Glossary of Terms
A - D, E - H, I - L , M - P, Q - T, U - Z

Qualifying Ratio - A ratio calculated by a lender to determine how much a potential buyer can borrow.

Quiet Enjoyment - right of an owner or any other person legally entitled to possession to the use of the property without interference.

Quiet Title Action - a suit in court to remove a defect or cloud on the title, establishes legal ownership.

Quitclaim Deed - a deed that conveys only the grantor’s rights or interest in a property, without stating the nature of the rights or interest and with no warranties of ownership.

Quitclaim Deed - A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

Rate Cap - The maximum interest rate charge allowed on the monthly payment of an adjustable rate mortgage during an adjustment period.

Rate-Improvement Mortgage - A loan with a clause that entitles a borrower to a one-time interest rate cut without going through refinancing.

Real Estate Owned (REO) - property acquired through a lender through foreclosure and held in inventory.

Real Property - the rights to use real estate.

Realtor - designation given to licensed real estate agents who are members of the National Association of Realtors.

Recission Period - a federally mandated period of three business days (beginning on the day after a loan closes) during which the borrower may cancel the new loan, waiting period only applies to loans which are to be secured by a mortgage on a personal residence for which the borrower is in title at the time of loan origination, right to cancel does not apply to loans used for the purchase of property.

Recourse - ability of lender to make claims against borrower personally in addition to the collateral.

Redemption Period - period during which a former owner can reclaim foreclosed property.

Refinance - process of a borrower paying off one loan with the proceeds from another.

Regression - The principle that the value of a better-quality property is adversely affected by the proximity of a lesser-quality property.

Regulation Z - federal regulation requiring creditors to provide full disclosure of the terms of a loan.

Residential Service Contract - home warranty or insurance contract, generally for one year, covering plumbing, electrical, and mechanical systems of the home.

Residual - Value or income remaining after deducting an amount necessary to meet fixed obligations.

Reverse Mortgage - A type of mortgage designed for elderly homeowners with substantial equity by which a lender pays a periodic payment to the borrower; the loan balances increase with interest and payments causing negative amortization.

Right of First Refusal - opportunity of a party to match the terms of a proposed contract before the contract is executed.

Sale Leaseback - sale of property by seller and simultaneous leasing of the same property by seller.

Sandwich Lease - lease held by a lessee (tenant) who becomes a lessor (landlord) by subletting to another lessee (subtenant), typically the sandwich leaseholder is neither the owner nor the user of the property.

Seasoning - loan which has been in force for a period of time thus establishing the borrower’s payment history, loans are tyically deemed to be seasoned after either six months or one year.

Second Mortgage - mortgage recorded after another mortgage has already been recorded and not yet released, subordinated lien.

Section 1031 - section of the Internal Revenue Code dealing with tax-free exchanges of like-kind property.

Section 8 - privately owned rental dwelling units participating in the low-income rental assistance program created by 1974 amendments to Section 8 of the 1937 Housing Act.

Security Deposit - cash payment required by landlord to be held during the term of the lease to offset damages incurred due to actions of the tenant.

Seller Financing - also known as Owner Financing.

Settlement Statement - also known as Closing Statement or HUD-1.

Short Sale - A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes

Special Warranty Deed - deed in which the grantor limits the title warranty given to the grantee, does not warrant against title defects arising from conditions that existed before grantor owned the property.

Specific Performance - legal action in which the court requires a party to a contract to perform the terms of the contract.

Subject To - buyer takes title to mortgaged real property but is not personally liable for the payment of the amount due, buyer must make payments in order to keep the property.

Subordination - a clause or document that permits a mortgage recorded at a later date to take priority over an existing lien.

Survey - process by which a parcel of land is measured and its area ascertained.

Tax and Insurance Escrow - account required by a mortgage lender to fund annual property tax assessments and hazard insurance premiums, funded through monthly contributions by the mortgagor

Tax Lien - a debt attached to the property for failing to pay taxes

Teaser Rate - contract interest rate charged on an adjustable rate mortgage for the initial adjustment interval that is significantly lower than the fully indexed rate at the time

Terms - conditions and arrangements specified within a contract

Time is of the Essence - a phrase that, when inserted in a contract, requires that all references to specific dates and times of day noted in the contract be interpreted exactly, in its absence extreme delays might be acceptable

Title - evidence of ownership, evidence of lawful possession

Title Defect - an unresolved claim against the ownership of property, prevents seller from providing buyer clear title to the property

Title Insurance - an insurance policy that protects the holder from loss sustained by defects in the title

Title Search - an examination of the public records to determine the ownership and encumbrances affecting real property

Title Theory State - the system in which the lender has legal title to the mortgaged property and the borrower has equitable title. Texas is not a title theory state. Contrast with lien theory state.

Triple Net Lease - lease in which the tenant is to pay all operating expenses of the property so that the landlord receives net rent, frequently used to mean tenant pays taxes, insurance, and maintenance in addition to normal operating expenses

Trust - an arrangement whereby property is transferred to a trusted third party trustee by a grantor/trustor, trustee holds the property for the benefit of the beneficiary

Trust Deed - conveyance of real estate to a third party to be held for the benefit of another, commonly used in some states in place of mortgages that conditionally convey title to the lender, same as Deed of Trust

Trustee - one who holds property in trust for another to secure performance of an obligation, the neutral party in a trust deed transaction.

Glossary of Terms
A - D, E - H, I - L , M - P, Q - T, U - Z