MAJOR DEFICIENCY   
A deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair.

MANUFACTURED HOUSING   
Once known as ''mobile homes,'' manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.

MARGIN   
The difference between the interest rate and the index on an adjustable rate mortgage.

MARGINAL LAND   
Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

MASTER ASSOCIATION   
An umbrella organization that is made up of multiple, smaller home owner's associations. Often found in very large developments or condominium projects.

MATURITY   
The date on which the principal balance of a financial instrument becomes due and payable.

MERGED CREDIT REPORT   
A credit report derived from data obtained from multiple credit agencies.

METES AND BOUNDS   
A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.

METROPOLITAN AREA   
The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.

MINERAL RIGHTS   
The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.

MISREPRESENTATION   
A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.

MORTGAGE   
A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGE BANKER   
A financial institution that provides primary and secondary mortgages to home buyers.

MORTGAGE BROKER   
A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.

MORTGAGEE   
The entity that lends money in a real estate transaction.

MORTGAGE INSURANCE   
A policy that fulfills that obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

MORTGAGE INSURANCE PREMIUM (MIP)   
An fee that is often included in mortgage payments that pays for mortgage insurance coverage.

MORTGAGE LIFE INSURANCE   
A policy that fulfills the obligations of a mortgage when the policy holder dies.

MORTGAGOR   
The entity that borrows money in a real estate transaction.

MULTI-FAMILY PROPERTIES   
Any collection of buildings that are designed and built to support the habitation of more than four families.

NATIONAL ASSOCIATION OF MASTER APPRAISERS (NAMA)   
A non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal.

NATIONAL SOCIETY OF REAL ESTATE APPRAISERS   
An organization founded in 1956 which promotes standards of professionalism in its members.

NATURAL VACANCY RATE   
The percentage of vacant properties in a given area that is the result of natural turnover and market forces.

NEGATIVE AMORTIZATION   
When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.

NEIGHBORHOOD LIFE-CYCLE   
The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.

NET LEASABLE AREA   
The space in a development, outside of the common areas, that can be rented to tenants.

NEW ENGLAND COLONIAL   
An architectural style dating from early American history typified by a two-story building with clapboard siding.

NO-COST LOAN   
Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

NO-POINT LOAN   
A loan with no "points". The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.

NON-CONFORMING USE   
The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.

NONLIQUID ASSET   
Any asset which can not be quickly converted into cash at little or no cost.

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   
Formal written notice from a lender to a borrower that default has occurred.

OBSOLESCENCE   
The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.

OCCUPANCY   
A physical presence within and control of a property.

OCCUPANCY RATE   
The percentage of properties in a given area that are occupied.

OCTOPUS RECEPTACLE   
An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.

OFF-SITE IMPROVEMENTS   
Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.

OFF-STREET PARKING   
Designated parking spaces associated with a particular building or other structure which are not located on public streets.

OLD TERMITE ACTIVITY   
Where no termites are currently active, but indications of past activity can be seen.

ON-SITE IMPROVEMENTS   
Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.

OPEN SPACE   
Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.

OPEN SPLICE   
An uncovered electrical connection.

ORIGINAL EQUITY   
The amount of cash a home buyer initially invests in the home.

ORIGINAL PRINCIPAL BALANCE   
The total amount of principal owed on a mortgage loan at the time of closing.

ORIGINATION FEE   
Refers to the total number of points paid by a borrower at closing.

OWNER FINANCING   
A transaction where the property owner provides all or part of the financing.

OWNER OCCUPIED   
The state of property wherein the owner occupies at least some portion of the property.

PARGING   
The cement coat applied to block foundations.

PARTIAL INTEREST   
A shared ownership in a piece of property. May be divided among two or more parties.

PARTIAL PAYMENT   
A payment of less than the regular monthly amount. Usually, a lender will not accept partial payments.

PERIODIC PAYMENT CAP   
The limit on how much regular monthly payments on an Adjustable Rate Mortgage can change during one adjustment period.

PERIODIC RATE CAP   
The limit on how much the interest rate on an Adjustable Rate Mortgage can change during any one adjustment period.

PERSONAL PROPERTY   
Owned items which are not permanently affixed to the land.

PERSONAL RESIDENCE   
The primary domicile of a person or family.

PLANNED UNIT DEVELOPMENT (PUD)   
A coordinated, real estate development where common areas are shared and maintained by an owner's association or other entity.

PLAT   
A plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.

POINT   
A percentage of a mortgage amount (one point = 1 percent).

PRE-APPROVAL   
The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.

PREFABRICATED   
Any building or portion thereof which is manufactured and assembled off site, then erected on a property.

PREPAYMENT   
Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.

PREPAYMENT PENALTY   
A fee that may be charged to a borrower who pays off a loan before it is due.

PRE-QUALIFICATION   
Less formal that pre-approval, pre-qualification usually means a written statement from a loan officer indicating his or her opinion that the borrower will be able to become approved for a mortgage loan.

PRIME RATE   
The interest rate that banks and other lending institutions charge other banks or preferred customers.

PRINCIPAL   
The amount owed on a mortgage which does not include interest or other fees.

PRINCIPAL BALANCE   
The outstanding balance of principal on a mortgage. Does not included interest due.

PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI)   
The most common constituents of a monthly mortgage payment.

PRIVATE MORTGAGE INSURANCE (PMI)   
A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less that 20%.

PROPERTY   
Any item which is owned or possessed.

PURCHASE AGREEMENT   
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

QUALIFYING RATIOS   
Two ratios used in determining credit worthiness for a mortgage loan. One is the ratio of a borrower's monthly housing costs to monthly income. The other is a ratio of all monthly debt to monthly income.

QUITCLAIM DEED   
A legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.

RAFTER   
A structural element of the roof, sloping from the peak to the outer walls.

RANCH HOUSE   
An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.

RATE LOCK   
A guarantee from a lender of a specific interest rate for a period of time.

REAL ESTATE   
A piece of land and any improvements or fixtures located on that land.

REAL ESTATE AGENT   
A licensed professional who facilitates the buying and selling of real estate.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)   
A federal law requiring lenders to give full disclosure of closing costs to borrowers.

REAL PROPERTY   
Land, improvements and appurtenances, and the interest and benefits thereof.

REALTOR   
A real estate agent or broker who is a member of the National Association of Realtors.

RECEPTACLE   
An electrical outlet to plug into.

RECORDING   
The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.

REFINANCE TRANSACTION   
A new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.

RELOCATION SERVICE   
Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.

REMAINING BALANCE   
The amount of principal, interest and other costs that has not yet been repaid.

REMAINING TERM   
The amount of time remaining on the original amortization schedule.

REMODEL   
An activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.

REPLACEMENT RESERVE FUND   
An account, or fund, setup for the replacement of short life items , such as carpeting, in the common areas of a cooperative property.

RESIDENTIAL PROPERTY   
A piece of property whose highest and best use is the maintenance of a residence.

REVOLVING DEBT   
A type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.

RIGHT OF FIRST REFUSAL   
An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.

ROOF PITCH   
The degree of slope in a roof.

SALE PRICE   
The actual price a property sells for, exclusive of any special financing concessions.

SALES COMPARISON APPROACH   
An appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.

SECOND MORTGAGE   
A loan secured by the equity in a home, when a primary mortgage already exists.

SECONDARY MORTGAGE MARKET   
An economic marketplace where mortgage bankers buy and sell existing mortgages.

SECURED LOAN   
A loan that is backed by collateral. In the case of a mortgage loan, the collateral is the house.

SECURITY   
The property used as collateral for a loan.

SEMIDETACHED HOUSING   
Two residences which share a common wall.

SERVICER   
A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.

SHEATHING   
The covering on outside walls beneath the siding or exterior finish such as stucco.

SHEETROCK   
Also called drywall, the gypsum board commonly used on interior walls.

SILL PLATE   
The lumber used around the foundation to support exterior wall framing.

SILL COCK   
Garden hose pipe connection.

SINGLE-FAMILY PROPERTY   
A property designed and built to support the habitation of one family.

SOFFIT   
The underside of a cornice at the eaves.

STUCCO   
A textured plaster exterior (and occasionally interior) wall finish.

STUD   
A vertical framing piece in a wall, generally 2x4 lumber in interior walls.

SUBDIVISION   
A residential development that is created from a piece of land which has been subdivided into individual lots.

SUBJECT PROPERTY   
A term which indicates a property which is being appraised.

SUMP   
A basin into which water drains and from which the water is pumped out.

SURVEY   
A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.

SWEAT EQUITY   
The method whereby a home owner develops equity in a property, either during the purchase or throughout its life, by personally constructing improvements rather than paying to have them built.