Real Estate Terms
Click on a link below for
an alphabetized list of Real Estate and Mortgage Terms.
An amount owed to another.
The legal document conveying title to a property.
Short for "deed in lieu of foreclosure," this
conveys title to the lender when the borrower is in
default and wants to avoid foreclosure. The lender may
or may not cease foreclosure activities if a borrower
asks to provide a deed-in-lieu. Regardless of whether
the lender accepts the deed-in-lieu, the avoidance and
non-repayment of debt will most likely show on a credit
history. What a deed-in-lieu may prevent is having the
documents preparatory to a foreclosure being recorded
and become a matter of public record.
Deed of trust
Some states, like California, do not record mortgages.
Instead, they record a deed of trust which is essentially
the same thing.
Failure to make the mortgage payment within a specified
period of time. For first mortgages or first trust deeds,
if a payment has still not been made within 30 days
of the due date, the loan is considered to be in default.
Failure to make mortgage payments when mortgage payments
are due. For most mortgages, payments are due on the
first day of the month. Even though they may not charge
a "late fee" for a number of days, the payment
is still considered to be late and the loan delinquent.
When a loan payment is more than 30 days late, most
lenders report the late payment to one or more credit
A sum of money given in advance of a larger amount being
expected in the future. Often called in real estate
as an "earnest money deposit."
A decline in the value of property; the opposite of
appreciation. Depreciation is also an accounting term
which shows the declining monetary value of an asset
and is used as an expense to reduce taxable income.
Since this is not a true expense where money is actually
paid, lenders will add back depreciation expense for
self-employed borrowers and count it as income.
In the mortgage industry, this term is usually used
in only in reference to government loans, meaning FHA
and VA loans. Discount points refer to any "points"
paid in addition to the one percent loan origination
fee. A "point" is one percent of the loan
The part of the purchase price of a property that the
buyer pays in cash and does not finance with
A provision in a mortgage that allows the lender to
demand repayment in full if the borrower sells the property
that serves as security for the mortgage.