Mortgage Terms

A, B, C, D-E, F-G, H-K, L-M, N-Q, R-S, T-Z

 

Rate Lock
also known as a lock-in. A guarantee from a lender that a borrower will receive the interest rate in effect for a specific amount of time.

Real Estate
also known as real property. Land and anything permanently affixed to the land, such as a building.

Real Estate Agent
a licensed individual, designated to act on the behalf of either the buyer, or the property owner, in a real estate transaction. Also known as a realtor.

Recourse
the right of the holder of a note secured by a mortgage or deed of trust to look personally to the borrower or endorser for payment.

Redlining
the practice of refusing to provide loans or insurance in a certain neighborhood.

Refinancing
securing a new loan that pays off the current mortgage(s), using the same property as security. Often done to obtain a lower interest rate, or to gain access to equity for cash back.

Release
an instrument releasing property from the lien of the mortgage, judgment, etc.

RESPA (Real Estate Settlement Procedures Act)
federal regulations that require lenders and mortgage brokers to disclose to borrowers, in advance, the fees required to obtain a mortgage loan.

Restrictive Covenant
a clause in a deed that restricts the use of property for some period of time.

Reverse Mortgage
a special program for the elderly that provides income until death. Payment requirements are arranged through the increase in the principal amount of the loan.

Rural Housing Service (RHS)
an agency of the U.S. Department of Agriculture that provides financing to farmers and other borrowers in rural areas who are otherwise unable to obtain a loan.

Second Mortgage
a mortgage that has a lien position behind (is subordinate to) the first mortgage.

Secondary Market
the buying and selling of existing mortgages by entities such as commercial banks, pension funds, and Wall Street firms.

Secondary Market Investor
an entity, such as FNMA or FHLMC, that buys mortgage loans for investment or sells them again to another secondary market investor. Secondary market investors do not actually service loans and do not collect payments from borrowers.

Servicer
the entity that collects payments and manages escrow accounts of a loan. Often designated when a loan has been purchased by a secondary market investor.

Settlement
see closing.

Subprime
credit that is less-than-perfect. This may include late or missed payments, past bankruptcies, or judgements. A borrower whose credit is considered subprime may still be eligible for a loan, but will generally be subject to higher interest rates.