Glossary of Terms - R
The limit on the amount an interest rate on an adjustable-rate mortgage (ARM) can increase or decrease during an adjustment period.
An agreement in which an interest rate is “locked in” or guaranteed for a specified period of time prior to closing. See also “Lock-in Rate.”
Ready, Willing and Able Buyer:
One who is fully prepared to enter into the contract, really wants to buy and unquestionably meets the financing requirements of the purchase.
Real Estate Licensee:
An individual who is licensed by the state to provide the service involved in buying and selling real estate. Any real estate professional who does not have a real estate broker’s license is considered a real estate salesperson.
Real Estate Sales Contract:
A contract that shows both you and the seller of the house have agreed to your offer. This offer may include sales contingencies, such as obtaining a mortgage of a certain type and rate, getting an acceptable inspection, making repairs, closing by a certain date, etc.
Real Estate Settlement Procedures Act (RESPA):
A federal law that requires lenders to provide home mortgage borrowers with information about transaction-related costs prior to settlement, as well as information during the life of the loan regarding servicing and escrow accounts. RESPA also prohibits kickbacks and unearned fees in the mortgage loan business.
Land and anything permanently affixed thereto — including buildings, fences, trees, and minerals.
A registered trademark of the National Association of REALTORS® that denotes a real estate licensee who is a member of the association and adheres to a strict Code of Ethics.
The public official who keeps records of transactions that affect real property in the area. Sometimes known as a “Registrar of Deeds” or “County Clerk.”
The filing of a lien or other legal documents in the appropriate public record, which gives notice to future purchasers of the property, creditors or other interested parties. Recording is normally controlled by state statutes and regulations and usually requires the witnessing and notarizing of an instrument to be recorded.
The act of buying back the title to a property following a mortgage foreclosure, tax foreclosure or other execution sale. This process is normally controlled by state law and must be done within a specified redemption period, which is determined based on the amount of equity the property owner has in the property.
The act of obtaining a new mortgage on a property with all or some portion of the proceeds used to pay off the prior mortgage on the property.
A mortgage loan made to cover the costs of repairing, improving, and sometimes acquiring an existing property.
A written document stating a buyer or seller has satisfied his or her obligation on a debt. This document is normally recorded.
The original number of payments due on the loan minus the number of payments that have been made.
An arrangement by which a borrower agrees to make additional payments to pay down past due amounts while still making regularly scheduled payments.
The cost to replace damaged personal property without a deduction for depreciation.
The cancellation or annulment of a transaction or contract by operation of law or by mutual consent. Borrowers have a right to cancel certain mortgage refinance and home equity transactions within three business days after closing, or for up to three years in certain instances.
Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation and improvement of the land. In homeowners’ associations, these restrictions are very common and control the use of the property in conformance with the neighborhood plan.
A mortgage for which the borrower pledges home equity in return for regular payments, rather than a lump sum distribution of the loan proceeds. Repayment is usually not required until the home is sold or the borrower’s estate is settled, provided the borrower continues to live in the home and keeps current all taxes and insurance.
Credit that is extended by a creditor under a plan in which: (1) the creditor contemplates repeated transactions; (2) the creditor may impose a finance charge from time to time on an outstanding unpaid balance; and (3) the amount of credit that may be extended to the consumer during the term of the plan is generally made available to the extent that any outstanding balance is repaid.
Right of First Refusal:
A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
Right of Way:
The right to pass over property owned by another, usually based upon an easement. This term can also refer to a strip of land condemned by a government entity or utility over which facilities such as highways, railroads or power lines are built.
Rural Housing Service (RHS):
An agency within the U.S. Department of Agriculture (USDA), which operates a range of programs to help rural communities and individuals by providing loan and grants for housing and community facilities. The agency also works with private lenders to guarantee loans for the purchase or construction of single-family housing.