Abatement
The termination of an offensive activity, as the abatement of a nuisance.

Abstract of title
A condensed compilation of the history of the title to a piece of property; starts with the original grant and contains all subsequent conveyances, liens, or other encumbrances.

Abut
To be next to or touch another property or body of water.

Acceleration Clause
A provision in a note, such that if payments are in default, the owner of the note can declare the entire balance due and payable earlier than the stated due date.

Acceptance
An act by which a grantor receives a deed with the intention of retaining it in order to vest himself with title to the real estate; an express or implied indication of willingness to be bound to the terms of an offer to contract.

Access
The right of a property owner to have a means of entry and exit from his property to a public street.

Accretion
Addition to land by deposit of soil or sand as a result of natural action by stream, lake, river, or sea.

Accrued Depreciation
The actual depreciation in a property that has already accrued as of a given date; past depreciation.

Acknowledgment|
The process whereby a person goes before a notary public or other recognized officer and executes a legal document and at the same time declares that he is executing the document as a free and voluntary act.

Acre
A measure of land equal to 43,560 sq. ft.

Action
A court process to enforce a right.

Actual age
The number of years a building has been in existence; chronological age.

Acceptance
An offeree's consent to enter into a contract and be bound by the terms of the offer.
   
Additional principal payment
A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.
   
Adjustable-rate mortgage (ARM)
A mortgage that permits the lender to adjust its interest rate periodically on the basis of changes in a specified index.
   
Adjusted basis
The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken.
   
Adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).
   
Adjustment period
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

Administrator
A person appointed by a probate court to handle the estate of a deceased person who left no will.

Ad valorem
According to value.

Adverse possession
The continuous, visible, hostile use or occupation of the property of another may allow title to be acquired by that person through adverse possession if used continuously for a period prescribed by law.  Twenty years in Massachusetts.

Affordability analysis
A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration your income, liabilities, and available funds, along with the type of mortgage you plan to use, the area where you want to purchase a home, and the closing costs that you might expect to pay.

After Acquired Title
A doctrine under which a prior grantee automatically obtains title to real estate acquired by a grantor who previously attempted to convey title which he did not in fact own.

Agency
The relationship between a principal and agent whereby the agent represents the principal in dealing with third parties.

Agent
A person who has authority to act for another.

Air rights
A landowner's right to the use and enjoyment of the space above his land to the extent that he can effectively enjoy it.

Alienate
To convey or transfer title to property.

ALTA
American Land Title Association.

ALTA title insurance policy
A broad form of title insurance policy, which includes unusual risks such as factors, which could be disclosed by inspection of the land or by a survey.

Amenities
Those qualities which are pleasing and agreeable; intangible benefits of property ownership such as pride of ownership or scenic beauty.

Appreciation
An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.
   
Assessed value
The valuation placed on property by a public tax assessor for purposes of taxation.
   
Assessment
The process of placing a value on property for the strict purpose of taxation. May also refer to a levy against property for a special purpose, such as a sewer assessment.
   
Assessment rolls
The public record of taxable property.
   
Assessor
A public official who establishes the value of a property for taxation purposes.
   
Asset
Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).
   
Assignment
The transfer of a mortgage from one person to another.
   
Assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.
   
Assumption
The transfer of the seller's existing mortgage to the buyer.
   
Assumption clause
A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property.

Common elements
Those areas within a condominium which each owner of a condominium unit has the right to use in common with each other.

Common Law
The body of law based on custom and usage, some derived from English law.

Community property
Property owned half by each married partner, if acquired during the marriage period with joint funds or efforts; exists in only a few states.

Concurrent ownership
Ownership where two or more persons possess simultaneous estates in the same property.

Condemnation
The process whereby the government or a quasigovernment ownership takes title to private property for public use in exchange for just compensation under the power of eminent domain.

Conditional
Depends upon the occurrence of certain terms or events.

Condominium
A unit in an apartment or multifamily structure, which is owned by an individual in the same way an individual, can own other real property.

Conservator
A person appointed by a court to take legal charge of the person and property of a person incapable of managing his affairs.

Consideration
Anything of value, whether tangible or not, given by one party in a contractual agreement.

Constructive notice
Other than actual notice- notice given to the public through the process of recording documents in the public records office; notice imputed to a buyer by persons in possession of property.

Consummate Dower
After the death of a husband, the dower interest which the wife had in her husband's estate.

Contiguous
Next to and in actual contact.

Contingent
Dependent upon a future event which is uncertain.

Contingent remainder
An estate in land, the possession and enjoyment of which is delayed until the termination of a preceding estate and the occurrence of a condition.

Contract
A legally enforceable agreement consisting of an offer, an acceptance and consideration.

Contract for deed
See Installment land contract.

Conventional mortgage
A mortgage other than one guaranteed by FHA or VA.

Conveyance
The transfer of title to real estate from one party to another by written instrument.

Cooperative
An apartment or multifamily building owned by several persons through a corporation, such that each owner is a stockholder and also leases a portion of the building.

Co-owners
Two or more persons who possess simultaneous estates in the same property.

Corporation
An entity created by and under the authority of a state or other government for private or public purposes.

Cost approach
A property appraisal process in which the appraiser estimates building value as replacement cost minus depreciation.

Cul de sac
A circular turn-around street in a property development.

Damages
The amount recoverable by a person who has suffered an injury, either in person or property, due to the wrong of another.

Datum
A plan of elevation from which heights and depths are measured.

Debtor
The owner of a property in a security agreement; sometimes called mortgager.

Declaration of restrictions
An instrument other than a deed containing restrictive covenants which is incorporated by reference and made part of a deed.

Decree
A court order as a result of a judicial proceeding.

Dedication
A voluntary giving of property by the owner for use by authorized public officials on behalf of the public.

Deed
A written instrument by which title to real property is conveyed from one person to another.

Default
The failure to fulfill a contractual obligation.

Defeasance Clause
The clause in a mortgage note that allows the mortgager to redeem his property after all payments due the mortgagee are paid.

Deficiency Judgment
A judgment rendered after default when the security pledged for a loan does not satisfy the debt.

Exception
A right or portion of property reserved in the grantor in a conveyance by deed.

Exclusive agency listing
A listing agreement between a seller and a broker where either has a right to sell the property; if sold by the broker, a commission will be due.

Exclusive right to sell
A listing agreement between a seller and a broker whereby the broker receives a commission, whoever sells the property.

Execute
To sign and deliver an instrument, such as a deed.

Executor
A person specified in a will to carry out the provisions of the will

Fee simple
The highest interest a person may have in real property. 

Fee simple Determinable
(Qualified fee) Fee simple subject to a condition or limitation, the occurrence of which causes title to revert back to its grantor or his heirs automatically.

FHA
Federal Housing Administration; a federal agency which insures home mortgages.

Fiduciary
A relationship of trust and confidence as between a principal and agent.

Financing statement
An instrument filed with the recorder or register of deeds indicating that personal property is encumbered.

Fixture
An item that was originally personal property but is so attached to the property that it becomes part of the real estate.

Flashing
Sheet metal or other material used around chimneys or other places to prevent water seepage.

Footing
The base on which a home foundation stands.

Foreclosure
A legal proceeding by a lien claimant to force sale of a property to pay the amount due the lien claimant.

Forfeiture
The loss of money or right due to default or failure to perform in accord with a contract.

Foundation
The portion of a structure which supports the first floor and construction above it.

Fraud
Successful deception with the intent of deceiving another person.

Freehold Estate
An estate existing for an indefinite length of time; an estate of inheritance or for life.

Frontage
Property on a street, highway, or lake.

Front foot
A measure of property value where the distance is measured along the street, highway, stream, or other body of water.

Functional Obsolescence
Things internal to a structure that detract from a building value.

General lien
A lien effective against all of a person's property, both real and personal.

Grade
The level of the ground at the structure foundation.

Graduated lease
A lease providing for a variable rate of rend depending upon some future event.

Grantor
A person who transfers property, such as a seller.

Gross lease
A lease agreement whereby the pro0perty owner pays taxes, insurance, repairs, and other costs.

Guardian
A person granted power by a court to take care of and manage the property of another person who has been declared legally incapable of administering his own affairs.

Habendum
A provision in a deed, which defines the extent of the ownership to be granted to and enjoyed by the grantee.

Heirs
The persons designated by statute to receive an estate where there is no will.

Hereditaments
Any property which can be inherited.

Highest and best use
The use of a property, which will yield the greatest return on the property.

Homestead
Any real estate where the owner resides and which is exempt from creditor's claims to an amount specified by state law.

HUD
Federal Department of Housing and Urban Development.

Hypothecate
To give something as security without giving up its possession.

Judicial foreclosure
A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court.
   
Jumbo loan
A loan that exceeds Fannie Mae's legislated mortgage amount limits. Also called a nonconforming loan.

Line of credit
An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower. See home equity line of credit.

Liquid asset
A cash asset or an asset that is easily converted into cash.

Loan
A sum of borrowed money (principal) that is generally repaid with interest.

Loan commitment
See commitment letter.

Loan origination
The process by which a mortgage lender brings into existence a mortgage secured by real property.

Loan-to-value (LTV) percentage
The relationship between the principal balance of the mortgage and the appraised value (or sales price if it is lower) of the property. For example, a $100,000 home with an $80,000 mortgage has a LTV percentage of 80 percent.

Lock-in
A written agreement in which the lender guarantees a specified interest rate if a mortgage goes to closing within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.

Lock-in period
The time period during which the lender has guaranteed an interest rate to a borrower. See lock-in.
   
Late charge
The penalty a borrower must pay when a payment is made a stated number of days (usually 15) after the due date.
   
Lease
A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may possess the real estate for a specified period of time and rent.
   
Leasehold estate
A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.
   
Lease-purchase mortgage loan
An alternative financing option that allows low- and moderate-income home buyers to lease a home from a nonprofit organization with an option to buy. Each month's rent payment consists of principal, interest, taxes and insurance (PITI) payments on the first mortgage plus an extra amount that is earmarked for deposit to a savings account in which money for a down payment will accumulate.
   
Legal description
A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.
   
Liabilities
A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.
   
Liability insurance
Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party.
   
Lien
A legal claim against a property that must be paid off when the property is sold.
   
Lifetime payment cap
For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease over the life of the mortgage. See cap.
   
Lifetime rate cap
For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over the life of the loan. See cap.

MAI
A member of the American Institute of Appraisers qualified to specified requirements.

Marginal land
Land in use which barely pays the cost of working it.

Market approach
The process of property appraisal by comparing it to sales of equivalent properties.

Market value
The highest price which property would be expected to bring in the open market under normal conditions.

Margin
For an adjustable-rate mortgage (ARM), the amount that is added to the index to establish the interest rate on each adjustment date, subject to any limitations on the interest rate change.
   
Master association
A homeowners' association in a large condominium or planned unit development (PUD) project that is made up of representatives from associations covering specific areas within the project. In effect, it is a "second-level" association that handles matters affecting the entire development, while the "first-level" associations handle matters affecting their particular portions of the project.
   
Maturity
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.
   
Maximum financing
A mortgage amount that is within 5 percent of the highest loan-to-value (LTV) percentage allowed for a specific product. Thus, maximum financing on a fixed-rate mortgage would be 90 percent or higher, because 95 percent is the maximum allowable LTV percentage for that product.
   

Meandered
Area such as a lake on which taxes are not paid.

Meander line
The approximate border of a natural body of water.

Mechanic's lien
A lien which can be filed by mechanics or material men who supply labor or materials for property improvement to secure payment.

Meridian
Map lines running north and south to locate land under the governmental survey system.

Metes and bounds
A method of legal description by use of measurements, boundaries and directions.

Mineral rights
A legal interest in minerals in land, which includes the right to take minerals from land.

Modernization
Replacement of outmoded fixture, equipment, and other features of an improvement with modern features.

Monument
A fixed object, either natural or artificial, which surveyors use to measure.
   
Modification
The act of changing any of the terms of the mortgage.
     
Mortgage
A legal document that pledges a property to the lender as security for payment of a debt.
   
Mortgage broker
An individual or company that brings borrowers and lenders together for the purpose of loan origination. Mortgage brokers typically require a fee or a commission for their services.
    
Mortgagee
The lender in a mortgage agreement.
 
Mortgagor
The borrower in a mortgage agreement

Mortgage insurance
A contract that insures the lender against loss caused by a mortgagor's default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan. See private mortgage insurance (MI).

Mortgage insurance premium (MIP)
The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.
   
Mortgage life insurance
A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the principal balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds.
   
Multidwelling units
Properties that provide separate housing units for more than one family, although they secure only a single mortgage.
   
Multifamily mortgage
A residential mortgage on a dwelling that is designed to house more than four families, such as a high-rise apartment complex.

NAR
National Association of Realtors (formerly NAREB, National Association of Real Estate Boards.)

Navigable water
A waterway capable of passage by watercraft; navigable if so designated on a U.S. Map.

Negative amortization
A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the entire principal and interest due.
 
Net cash flow
The income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense, which includes principal, interest, taxes, and insurance (PITI) for the mortgage, homeowners' association dues, leasehold payments, and subordinate financing payments.

Net lease
A lease agreement in which the tenant pays rent plus all taxes, insurance, repairs, and other costs.

Net listing
A listing agreement whereby the owner receives a set amount and the broker receives all above that amount.
     
No cash-out refinance
A refinance transaction in which the new mortgage amount is limited to the sum of the remaining balance of the existing first mortgage, closing costs (including prepaid items), points, the amount required to satisfy any mortgage liens that are more than one year old (if the borrower chooses to satisfy them), and other funds for the borrower's use (as long as the amount does not exceed 1 percent of the principal amount of the new mortgage).
     
Nominal consideration
Consideration having no relationship to the actual value of the contract or property conveyed.

Nonfreehold estate
An estate in land of a certain duration, i.e., leasehold estate.

Note
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.
   
Note rate
The interest rate stated on a mortgage note.
   
Notice of default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.
 
Notice to quit
Notice given to a tenant to vacate a rented property.

Nuisance
Anything that is offensive to a person or property.
   
Obsolescence
Loss in value due to obsolete or out-of-date design or construction.

Open end mortgage
A mortgage agreement such that the mortgager can borrow additional funds in the future without rewriting the mortgage.

Open listing
A listing agreement whereby either the owner or the broker can sell the property; if the broker is the procuring cause, a commission is due.

Option
A contractual right given for a consideration permitting a person to lease or buy the property at a specified price within a given period.

Optionee
A person who holds an option.

Optionor
A person who gives an option to another person.

Ordinance
A law passed by the legislative body by a municipal corporation.

Original principal balance
The total amount of principal owed on a mortgage before any payments are made.
   
Origination fee
A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount.

Owner financing
A property purchase transaction in which the property seller provides all or part of the financing.

Partition
An action seeking to have property owned by two or more persons sold and the proceeds divided between the parties; or to have the property divided into two or more portions.

Partnership
An association of two or more persons to carry on a business for profit as co-owners.

Party wall
A wall erected on the line between two adjacent properties for the use of both parties.

Partial payment
A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan.
   
Payment change date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate mortgage (GPARM). Generally, the payment change date occurs in the month immediately after the adjustment date.
   
Periodic payment cap
For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease during any one adjustment period.
   
Periodic rate cap
For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.
   
Personal property
Any property that is not real property.
   
PITI reserves
A cash amount that a borrower must have on hand after making a downpayment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.
   
Point
A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.

Power of attorney
A legal document that authorizes another person to act on one's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.
   
Prearranged refinancing agreement
A formal or informal arrangement between a lender and a borrower wherein the lender agrees to offer special terms (such as a reduction in the costs) for a future refinancing of a mortgage being originated as an inducement for the borrower to enter into the original mortgage transaction.
   
Preforeclosure sale
A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the amount that is owed to the investor.
   
Prepayment
Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner's decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized.
   
Prepayment penalty
A fee that may be charged to a borrower who pays off a loan before it is due.
   
Pre-qualification
The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan.

Prime rate
The interest rate that banks charge to their preferred customers. Changes in the prime rate influence changes in other rates, including mortgage interest rates.
   
Principal
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.
   
Principal balance
The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.
   
Principal, interest, taxes, and insurance
The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.
   
Private mortgage insurance (MI)
Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.
   
Public auction
A meeting in an announced public location to sell property to repay a mortgage that is in default.
   
Purchase and sale agreement
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.