Amortization
Liquidating or reducing the principal on a mortgage loan by making
mortgage payments over a specific period of time.
Assumption
The act of taking over a mortgage obligation incurred by the original
borrower. The new owner assumes the mortgage obligations and assumes title to
the property.
Blanket Mortgage
A mortgage which may use two or more pieces of real estate for security on a
single loan.
Bridge Loan
A short term loan secured by a trust deed or mortgage designed to help a
borrower quickly obtain the necessary cash to purchase and/or develop a
property while the borrower works on permanent financing.
Deed Of Trust
An instrument used to pledge real estate as collateral (security) for a loan.
Some states use a deed of trust while others use a mortgage as security for a
mortgage loan.
Default
The failure of a duty or obligation, such as the failure to make the required
payments called for in a mortgage note. Loan default may cause foreclosure.
Equity
The value a property owner has in real estate once the obligations (liens) and
costs of selling are deducted.
Escrow Account
Funds which are set aside and held in trust by a third party, usually to pay
taxes and insurance on real estate.
Foreclosure
A legal process by which a lender enforces a defaulted mortgage loan by
exercising a power of sale on the mortgaged property.
Interim Financing
A temporary construction loan made during the completion of a home or building,
which is usually replaced by a permanent loan after completion and/or sale of
the property.
Loan To Value Ratio (LTV)
The ratio or relationship between the amount of a mortgage loan and the value
of the property, expressed as a percentage.
Market Value
The value of a property determined by comparable sales, or the actual sale
price.
Mechanics Lien
A lien placed on a property as security for payment for work performed and
materials supplied in the construction of the property.
Mortgagor
The owner of real property pledging the property as collateral (security) for a
mortgage loan by a mortgagee (lender), usually in the purchase of the real
property.
Note (also, Promissory Note)
The signed promise to pay, or obligation to repay a debt, such as a mortgage
note.
Principal
The original amount borrowed as evidenced by a promissory note.
Quit Claim Deed Quit
The deed (or instrument) by which one conveys or transfers to another any
interest or title one may have in real property.
Satisfaction Of Mortgage (Reconveyance)
Also called a "release of mortgage," a document issued by the lender when the
mortgage is paid in full.
Title Insurance
Insurance issued to an owner and/or lender on real property to protect against
claims arising by reason of defects, clouds and liens on the title to the
property.
Yield
A return on an investment, which includes the interest rate charged, discount
points paid and any other charges collected.