CO-MAKER Back to topA second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.
COMMON LAW Back to topAs opposed to statute law. Laws that have been established by custom, usage and courts over many years.
COMMISSION Back to topA percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.
COMMON AREA ASSESSMENTS Back to topFees which are charged to the tenants or owners of properties to cover the costs of maintaining areas shared with other tenants or owners. Commonly found in condominium, PUD or office spaces.
COMMON AREAS Back to topAny areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenants or owners of property near by. Commonly found in condominium, PUD or office spaces.
COMMUNITY PROPERTY Back to topIn many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.
COMPARABLES Back to topAn abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property whose value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.
COMPOUND INTEREST Back to topInterest paid on the principal amount, as well as any accumulated interest.
CONCESSIONS Back to topAdditional value granted by a buyer or seller to entice another party to complete a deal.
CONDEMNATION Back to topThe official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.
CONDENSATION Back to topThe transition of water vapor to liquid. Typically forms in areas of high humidity.
CONDOMINIUM Back to topA development where individual units are owned, but common areas and amenities are shared equally by all owners.
CONDOMINIUM CONVERSION Back to topCommonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.
CONDUIT Back to topThe pipe through which electric wiring is run.
CONSTRUCTION LOAN Back to topA loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.
CONTIGUOUS Back to topConnected to or touching along an unbroken boundary.
CONTINGENCY Back to topSomething that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.
CONTRACT Back to topA legally binding agreement, oral or written, between two parties.
CONVENTIONAL MORTGAGE Back to topA traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).
CONVERTIBLE ARM Back to topA mortgage that begins as and adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.
COOPERATIVE (CO-OP) Back to topA form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.
CORPORATE RELOCATION Back to topA situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.
COST OF FUNDS INDEX (COFI) Back to topAn index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.
COVENANT Back to topA stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.
CREDIT Back to topA loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.
CREDIT HISTORY Back to topA record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.
CREDITOR Back to topA person to whom money is owed.
CREDIT REPORT Back to topA detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.
CREDIT REPOSITORY Back to topLarge companies that gather and store financial and credit information about individuals who apply for credit.
CUL-DE-SAC Back to topA dead-end street. One with only one entrance/exit.
DATE OF APPRAISAL Back to topThe specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.
DEBT Back to topAn obligation to repay some amount owed. This may or may not be monetary.
DEBT EQUITY RATIO Back to topThe ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.
DEED Back to topA document indicating the ownership of a property.
DEED-IN-LIEU (OF FORECLOSURE) Back to topA document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.
DEED OF TRUST Back to topA document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.
DEED OF RECONVEYANCE Back to topA document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.
DEED OF RELEASE Back to topA document which dismisses a lien or other claim on a property.
DEED OF SURRENDER Back to topA document used to surrender any claim a person has to a property.
DEFAULT Back to topThe condition in which a borrower has failed to meet the obligations of a loan or mortgage.
DELINQUENCY Back to topThe state in which a borrow has failed to meet payment obligations on time.
DEPOSIT Back to topCash given along with an offer to purchase property, Also called EARNEST MONEY.
DEPRECIATION Back to topThe natural decline in property value due to market forces or depletion of resources.
DETACHED SINGLE-FAMILY HOME Back to topA single building improvement intended to serve as a home for one family.
DISCOUNT POINTS Back to topPoints paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.
DISTRESSED PROPERTY Back to topA mortgaged property which has been foreclosed on.
DOWNSPOUT Back to topThe pipe that water moves through to reach the ground from the rain gutter.
DUE-ON-SALE PROVISION Back to topA clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.
DUPLEX Back to topA single-building improvement which is divided and provides two units which serve as homes to two families.
DWELLING Back to topA house or other building which serves as a home.
DOWN PAYMENT Back to topAn amount paid in cash for a property, with the intent to mortgage the remaining amount due.
EARNEST MONEY DEPOSIT Back to topA cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
EASEMENT Back to topThe right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.
EAVE Back to topThe part of the roof that extends beyond the exterior wall.
ECONOMIC DEPRECIATION Back to topThe decline in property value caused by external forces, such as neighborhood blight or adverse development.
ECONOMIC LIFE Back to topThe amount of time which any income-producing property is able to provide benefits to its owner.
EFFECTIVE AGE Back to topThe subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.
EMINENT DOMAIN Back to topThe legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.
ENCROACHMENT Back to topA building or other improvement on one property which invades another property or restricts its usage.
ENCUMBRANCE Back to topA claim against a property. Examples are mortgages, liens and easements.
ENERGY EFFICIENCY RATIO Back to topAn efficiency rating system for air conditioning units that corresponds to the number of BTU's output per watt of electricity used.
EQUAL CREDIT OPPORTUNITY ACT (ECOA) Back to topU.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc
EQUITY Back to topThe difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.
EQUITY BUILDUP Back to topThe natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.
ERRORS AND OMISSIONS INSURANCE Back to topAn insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
ESCROW Back to topAn amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.
ESCROW ACCOUNT Back to topAn account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.
ESCROW ANALYSIS Back to topAn analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.
ESCROW DISBURSEMENTS Back to topThe payout of funds from an escrow account to pay property expenses such as taxes and insurance.
ESTATE Back to topThe total of all property and assets owned by an individual.
EXAMINATION OF TITLE Back to topThe report on the title of a property from the public records or an abstract of the title.
EXCLUSIVE LISTING Back to topAn agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.
EXECUTOR Back to topThe person named in a will to administer the estate.
FACADE Back to topThe front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.
FAIR CREDIT REPORTING ACT Back to topA federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.
FAIR MARKET VALUE Back to topThe price at which two unrelated parties, under no duress, are willing to transact business.
FANNIE MAE Back to topA private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.
FASCIA Back to topThe boards that enclose the eaves.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) Back to topThe U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.
FEDERAL HOUSING ADMINISTRATION (FHA) Back to topA sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.
FEE APPRAISER Back to topA certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.
FEE SIMPLE Back to topA complete, unencumbered ownership right in a piece of property.
FEE SIMPLE ESTATE Back to topA form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.
FHA MORTGAGE Back to topA mortgage that is insured by the Federal Housing Administration (FHA).
FINAL VALUE ESTIMATE Back to topThe opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.
FIRST MORTGAGE Back to topThe primary loan or mortgage secured by a piece of property.
FIXED-RATE MORTGAGE (FRM) Back to topA mortgage which has a fixed rate of interest over the life of the loan.
FIXTURE Back to topAny piece of personal property which becomes permanently affixed to a piece of real property.
FLASHING Back to topThe metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.
FLOOD INSURANCE Back to topSupplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.
FLOOR PLAN Back to topThe representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.
FLUE Back to topThe furnace exhaust pipe, usually going through the roof.
FLUSH VALVE Back to topThe valve between the toilet bowl and the tank.
FOOTING Back to topThe partially buried support for a vertical structural member such as a post.
FORECLOSURE Back to topThe process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.
FORFEITURE Back to topThe loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.
FOUNDATION Back to topThe solid structural element upon which a structure is built.
FRONTAGE Back to topThe segment of a property that runs along a point of access, such as a street or water front.
FUNCTIONAL OBSOLESCENCE Back to topA decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.
GABLE ROOF Back to topA steeply angled, triangular roof.
GALVANIZED PIPE Back to topIron pipe with a galvanized (zinc) coating.
GAMBREL ROOF Back to topA ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.
GENERAL LIEN Back to topA broad-based claim against several properties owned by a defaulting party.
GEORGIAN Back to topA classic, English-style hose characterized by simple rectangular shape and multiple stories.
GFI Back to topGround Fault Interrupter. A type of circuit breaker required in areas where water is present.
GINNIE MAE Back to topA wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.
GIRDER Back to topA main supporting beam.
GOVERNMENT MORTGAGE Back to topAny mortgage insured by a government agency, such as the FHA or VA.
GRADE Back to topThe slope of land around a building. Also ground level.
GRANTEE Back to topAny person who is given ownership of a piece of property.
GRANTOR Back to topAny person who gives away ownership of a piece of property.
GROSS AREA Back to topThe sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.
GROUTING Back to topMaterial used around ceramic tile.
GUTTER Back to topThe trough around the edge of the roof that catches and diverts rain.
HALF-SECTION Back to top320 acres.
HAZARD INSURANCE Back to topInsurance covering damage to a property caused by hazards such as fire, wind and accident.
HEADER Back to topThe framing elements above an opening such as a window or door.
HEARTH Back to topThe floor of a fireplace or the area immediately in front of it.
HEIGHT ZONING Back to topA municipal restriction on the maximum height of any building or other structure.
HIDDEN AMENITIES Back to topAssets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.
HIGHEST AND BEST USE Back to topThe most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.
HOME EQUITY CONVERSION MORTGAGE (HECM) Back to topAlso known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM's typically do not have to be repaid until the borrower is no longer occupying the home.
HOME EQUITY LINE OF CREDIT Back to topA type of mortgage loan that allows the borrower to draw cash against the equity in his home.
HOME INSPECTION Back to topA complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.
HOME INSPECTOR Back to topA person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.
HOMEOWNER'S ASSOCIATION Back to topAn organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.
HOMEOWNER'S INSURANCE Back to topA policy which covers a home owner for any loss of property due to accident, intrusion or hazard.
HOMEOWNER'S WARRANTY Back to topAn insurance policy covering the repair of systems and appliances within the home for the coverage period.