on a Letter to lookup a Real Estate Legal Term
A method of depreciation used for accounting
or income tax purposes that allows greater deductions in the earlier years of the ownership of a property.
A provision in a legal agreement / contract stating that the entire outstanding balance of a loan becomes
payable immediately if a certain event transpires (e.g., missing a payment.)
An offeree's agrees to enter into a contract and be bound by the terms of the offer.
A unit of land measure equaling 43,560 square feet or a tract about 4,840 square yards. For visuality
purposes, an acre can be compared to the size of a football field - not counting the two end zones. One
square mile is equal to 640 acres.
Something added or attached to a contract. It is sometimes called a rider. More than one
are called addenda.
A borrower's payment of more than the scheduled principal amount due in order to reduce the remaining
balance on a loan.
Adjustable-Rate Mortgage (ARM)
A mortgage loan that bears interest at a rate that is subject to change and therefore
adjustable during the term of the loan. Interest rates may move up or down as conditions in the market
changes. Most ARMs have caps on how much the interest rate may increase.
The original cost of a property that reflects any deductions taken on or improvements to the asset or
security, used to compute the gain or loss when sold.
After an initial period where an ARM’s interest rate remains the same, the rate changes on the adjustment
date to reflect the current market rate. It will continue to adjust either monthly, semi-annually or annually
over the life of the loan. For example, the first adjustment date for a 10/1 ARM is after 10 years.
How often the loan's rate can be changed.
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).
A person appointed by a probate court to administer the estate of a person who has died.
A thorough examination of an individual's ability to afford a house, taking into consideration income,
assets, liabilities, available funds, mortgage type, home price, the area where you want to purchase a
home, and the expected closing costs.
A term applied to the efforts of the public
and private sector to help low and moderate income people purchase homes through programs that offer lower
down payments, loan with more lenient qualifying rules, and interest below market interest rates.
A feature of real property that enhances its attractiveness and increases the occupant's or user's satisfaction
although the feature is not essential to the property's use. Natural amenities include a pleasant or desirable
location near water, scenic views of the surrounding area, etc. (e.g., swimming pools, tennis courts,
boat docks, club houses, community buildings, and other recreational facilities).
The gradual repayment of a mortgage loan by installments over a specified period of time which must be
sufficient to cover both the principal and the interest.
A table showing the periodic principal and interest payments and the remaining balance after each payment
is made for the life of a loan.
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number
of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.
To reduce debt by by making payments against the principal balance in installments or regular payments.
A mortgage where the principal and interest amounts are repaid according
to a plan through a series of equal payments in monthly or other periodic installments without any special
balloon payment prior to maturity. Also known as a Level payment loan.
A report sent to the the borrower of a mortgage loan each year. The report shows how much was paid in
taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.
Annual Percentage Rate (APR)
The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance, and
loan origination fee (points). The APR interest rate is different from the note rate. It is commonly used
to compare loan programs from different lenders. The Federal Truth in Lending law requires mortgage companies
to disclose the APR when they advertise a rate. Typically the APR is found next to the rate.
An amount paid yearly or at other regular intervals, at equal or nearly equal payments such as the installment
rent payments due to a landlord under a lease or the installment payments due to a lender over a period
of time or paid at times in a lump sum future payment.
The lender's form filled out by the potential borrower of funds. Lenders use the information to evaluate
if they can grant the loan and if so, how much they can lend.
A written report prepared by a qualified appraiser estimating the value of a property. Appraisals are
performed for lenders more so than buyers. The purpose is to justify the sales price so that the lender
feels they are making a solid investment since the property is collateral for the loan. In an appraisal,
importance is given to recent home sales in proximity to the appraised home such as properties on that
street and in the neighborhood.
An educated opinion
of a property's fair market value, which is based on the appraiser's analysis of the property, knowledge
A person qualified by education, training, and experience to estimate the value of real property and personal
An increase in the value of a property due to changes in market conditions or other causes. The opposite
See Adjustable Rate Mortgage.
The valuation placed on property by a public tax assessor for purposes of taxation.
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.
The public record of taxable property. Also called Tax Roll.
A public official who establishes the value of a property for taxation purposes.
Anything of monetary value that is owned by a person and has a value. Assets include real property, personal
property, and enforceable claims against others (including bank accounts, stocks, mutual funds, etc...).
The transfer of a mortgage from one person to another.
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.
The transfer of the seller's existing mortgage to the buyer. See assumable mortgage.
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 fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of
an existing mortgage.
An atrium refers to a entranceway with an enclosed multi-storied space that is open vertically to multiple
levels. Buildings with an atrium appeal to people because it brings the outside views inside by bringing
natural light into the interior of a building.
The official act
of establishing authenticity or to affirm that a statement or document is true, genuine or accurate.
One who has been authorized by a principal under a power of attorney (a written instrument) to perform
a acts or to execute documents on behalf of the grantor of the power.
A public sale of property to the highest
An offer by a seller to sell property but holds the right to establish a minimum opening bid or to accept
or reject bids.
An inspection of the books, records and procedures used by a business or individual. Inspection is done
by a CPA or other qualified person.
The definitions of Real Estate
Definitions found on 10Realty.com are for general information only. All information is subject to change
and should be independently verified. 10Realty.com makes no representations or warranties of any nature
with regard to the information found on the pages therein. 10Realty.com assumes no responsibility for
any liabilities or losses claimed or incurred as a result of using this information. (Real Estate Terms,
Investment Terms, Banking Terms explained, definitions, legal definitions, legal terms and definitions)