EARNEST MONEY DEPOSIT   
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.

EASEMENT   
The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.

EAVE   
The part of the roof that extends beyond the exterior wall.

ECONOMIC DEPRECIATION   
The decline in property value caused by external forces, such as neighborhood blight or adverse development.

ECONOMIC LIFE   
The amount of time which any income-producing property is able to provide benefits to its owner.

EFFECTIVE AGE   
The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.

EMINENT DOMAIN   
The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.

ENCROACHMENT   
A building or other improvement on one property which invades another property or restricts its usage.

ENCUMBRANCE   
A claim against a property. Examples are mortgages, liens and easements.

ENERGY EFFICIENCY RATIO   
An efficiency rating system for air conditioning units that corresponds to the number of BTU's output per watt of electricity used.

EQUAL CREDIT OPPORTUNITY ACT (ECOA)   
U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc

EQUITY   
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.

EQUITY BUILDUP   
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.

ERRORS AND OMISSIONS INSURANCE   
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.

ESCROW   
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.

ESCROW ACCOUNT   
An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that goes into the escrow account each month.

ESCROW ANALYSIS   
An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.

ESCROW DISBURSEMENTS   
The payout of funds from an escrow account to pay property expenses such as taxes and insurance.

ESTATE   
The total of all property and assets owned by an individual.

EXAMINATION OF TITLE   
The report on the title of a property from the public records or an abstract of the title.

EXCLUSIVE LISTING   
An agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.

FACADE   
The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.

FAIR CREDIT REPORTING ACT   
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.

FAIR MARKET VALUE   
The price at which two unrelated parties, under no duress, are willing to transact business.

FANNIE MAE   
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.

FASCIA   
The boards that enclose the eaves.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)   
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.

FEDERAL HOUSING ADMINISTRATION (FHA)   
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.

FEE APPRAISER   
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.

FEE SIMPLE   
A complete, unencumbered ownership right in a piece of property.

FEE SIMPLE ESTATE   
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.

FHA MORTGAGE   
A mortgage that is insured by the Federal Housing Administration (FHA).

FIRST MORTGAGE   
The primary loan or mortgage secured by a piece of property.

FIXED-RATE MORTGAGE (FRM)   
A mortgage which has a fixed rate of interest over the life of the loan.

FIXTURE   
Any piece of personal property which becomes permanently affixed to a piece of real property.

FLASHING   
The metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.

FLOOD INSURANCE   
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.

FLOOR PLAN   
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.

FLUE   
The furnace exhaust pipe, usually going through the roof.

FOOTING   
The partially buried support for a vertical structural member such as a post.

FORECLOSURE   
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.

FORFEITURE   
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.

FOUNDATION   
The solid structural element upon which a structure is built.

FRONTAGE   
The segment of a property that runs along a point of access, such as a street or water front.

FUNCTIONAL OBSOLESCENCE   
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.

GABLE ROOF   
A steeply angled, triangular roof.

GALVANIZED PIPE   
Iron pipe with a galvanized (zinc) coating.

GAMBREL ROOF   
A ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.

GENERAL LIEN   
A broad-based claim against several properties owned by a defaulting party.

GEORGIAN   
A classic, English-style hose characterized by simple rectangular shape and multiple stories.

GFI   
Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.

GINNIE MAE   
A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.

GIRDER   
A main supporting beam.

GRADE   
The slope of land around a building. Also ground level.

GRANTEE   
Any person who is given ownership of a piece of property.

GRANTOR   
Any person who gives away ownership of a piece of property.

GROSS AREA   
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.

GROUTING   
Material used around ceramic tile.

GUTTER   
The trough around the edge of the roof that catches and diverts rain.

HALF-SECTION   
320 acres.

HAZARD INSURANCE   
Insurance covering damage to a property caused by hazards such as fire, wind and accident.

HEADER   
The framing elements above an opening such as a window or door.

HEIGHT ZONING   
A municipal restriction on the maximum height of any building or other structure.

HIGHEST AND BEST USE   
The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.

HOME EQUITY CONVERSION MORTGAGE (HECM)   
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM's typically don't have to be repaid until the borrower is no longer occupying the home.

HOME EQUITY LINE OF CREDIT   
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.

HOME INSPECTION   
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.

HOME INSPECTOR   
A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER'S ASSOCIATION   
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.

HOMEOWNER'S INSURANCE   
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

HOMEOWNER'S WARRANTY   
An insurance policy covering the repair of systems and appliances within the home for the coverage period.

HUD MEDIAN INCOME   
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 STATEMENT   
A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.

IMPROVED LAND   
Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.

IMPROVEMENTS   
Any item added to vacant land with the intent of increasing its value or usability.

IMPROVEMENT RATIO   
The comparative value of a improved piece of land to its natural, unaltered state.

INCOME APPROACH   
The process of estimating the value of property by considering the present value of a stream of income generated by the property.

INCOME PROPERTY   
A piece of property whose highest and best use is the generation of income through rents or other sources.

INDEPENDENT APPRAISAL   
An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.

INSPECTION   
The examination of a piece of property, its buildings or other amenities.

INSURABLE TITLE   
The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.

INTEREST RATE   
A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.

INVESTMENT PROPERTY   
Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.

JAMB   
The side of a door frame.

JOINT TENANCY   
A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.

JOISTS   
Horizontal beams laid on edge to support flooring or a ceiling.

JUDGMENT   
An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payees property as collateral.

JUDICIAL FORECLOSURE   
A type of foreclosure conducted as a civil suit in a court of law.

JUMBO LOAN   
A mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called non-conforming loans.

LALLY COLUMN   
A concrete filled steel pipe used to support beams.

LATENT DEFECTS   
Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.

LEASE   
A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

LEASEHOLD ESTATE   
A type of property ''ownership'' where the buyer actually has a long-term lease on the property.

LEASE OPTION   
A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LENDER   
The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.

LIABILITIES    
A person's outstanding debt obligations.

LIABILITY INSURANCE   
Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.

LIEN   
Any claim against a piece of property resulting from a debt or other obligation.

LIFE CAP   
A limit on how far the interest rate can move for an Adjustable Rate Mortgage.

LIKE-KIND PROPERTY   
Any property which is substantially similar to another property.

LINE OF CREDIT   
An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LIQUID ASSET   
Any asset which can be quickly converted into cash at little or no cost, or cash itself.

LOAN    
Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

LOAN OFFICER   
A person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION   
How a lender refers to the process of writing new loans.

LOAN-TO-VALUE RATIO (LTV)   
The comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-IN    
An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

LOCK-IN PERIOD   
The amount of time the lender has guaranteed an interest rate to a borrower.