FOR SALE: A written document in which the purchaser agrees
to buy certain real estate and the seller agrees to sell under
certain stated terms and conditions.
To reduce debt by means of regular periodic payments, which
include amounts applicable to both principal and interest.
An increase in value of real property.
OF MORTGAGE: Assumption by the buyer of the primary liability
for payment of an existing mortgage or deed of trust, which
the seller remaining secondarily liable for the obligation
The conclusion or consummation of a real estate transaction.
Closing includes the delivery of deed, financial adjustment,
the signing of notes and disbursement of funds necessary to
the sale or loan transaction.
Written instrument duly executed and delivered by which the
title to land is transferred from one person to another.
TRUST: A conveyance of a land title by a marker or a note
(the debtor) to a third party, a trustee, as collateral security
for the payment of the note whit the condition that the trustee
shall reconvey the title to the debtor upon payment of the
note, and with power in the trustee to sell the land and pay
the note in the event of default on the part of the debtor.
POINTS: The amount of money the borrower or seller must pay
the lender to get a mortgage at the stated interest rate.
This amount is equal to the difference between the principal
balance on the note and the lesser amount which a purchaser
of the note would pay the original lender under market conditions.
A point equals one percent of the loan.
PAYMENT: The difference between the sale price of real estate
and the mortgage amount.
The difference between fair market value and current indebtedness,
usually referring to the owner’s interest.
HOUSING ADMINISTRATION (FHA): A division the Department of
Housing and Urban Development, the FHA’s main activity
is the insuring of residential mortgage loans made by private
A written document containing the conditions under which the
possession and use of real property are given by the owner
to another for a stated period and for stated consideration.
The use of borrowed money to increase one’s return on
A claim or charge on property held by another for payment
of some debt, obligation or duty.
VALUE: The highest price that a buyer, willing but not compelled
to buy, would pay, and the lowest a seller, willing but not
compelled to sell, would accept.
Instrument whereby an owner conditionally transfers title
of his property to another as security for payment of a debt.
The owner retains possession and use of the land and, upon
debt payment, the mortgage becomes void. Note: A written promise
to pay a certain amount of money at a certain time, in a certain
number of installments. It usually provides for payment of
interest and its payment is at times secured by a mortgage.
POLICY: A title insurance policy insuring the owner against
loss due to any defect of title not excepted to or excluded
from the policy.
INTEREST, TAXES, INSURANCE (PITI): The principal and interest
payment on most loans is fixed for the term of the loan: the
tax and insurance portion may be adjusted to reflect changes
in taxes or insurance costs.
The repayment of a debt for the proceeds of a new loan using
the same property as security.
FINANCING: Financing real estate with a loan or loans that
are subordinated to a first mortgage or first trust deed.
EQUITY: Equity created in property by the performance of work
or labor by the purchaser or borrower. It directly increases
the value or the property.
BY THE ENTIRETIES: A form of ownership existing in many states
where husband and wife together are treated as an entirety.
ADMINISTRATION (V.A.): An independent agency of the federal
government. The Veterans Administration Home Loan Guaranty
Program is designed to encourage lenders to offer long term,
low down payment mortgages to eligible veterans by guaranteeing
the lender against loss.
INCLUSING TRUST DEED: a mortgage that secures a debt which
includes the balance due on an existing senior mortgage and
an additional amount advanced by the wraparound mortgagee
who then makes the payment on the senior mortgage.