GLOSSARY OF TERMS
QUALIFYING RATIOS: Guidelines applied by lenders to determine how large a loan to grant a home buyer.
QUITCLAIM: A deed, which transfers whatever interest, the maker of the deed may have in the particular parcel of land. A quitclaim deed is often given to clear the title when the grantors interest in a property is questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has. (See Deed.)
RADON: A radioactive gas found in some homes that in sufficient concentrations could cause health problems.
RATE CAPS: (Also called Interest Rate Caps). A limit on the amount of which the interest rate charged to the borrower can be changed.
RATE LOCK: A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time.
REAL ESTATE BROKER: A middleman or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.
REAL ESTATE OWNER (REO): A term frequently used by lending institution as applied to ownership of real property acquired for investment or as a result of foreclosure.
RESPA: (Real Estate Settlement Procedures Act). A Federal law that requires lenders to provide home mortgage borrowers with information about known or estimated settlement costs.
REAL PROPERTY: Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.
REALTOR: A real estate broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.
RECISSION: The cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent.
RECORDING: The noting in the registrar?s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.
REHABILITATION MORTGAGE: A mortgage created to cover the costs of repairing, improving, and sometimes acquiring an existing property.
REMAINING BALANCE: The amount of principal that has not yet been repaid.
REMAINING TERM: The original amortization term minus the number of payments that have been applied.
REPAYMENT PLAN: An arrangement made to repay delinquent installments or advances. Lenders formal repayment plans are called relief provisions.
REPLACEMENT RESERVE FUND: A fund set aside for replacement of common property in a condominium, PUD, or cooperative project particularly that which has a short life expectancy, such as carpeting, furniture, etc.
RESTRICTIVE COVENANTS: Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may run with the land, binding all subsequent purchasers of the land, or may be personal and binding only between the original seller and buyer. The determination whether a covenant runs with the land or is personal is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area. (This latter discriminatory covenant is unconstitutional and has been declared unenforceable by the U.S. Supreme Court.)
REVOLVING LIABILITIES: A credit arrangement, such as a credit card, that allows a customer to borrow against a pre-approved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.
RIGHT OF FIRST REFUSAL: A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
RIGHT OF INGRESS OR EGRESS: The right to enter or leave designated premises.
RIGHT OF OWNERSHIP: In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
RTC: (Resolution Trust Corporation). Formed to resolve thrift failures over the next three years and dispose of their assets and liabilities.
SALES AGREEMENT: See Agreement of sale.
SECOND MORTGAGE: A mortgage that has rights that are subordinate to the rights of the first mortgage holders.
SECONDARY MORTGAGE MARKET: The buying and selling of existing mortgages.
SELLER-PROVIDED FUNDS: (Also called Seller Contributions). Seller-provided funds include all transaction cost paid by the seller except the real estate agents (or brokers) fee.
SERVICER: The party who has entered into an agreement with the insured to service a loan.
SETTLEMENT COSTS: See Closing Costs.
SINGLE PREMIUM: A premium, which provides coverage for more than a year.
SPECIAL ASSESSMENTS: A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, streetlights, etc.
SPECIAL LIEN: A lien that binds a specified piece of property, unlike a general lien, which is levied against all ones assets. It creates a right to retain something of value belonging to another person as compensation for labor, material, or money expended in that persons behalf. In some localities it is called particular lien or specific lien. (See Lien.)
SPECIAL WARRANTY DEED: A deed in which the grantor conveys title to the grantee and agrees to protect the grantee against title defects or claims asserted by the grantor and those persons whose right to assert a claim against the title arose during the period the grantor held title to the property. In a special warranty deed the grantor guarantees to the grantee that he has done nothing during the time he held title to the property which has, or which might in the future, impair the grantees title.
SURVEY: A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description.
