with the land.

31.  Chattel - Personal property, such as household goods or fixtures.

32.   Chattel Mortgage - A mortgage on personal property.

33.  Clear Title - A title that is not burdened with defects.
34.   Comparison interest rate - The adjusted interest rate for a home loan adjusted to include all definitive non-statutory upfront fees and ongoing fees for the home loan product.

35.   Conditional approval - An initial approval given on a home loan application, subject to further information and documentation being supplied by the applicant.

36.  Conforming Loans - Loans that meet FNMA standards.

37.   Contract - A legally binding agreement between two or more parties.

38.  Covenants - Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or restrictions on the property.

39.  Credit Bid - A bid on behalf of the lender at a foreclosure sale. The bid amount must be less than or equal to the balance of the loan in default.
40.   Credit history - A record of how an individual has borrowed money and has repaid debt. This helps to determine whether a potential borrower is likely to be able to repay their loan in a timely manner.

41.  Cured Default - Correction of a borrower's failure to make payments or meet the terms of a loan to the lender's satisfaction.

42.   Debt servicing ratio - A calculation used to determine if you can afford the amount that you want to borrow. It is based on your debt expenses shown as a percentage of your monthly income.

43.  Decree - A judicial decision.
44.  Deed - A signed document that transfers ownership of property from one party to another.
45.  Deed-in-lieu of Foreclosure - Instead of waiting until the lender forces the sale of the house in foreclosure, usually to the lender, the borrower just deeds the property to the lender.
46.  Deed of Trust - A three party security instrument conveying the legal title to real property as security for the repayment of a loan. The three parties included in a deed of trust are the borrower, lender and trustee.
47.  Default - A mortgage or deed of trust is said to be in default when the borrower fails to make the payments as agreed to in the original promissory note.
48.  Deficiency Judgment - A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.
49.  Equitable Title - The present right to possession with the right to acquire legal title once a preceding condition has been met.
50.  Equity Loan - Junior (subordinate) loan based on a percentage of the equity.

51.  Escrow - A deposit held ready for some use, such as to pay taxes and insurance on a mortgaged property.

52.  Eviction - The legal procedure to have a tenant forcibly removed from a dwelling.

53.  Exclusive Right to Sell - An agreement to give, for a specified period, only one broker the right to sell. If a sale during the term of the agreement is made by the owner or by any other broker, the broker holding the exclusive right is entitled to compensation.

54.  Extension Agreement - An agreement that extends the life of a mortgage.

55.  Fair Market Value - The price a property would sell for on the open market.
56.  Foreclosure - The forced sale of property pledged as security for a debt that is in default.
57.  Free & Clear - Ownership of property free of all indebtedness.
58.              Guarantee - Our promise to you is that we will beat any current or approved bank home loan rate, guaranteed* and save you money at the same time.
*Applies to comparison rates for existing or approved standard variable bank loans excluding limited time and honeymoon offers. Normal lending criteria apply.
59.  Impound Account - An account held by the lender that is used for him or her to advance payments of certain expenses or charges that are incidental to property ownership and that may protect the lender's security.
60.              Interest rate - The rate at which interest is calculated as a percentage of the money you have borrowed (your home loan).
61.  Involuntary Lien - A lien imposed against property without consent of the owner, e.g., taxes, special assessments.

62.  Judicial Foreclosure - A foreclosure that is processed by a court action.
63.  Lien - A charge upon real or personal property for the satisfaction of a debt.
64.  Legal Description - A formal description of real property sufficient to locate it by reference to government surveys or approved recorded maps.
65.  Lender - A person who lends money for temporary use on condition of repayment with interest (i.e., the bank, mortgage company, etc.).
66.              Lenders Mortgage Protection (LMP) - Arrangement that protects the lender, but is paid for by the borrower, to cover the lender if the borrower defaults on their loan, and the proceeds of the sale of the mortgaged property do not cover the outstanding amount.
67.  Lien - The right to force the sale of property to pay a debt.

68.  Lienholder - A person or institution that controls a lien.