A measurement that is a quarter section of a circle, also one of the quarters that is created by two intersecting roads or streets.
Qualification
The process that determines an applicant's financial ability to meet the terms of the loan.
Qualifying Ratios
Guidelines applied by lenders to determine how large a loan to grant a homebuyer.
Quantity Survey Method
A method of arriving at an estimate of costs for new construction by a detailed estimate of quantities of necessary building materials plus labor costs.
Quarter Section
A measurement of a quarter of a section and contains 160 acres.
Quietus
The final disposition of a debt or a claim.
Quitclaim Deed
A deed that transfers whatever interest or title a grantor may have, without warranty.
A radioactive gas found in some homes that in sufficient concentrations could cause health problems.
Rate
The annual rate of interest on a loan, expressed as a percentage of 100.
Rate and Term Refinance
Paying off an existing loan with the proceeds from a new loan, using the same property as collateral.
Rate Caps
(Also called 'Interest Rate Caps'). A limit on the amount of which the interest rate charged, either at each adjustment period or over the life of the loan.
Rate Index
An index used to determine interest rate changes for certain adjustable rate mortgages (ARM).
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.
Ratification
The affirmation of a prior act that was not legally binding and making it a legal effect.
Raw Land
Land without added improvements such as sewers, utilities, streets, or structures.
Real Estate
Land and permanently affixed items such as buildings, fences, etc.
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 Investment Trust (REIT)
A mutual fund that sells shares of ownership and must be invested in real estate or mortgages.
Real Estate Market
A market for potential buyers or sellers of real property at a given time.
Real Estate Owned
(REO). A term frequently used by lending institution as applied to ownership of real property acquired for investment or as a result of foreclosure.
Real Estate Settlement Procedures Act (RESPA)
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.
Rebate Compensation
received from a wholesale lender, which can be used to cover closing costs, or as additional revenue for the broker. Loans with rebates often carry higher interest rates.
Recapture of Depreciation
Upon the sale of a property, the amount of depreciation taken above straight-line depreciation.
Recasting
Revision of the terms of an existing mortgage to cure delinquency, such as extending the loan or modifying the interest rate.
Recission
The cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent.
Reconveyance
A transfer of title from a trustee to the owner of real estate, when the title is held as collateral, at the time the trust deed is paid in full.
Recorder
The public official who keeps records of transactions that affects real property in the area.
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.
Recording Fee
Fee charged by a government for entering into the public record a real estate purchase or sale.
Redemption
A defeasable title to land that is cancelled by a mortgage foreclosure or tax sale of the property.
Redemption Period
The period of time allowed during which an owner may buy back their foreclosed properties by paying all delinquent mortgage payments, plus interest and fees. The time period varies state by state.
Refinancing
The process of paying off one loan with the proceeds from a new loan using the same property as security.
Rehabilitation Mortgage
A mortgage created to cover the costs of repairing, improving and acquisition of an existing property.
Rehabilitation Tax Credit
The Tax Reform Act of 1986 allows a 20% tax credit for rehabilitating historic structures and 10% for buildings in service after 1936.
Reinstatement
Bringing a note, mortgage, deed of trust, etc. from default to good standing.
Release of Mortgage
A document distributed by the mortgagee when the mortgage loan has been paid in full.
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.
Renegotiable Rate Mortgage
See "Adjustable Rate Mortgage (ARM)"
Rent Step-Up
An agreement in which the rent increases every period for a certain amount of time or for the duration of the lease.
Repayment Plan
An arrangement made to repay delinquent installments or advances. Lenders' formal repayment plans are called 'relief provisions.'
Replacement Reserves Funds
A fund set aside from net operating income (NOI) to pay eventual wear and tear of a property. Amount is determined by property type. Normal reserves on a multi-family would be $250-$350 per unit, and on retail deals it is usually done by square foot.
Residential Mortgage Credit Report (RMCR)
A report requested by your lender that utilizes information from at least two of the three national credit bureaus and information provided on your loan application.
Residual Income
The amount of money remaining after mortgage payment and all other debts are paid: typically used with VA loans.
Restraint of Alienation
Any restriction placed against the vesting/sale of a property. Some restrictions are allowed, but must conform to the rule against perpetuities and free right of an owner to sell.
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. In the determination of whether a covenant runs with the land, or is personal property 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).
Reverse Mortgage
An arrangement in which a homeowner borrows against the equity in his/her home and receives regular monthly tax-free payments from the lender.
Revolving Credit
Open lines of credit that are subject to adjustable payments in accordance with the balance, such as credit cards.
Revolving Liability
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 Survivorship
In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
Right of Way
Land set aside as an easement or in fee, either by agreement or condemnation, to have the right to be on or travel on.
RTC (Resolution Trust Corporation)
Formed to resolve thrift failures over the next three years and dispose of their assets and liabilities.
Rural Housing Service (RHS)
A U.S. Department of Agriculture program that provides various financing programs to aid in the development of rural America.
A clause in a listing that protects the broker from having buyer and seller wait until the listing expires to make a deal, thereby avoiding paying the commission.
Sale/Lease Back
When a lender purchases a property and leases it back to the seller for a specified amount of time.
Sales Agreement
See Agreement of sale.
Sales Comparison Approach
A method of appraising a property by comparing recent sales of comparable properties and making the necessary adjustments for any differences.
Satisfaction of Mortgage
A document distributed by the mortgagee when the mortgage loan has been paid in full. Also referred to as "release of mortgage."
Savings and Loans
Institutions that are chartered to hold savings and make real estate loans, as well as offer checking accounts, consumer loans, and other services offered by banks.
Seasoned Mortgage
A mortgage where the borrower has made consistent payments for a year or longer.
Second Mortgage
A mortgage that has rights subordinate to the rights of the first mortgage holders. Can be for purchase or refinance, concurrent or stand alone.
Secondary Financing
Any additional financing liened against a property, after the primary or first lien. If the property is foreclosed on, proceeds from the sale of the property will be used to pay off the existing liens in the order that they are recorded on the title. For that reason, a lender considers secondary financing to be riskier than a first lien position loan.
Secondary Mortgage Market
The buying and selling of existing mortgages.
Self-Amortization
Occurs when monthly payments allow a loan to be repaid, including principal and interest, over its terms without any balloon payments.
Seller Carry-Back
An agreement in which the owner of a property provides secondary financing in combination with a lender first.
Seller Contributions
Seller provided funds include all allowable transaction costs to be paid by the seller.
Seller-Provided Funds
(Also called 'Seller Contributions'). Seller-provided funds include all allowable transaction costs to be paid by the seller.
Separate Property
Real property that is owned by one person exclusive of any interest of another person.
Servicer
The party who has entered into an agreement with the insured to service a loan.
Servicing Fee
The monthly or yearly fee made by a lender to the correspondent lender who originally made the loan for the servicing of the loan. Servicing rights may be bought or sold with the loan.
Settlement (Closing)
The process by which all financial dealings and contractual arrangements are completed for the buyer and seller. At the time of settlement, or closing, all debts are paid, adjustments made, and money disbursed, and a deed is prepared in the new owner's name.
Settlement Costs
See Closing Costs.
Shared Appreciation Mortgage (SAM)
A mortgage in which a borrower receives an interest rate below the market rate, in return, the lender (or another investor) shares part of the future property value appreciation.
Simple Interest
Interest that is calculated only on the principle balance.
Simple Premium
A premium which provides coverage for more than a year.
Simultaneous Closing
A first and second lien position loans that close at the same time.
Single Premium
A premium which provides coverage for more than a year.
Singlewide
A mobile home consisting of one complete unit.
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 one's assets. It creates a right to retain something of value belonging to another person as compensation for labor, material, or money expended in that person's 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 grantee's title.
Spread
The difference between the rate at which the money can be borrowed (wholesale) and the rate at which it is loaned (retail). It can also mean the difference between the price offered by a buyer and the price asked for by the seller of a property.
Stated Documented Income
Some loan products require only that applicants 'state' the source of their income without providing supporting documentation such as tax returns.
Step-Rate Mortgage
A mortgage program that allows for the interest rate to increase on a particular schedule. At the end of the specified period, the rate and payments stay the same for the remainder of the loan.
Stick Built
A residential home that is built on site, from the ground up, from a pre-determined set of plans and materials.
Sub-prime
Credit with higher risk characteristics, such as slow pays, bankruptcy, or collection accounts.
Sublease
A lease agreement between the lessee and a third party for a term no longer than the remaining portion of the original lease.
Subordination Agreement
An agreement where a prior lien agrees to take a lesser position to a new lien.
Subprime Lender
A Lender that makes loans to borrowers on real estate who have credit with higher risk characteristics, such as slow pays, bankruptcy, or collection accounts.
Subprime Lenders
Lenders that make loans to borrowers on real estate who have credit with higher risk characteristics, such as slow pays, bankruptcy, or collection accounts.
Suburban
A description of a town or an unincorporated, developed area that has a close proximity to a city. Largely residential and dependent on the closest city for employment, etc.
Super Jumbo Loan
A loan amount that is over 1 million dollars
Surface Rights
The rights (easements) to use the surface of the land. If subsurface rights are involved, the right also to drill or mine beneath the surface.
Survey
1. A professional examination of a property. A survey usually will reveal the size of a property, its boundary distances, ground contours, and where improvements or alterations have been made. 2. A print showing the measurements of the boundaries of a parcel of land, together with the location of all improvements on the land and sometimes its area and topography.
Swap Spread
Exchanging one asset or liability for a similar asset or liability to either lengthen or shorten maturities, or raise or lower coupon rates.
Sweat Equity
The equity produced by a purchaser doing work on a property being built.
