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Term Definition
CommitmentAn agreement, frequently in writing, between a lender and a borrower to loan money at a future date, subject to certain conditions.
 
ComparablesRefers to similar properties used for comparison purposes in the appraisal process. These properties will be reasonably the same size and location, with similar amenities and characteristics, so that the approximate fair market value of the subject property can be determined.
 
CondominiumOwnership of a single unit in a multiunit building or complex of buildings. Along with this goes a share of ownership of the common areas.
 
ContingencyA condition that must be met for a contract or a commitment to remain binding.
 
Conventional MortgageAny mortgage loan that is not insured by FHA, guaranteed by VA, of funded by a government authorized bond sale or grant.
 
ConveyTo transfer real estate from one person to another.
 
Credit ReportThe report to a prospective lender on the credit standing of a prospective borrower.
 
DeedA legal written document by which title to property is transferred.
 
DefaultFailure to fulfill the terms as agreed to in the mortgage of note.
 
Down PaymentThe difference between the sale price of a property and the mortgage amount.
 
Due-On-SaleA clause in a mortgage which gives the lender the right to require immediate repayment of a mortgage balance if the property changes hands.
 
Earnest MoneyThe deposit money given to seller or his agent by the potential buyer at the time of the purchase offer. If the offer is accepted, the money will become part of the down payment.
 
EasementA right to the limited use of land owned by another. An electric company, for example, could have an easement to put up electric power lines over someone's property.
 
EncumbranceAnything that affects or limits the title to a property, such as outstanding mortgages, easement rights or unpaid property taxes.
 
EquityThe value in which the owner has in real estate over and above the mortgages against it. When the mortgage and all other debts against the property are paid in full, the owner has 100% equity in his property.
 
EscrowFunds and/or deed left in trust to a third party. Generally, a portion of the monthly mortgage payment is held in escrow by the lender to pay for taxes, hazard insurance and yearly mortgage insurance premiums.
 
First MortgageA mortgage that has a primary lien against a property.
 
Fixed-Rates MortgageA mortgage with an interest rate and monthly payments that remain constant over the life of the loan.
 
FixtureProperty, such as a hot water heater or plumbing fixture, that has become permanently attached to piece of real estate and goes with the property when it is sold.
 
Flood CertificationAn independent agency report required by the lender to determine whether a property is located in a flood hazard zone, which would then require a federally mandated flood insurance policy.
 


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