Today's Real Estate and Mortgage Terms

It is important to understand real estate terminology when buying or selling a home. Below is a list of commonly-used real estate terms.   Let us know if you need assistance with a concept you don't find here. We are always adding to the site.

As is
Implied in most Agreements of Purchase and Sale, suggests the buyer is accepting the property in it present state and relinquishes and responsibility from the buyer.
 
ARM
A mortgage whose interest rate is raised or lowered at periodic intervals according to the prevailing interest rates in the market.
 
Bank-owned/REO
Real property owned by a bank/mortgage company. Generally considered a REO when the property has not been successfully sold a a deed of trust or foreclosure auction.
 
Bankruptcy
a) A person who has done any of the acts that by law entitle his creditors to have his estate administered for their benefit; b) a person judicially declared subject to having his estate administered under the bankrupt laws for the benefit of his creditors; c) a person who becomes insolvent.
 
Bid
To offer (a price) whether for payment or acceptance.
 
Credit Risk
An estimate of the amount of credit that can be extended to a company or person without undue risk.
 
Credit Union
A cooperative organization that makes loans to its members at low interest rates.
 
Deed in Leiu(of Foreclosure)
When the borrower is in default and wants to avoid foreclosure, the borrower conveys title of he property to the current lender.  This does not guarantee that the lender does not report the transaction as a non-payment on the borrower's credit report. 
At best it avoids the public recording of a foreclosure transaction.
 
Deed of Trustee Sale
The Arizona alternative to foreclosure sale.

Home Equity Loan
A loan or credit line that is secured by the equity the borrower has in a home.
 
Home Loan
a) Money lent at interest; b) something lent usually for the borrower's temporary use.
 
Interest Rate
The percentage usually on an annual basis that is paid for the use of money borrowed from another
 
Loan modification
Restructuring mortgage payments to make them affordable.  Can include reducing principal, interest rate or monthly payments.  See Making Home Affordable for federal program details. http://www.makinghomeaffordable.gov/
 
Market Value
An asset's market value is the price it would fetch in the market, if it were sold in the current marketplace.
 
Mortgage
A temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt.
 
Prime Rate
The lowest rate of interest on bank loans at a given time and place, offered to preferred borrowers
 
Property Tax
A tax levied on real or personal property
 
Short Sale
Lender agrees to accept a mortgage payoff that is less than the balance owed.
 
Title Insurance
A type of insurance which guarantees the ownership and quality of title to land.