REAL ESTATE DICTIONARY


2.        Abstract of Title
A condensed history of the title to parcel of land consisting of a summary of every recorded instrument, together with a statement of all liens,
charges or encumbrances affecting title to the land.

3.        Acceleration Clause
A clause in a mortgage stating that upon default of a payment due, immediate and full payment of the balance of the obligation becomes due and
payable.

4.        Adjustable-Rate Mortgage (ARM)
A mortgage that permits the lender to adjust its interest rate periodically on the basis of changes in a specified index.

5.        Adjustment Date
The date the interest rate changes on an adjustable-rate mortgage

6.        Administrator
a person appointed by the court to administer the estate of a deceased person who died intestate, or left no will.

7.        Administrator’s Deed
A deed given by an Administrator.

8.        Agency
The legal relationship resulting from an agreement that the agent is authorized by a principal to perform certain acts on behalf of the principal in
dealing with a third party. The agent has a fiduciary duty to the principal.

9.        Agreement of Sale
A written agreement in which the buyer agrees to buy certain realty and the seller agrees to sell upon terms and conditions set forth therein. Title
remains with the seller until the terms and conditions are fulfilled; buyer has equitable title.

10.        Amortization
The gradual paying off of a debt on an installment basis. Payment consists accruing interest and the remainder being applied to the principal.
Over time, the interest portion decreases as the loan balance decreases, and the amount applied to principal increases so that the loan is paid
off (amortized) in the specified time.

11.        Amortization Schedule
A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the balance remaining.

12.        Annual Percentage Rate (APR)
The total yearly cost of a mortgage stated as a percentage of the loan amount; includes such items as the base interest rate, primary mortgage
insurance and loan origination fee (points).

13.        Appraisal
A written estimation of the values of real estate; the report stating and supporting the estimated values of realty. Residential appraisals are
primarily based on an analysis of comparable sales of similar homes in the area.

14.        Appraised values
An opinion of a property's fair market values, based on an appraiser's knowledge, experience, and analysis of the property and current market. An
appraisal is based primarily on the most recent sales of comparable properties.

15.        Appraiser
An individual qualified by education, training, and experience to estimate the values of real property and personal property. Although some
appraisers work directly for mortgage lenders, most are independent.

16.        Appreciation
The increase in the values of a property due to changes in market conditions, inflation, or other causes.

17.        Assessed values
The valuation placed on property by a public tax assessor for purposes of taxation.

18.        Assessment
A charge against real estate made by a unit of government. It is calculated by using the property’s assessed values and a tax rate established by
the government.

19.        Assessor
A public official who establishes the values of a property for taxation purposes.

20.        Asset
Items of values owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets". These include bank
accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.

21.        Assignment
When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment.

22.        Assumable Mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.

23.        Assumption of Mortgage
Buyer takes title to property by assuming liability for payment of an existing note secured by a mortgage..

24.        Balloon Mortgage
A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it
would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.

25.        Balloon Payment
The final lump sum payment that is due at the termination of a balloon mortgage.

26.        Bankruptcy
By filing in federal bankruptcy court, an individual or individuals can restructure or relieve themselves of debts and liabilities. Bankruptcies are of
various types, but the most common for an individual seem to be a "Chapter 7 No Asset" bankruptcy which relieves the borrower of most types of
debts. A borrower cannot usually qualify for an "A" paper loan for a period of two years after the bankruptcy has been discharged and requires the
re-establishment of an ability to repay debt.

27.        Bill Of Sale
A written instrument which passes title of personal property from seller to buyer. .

28.        Biweekly Mortgage
A mortgage in which you make payments every two weeks instead of once a month. The basic result is that instead of making twelve monthly
payments during the year, you make thirteen. The extra payment reduces the principal, substantially reducing the time it takes to pay off a thirty
year.

29.        Blanket Mortgage
One mortgage covering two or more specific parcels of realty.

30.        Bond Market
Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go
up and down, fixed rate mortgages do approximately the same thing. The same factors that affect the Treasury Bond market also affect mortgage
rates at the same time. That is why rates change daily, and in a volatile market can and do change during the day as well.

31.        Broker (Mortgage)
In the mortgage industry, broker usually refers to a company or individual that does not lend the money for the loans themselves, but broker loans
to larger lenders or investors. As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of
transaction and earns a fee for doing so.

32.        Broker (Real Estate)
A licensed person who negotiates the purchase and sale of real estate for another. See definition of REALTOR for distinction.

33.        Building Codes
Rules established by local governments to regulate construction standards.

34.        Building Restrictions
Limitations on the use of property or the size and location of improvements established by legislation or by covenants in deeds.

35.        Bureau of Conveyances
The Hawaii state office which houses all legal documents relative to title to both land court and regular system property recorded since 1848.

36.        Buydown
Usually refers to a fixed rate mortgage where the interest rate is "bought down" for a temporary period, usually one to three years. After that time
and for the remainder of the term, the borrower’s payment is calculated at the note rate. In order to buy down the initial rate for the temporary
payment, a lump sum is paid and held in an account used to supplement the borrower’s monthly payment. These funds usually come from the
seller (or some other source) as a financial incentive to induce someone to buy their property. A "lender funded buydown" is when the lender
pays the initial lump sum. They can accomplish this because the note rate on the loan (after the buydown adjustments) will be higher than the
current market rate. One reason for doing this is because the borrower may get to "qualify" at the start rate and can qualify for a higher loan
amount. Another reason is that a borrower may expect his earnings to go up substantially in the near future, but wants a lower payment right now.

37.        Cap (ARM)
A provision of an ARM limiting how much the interest rate or mortgage payments may increase or decrease.

38.        Capitalization (CAP)
The act of converting future income into current equivalent values.

39.        Capitalization Rate
The relationship or ratio between the net income from a real estate investment and the values of the investment, usually expressed as a
percentage; the rate of the interest which is considered a reasonable return on the investment.
The percentage rate of return on a property during a one year period. The formula is expressed as follows: annual net income/purchase price x
100 = cap rate

40.        Certificate of Eligibility
A document issued by the Veterans Administration that certifies a veteran’s eligibility for a VA loan.

41.        Certificate of Reasonable values (CRV)
Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.

42.        Chain Of Title
An analysis of the transfers of title to a piece of property over the years.

43.        Clear Title
A title that is free of liens or legal questions as to ownership of the property.

44.        Closing
The time when a transaction is consummated, or the actual signing over of the documents and delivery of the deed; the time after signing when
the documents are recorded at the Bureau of Conveyances.

45.        Closing Costs
Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items
which are paid just once as a result of buying the property or obtaining a loan. "Pre-paids" are items which recur over time, such as property taxes
and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good
Faith Estimate which they must issue to the borrower within three days of receiving a home loan application.

46.        Closing Statement
A statement of settlement made by a by an escrow company that reflects the financial position of the buyer and seller in that particular real estate
transaction. Also see Settlement Statement.

47.        Cloud On Title
Any conditions revealed by a title search which may affect or impair the owner’s title to property because of their apparent or probable validity..
Usually clouds on title cannot be removed except by deed, release, or court action.

48.        Co-Borrower
An additional individual who is both obligated on the loan and is on title to the property.

49.        Collateral
In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the
mortgage or deed of trust.

50.        Commission
An agent’s compensation for performance of the duties of his agency; in real estate practice, a percentage of the selling price of the property, or
percentage of rentals, etc. Typically the total commission is split between the seller’s and buyer’s brokers.

51.        Commitment Letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer.

52.        Common Areas
Areas used by two or more tenants and/or third parties, and not under the control of anyone tenant.

53.        Common Area Maintenance Fees
Also known as net operating expenses. Expenses paid by tenants under triple net leases.

54.        Common Element
In a condominium, land and all parts of a building normally used by all of the owners for their mutual convenience or safety.

55.        Common Expense
In a condominium, the expenses of operation, all sums designated as such by the declaration or bylaws.

56.        Common Interest
The percentage of undivided interest in the common elements of a building appertaining to each apartment in a condominium.

57.        Common Law
An unwritten body of law based on general custom in England and used to an extent in some states.

58.        Community Property
In some states, especially the southwest, property acquired by a married couple during their marriage is considered to be owned jointly, except
under special circumstances.

59.        Comparable Sales
Recent sales of similar properties in nearby areas and used to help determine the market values of a property. Also referred to as "comps."

60.        Comprehensive Zoning Code (CZC)
Code which sets forth the zoning regulations for the City & County of Honolulu

61.        Condominium (Ownership)
The individual outright ownership of a single unit in a multi-unit property together with an interest in the common element of the property. Often
mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.

62.        Condominium Hotel
A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and
that is operated as a commercial hotel even though the units are individually owned. These are often found in resort areas like Hawaii.

63.        Construction Allowance(Tenant Improvement Allowance)
A landlord's contribution to the cost of construction and or alteration necessary to prepare a space for a tenant's occupancy.

64.        Construction loan
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work
progresses.

65.        Contingency
A condition that must be met before a contract is legally binding.

66.        Contract
A legal agreement between competent parties for a consideration to perform or refrain from performing certain acts. An oral or written agreement
to do or not to do a certain thing.

67.        Conventional Mortgage
Any mortgage that is not insured or guaranteed by the federal government.

68.        Convertible ARM
An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions.

69.        Conveyance
The transfer of the title of land from one to another; an instrument which carries from one person to another an interest in land.

70.        Conveyance Tax
In Hawaii a tax paid by the seller upon transfer of deed, based upon (currently) .1% of the sales price.

71.        Cooperative (Co-op) Ownership
Ownership which usually takes the form of shares of stock in a corporation owning the entire building and a proprietary lease giving the
stockholder/tenant the right to occupy a unit for which he pays a proportionate share of the maintenance and operating expenses.

72.        Cost Of Funds Index (COFI)
One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost
of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home
Loan Bank.

73.        Covenant
A clause in a mortgage that obligates or restricts the borrower and that, if violated, can results in foreclosure.

74.        Credit History
A record of an individual's repayment of debt. Credit histories are reviewed by mortgage lenders as one of the underwriting criteria in determining
credit risk. Credit histories are also used by landlords and property managers when considering prospective rental tenants.

75.        Credit Report
A report of an individual's credit history prepared by a credit bureau and used by a lenders as well as property managers in determining an
applicant's creditworthiness.

76.        Deed
A legal document, duly executed and delivered by the grantor that conveys to the grantee some right, title or interest in or to real estate.

77.        Deed-In-Lieu
Short for "deed in lieu of foreclosure," this conveys title to the lender when the borrower is in default and wants to avoid foreclosure. The lender
may or may not cease foreclosure activities if a borrower asks to provide a deed-in-lieu. Regardless of whether the lender accepts the deed-in-
lieu, the avoidance and non-repayment of debt will most likely show on a credit history. What a deed-in-lieu may prevent is having the documents
preparatory to a foreclosure being recorded and become a matter of public record.

78.        Default
The failure to make a mortgage payment on a timely basis or to comply with other requirements of a mortgage.

79.        Delinquency
A loan in which a payment is overdue but not yet in default.

80.        Deposit
A sum of money given by one to another as evidence of “good faith” in advance of a larger amount being expected in the future. Often called in
real estate as an "earnest money deposit."

81.        Depreciation
A decline in the values of property; the opposite of appreciation. Depreciation is also an accounting term which shows the declining monetary
values of an asset and is used as an expense to reduce taxable income. Since this is not a true expense where money is actually paid, lenders
will add back depreciation expense for self-employed borrowers and count it as income.

82.        Discount Points
In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to
any "points" paid in addition to the one percent loan origination fee. A "point" is one percent of the loan amount.

83.        Down Payment
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

84.        Due-On-Sale Provision
A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the
mortgage.

85.        Earnest Money
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

86.        Easement
A right of way giving persons other than the owner access to or over a property.

87.        Effective Age
An appraiser’s estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

88.        Effective Gross Income
The scheduled gross income of a property minus the vacancy rate.

89.        Eminent Domain
The right of a government to take private property for public use upon payment of just compensation. Eminent domain is the basis for
condemnation proceedings.

90.        Encroachment
An improvement that intrudes partly or wholly on another’s property.

91.        Encumbrance
Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

92.        Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion,
national origin, age, sex, marital status, or receipt of income from public assistance programs.

93.        Equity
A homeowner's financial interest in a property. Equity is the difference between the fair market values of the property and the amount still owed on
its mortgage and other liens.

94.        Escrow
An item of values, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest
money deposit is put into escrow until delivered to the seller when the transaction is closed.

95.        Escrow Account
Once you close your purchase transaction, you may have an escrow account or impound account with your lender. This means the amount you
pay each month includes an amount above what would be required if you were only paying your principal and interest. The extra money is held in
your impound account (escrow account) for the payment of items like property taxes and homeowner’s insurance when they come due. The
lender pays them with your money instead of you paying them yourself.

96.        Escrow Disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

97.        Estate
The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time
of death.

98.        Eviction
The lawful expulsion of an occupant from real property.

99.        Exclusive Right To Sell
A written agreement between owner and agent giving agent the right to sell and to collect a commission if the property is sold by anyone during
the term of the agreement.

100.        Executor
person named in a will to administer an estate. The court will appoint an administrator if no executor is named. "Executrix" is the feminine form.

101.        Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes
procedures for correcting mistakes on one's credit record.

102.        Fair Market values
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

103.        Fannie Mae (FNMA)
The Federal National Mortgage Association, which is a congressionally chartered, shareholder-owned company that is the nation's largest
supplier of home mortgage funds. For a discussion of the roles of Fannie Mae, Freddie Mac (FHLMC), and Ginnie Mae (GNMA), see the Library.

104.        Fannie Mae's Community Home Buyer's Program
An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a
low- or moderate-income family's buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who
participate in this model are required to attend pre-purchase home-buyer education sessions.

105.        Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made
by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.

106.        Fee Simple
The greatest possible interest a person can have in real estate.

107.        Fee Simple Estate
An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is
of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or
her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.

108.        FHA Mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a
government loan.

109.        Fiduciary
A person in a position of great trust and confidence, as the relationship between principal and broker (agent).

110.        Firm Commitment
A lender’s agreement to make a loan to a specific borrower on a specific property.

111.        First Mortgage
The mortgage that is in first place among any loans recorded against a property. Usually refers to the date in which loans are recorded, but there
are exceptions.

112.        Fixed-Rate Mortgage
A mortgage in which the interest rate does not change during the entire term of the loan.

113.        Fixture
Personal property that becomes real property when attached in a permanent manner to real estate.

114.        Flood Insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated
flood areas.

115.        Foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually
involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

116.        401(k)/403(b)
An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k)
plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations.

117.        Government Loan (Mortgage)
A mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or the Rural
Housing Service (RHS). Mortgages that are not government loans are classified as conventional loans.

118.        Government National Mortgage Association (Ginnie Mae)
A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). Created by Congress on September 1,
1968, GNMA performs the same role as Fannie Mae and Freddie Mac in providing funds to lenders for making home loans. The difference is that
Ginnie Mae provides funds for government loans (FHA and VA)

119.        Graduated Lease
A lease that provides for specific increases or decrease in rent at definite times during the term of the lease.

120.        Grantee
The person to whom an interest in real property is conveyed.

121.        Grantor
The person conveying an interest in real property.

122.        Gross Lease
A lease of property whereby the lessor is to pay all property charges regularly incurred through ownership.

123.        Hazard Insurance
Insurance coverage that in the event of physical damage to a property from fire, wind, vandalism, or other hazards.

124.        Home Equity Conversion Mortgage (HECM)
Usually referred to as a reverse annuity mortgage, what makes this type of mortgage unique is that instead of making payments to a lender, the
lender makes payments to you. It enables older home owners to convert the equity they have in their homes into cash, usually in the form of
monthly payments. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the values of his or her home.
In addition, the loan does not have to be repaid until the borrower no longer occupies the property.

125.        Home Equity Line Of Credit
A mortgage loan, usually in second position, that allows the borrower to obtain cash drawn against the equity of his home, up to a predetermined
amount.

126.        Home Inspection
A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is
often included as a contingency by the purchaser.

127.        Homeowners' Association
A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium
project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.

128.        Homeowner's Insurance
An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

129.        Homeowner's Warranty
A type of insurance often purchased by homebuyers that will cover repairs to certain items, such as heating or air conditioning, should they break
down within the coverage period. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can pay.

130.        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).

131.        HUD-1 Settlement Statement
A document that provides an itemized listing of the funds that were paid at closing. Items that appear on the statement include real estate
commissions, loan fees, points, and initial escrow (impound) amounts. Each type of expense goes on a specific numbered line on the sheet.
The totals at the bottom of the HUD-1 statement define the seller's net proceeds and the buyer's net payment at closing. It is called a HUD1
because the form is printed by the Department of Housing and Urban Development (HUD). The HUD1 statement is also known as the "closing
statement" or "settlement sheet."

132.        Joint Tenancy
A form of ownership by two or more persons in which each of the owners has an equal interest. A distinctive feature of the joint tenancy is the
right of survivorship by which the surviving tenants succeed to the interest of the deceased joint tenant.

133.        Judgment
A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property
as collateral for the judgment's creditor

134.        Judicial Foreclosure
A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court.
Other states use non-judicial foreclosure.

135.        Jumbo Loan
A loan that exceeds Fannie Mae’s and Freddie Mac’s loan limits, currently at $227,150. Also called a nonconforming loan. Freddie Mac and
Fannie Mae loans are referred to as conforming loans.

136.        Late Charge
The penalty a borrower must pay when a payment is made a stated number of days. On a first trust deed or mortgage, this is usually fifteen days.

137.        Lease
A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess
the real estate for a specified period of time.

138.        Leasehold Estate
A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.

139.        Lease Option
An alternative financing option that allows home buyers to lease a home with an option to buy. Each month's rent payment may consist of not only
the rent, but an additional amount which can be applied toward the down payment on an already specified price.

140.        Legal Description
A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

141.        Lender
A term which can refer to the institution making the loan or to the individual representing the firm. For example, loan officers are often referred to
as "lenders."

142.        Lessee
The tenant in a lease.

143.        Lessor
The landlord/owner in a lease.

144.        Liabilities
A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.

145.        Liability Insurance
Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily
injury or property damage to another party. It is usually part of a homeowner’s insurance policy.

146.        Lien
A legal claim against a property that must be paid off when the property is sold. A mortgage or first trust deed is considered a lien.

147.        Life Cap
For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over the life of the mortgage.

148.        Line Of Credit
An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

149.        Liquid Asset
A cash asset or an asset that is easily converted into cash.

150.        Loan
A sum of borrowed money (principal) that is generally repaid with interest.

151.        Loan Origination
How a lender refers to the process of obtaining new loans.

152.        Loan Servicing
After you obtain a loan, the company you make the payments to is "servicing" your loan. They process payments, send statements, manage the
escrow/impound account, provide collection efforts on delinquent loans, ensure that insurance and property taxes are made on the property,
handle pay-offs and assumptions, and provide a variety of other services.

153.        Loan-To-values (LTV)
The percentage relationship between the amount of the loan and the appraised values or sales price (whichever is lower).

154.        Lock-In
An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.

155.        Lock-In Period
The time period during which the lender has guaranteed an interest rate to a borrower.

156.        Margin
The difference between the interest rate and the index on an adjustable rate mortgage. The margin remains stable over the life of the loan. It is
the index which moves up and down.

157.        Maturity
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable

158.        Merged Credit Report
A credit report which reports the raw data pulled from two or more of the major credit repositories. Contrast with a Residential Mortgage Credit
Report (RMCR) or a standard factual credit report.

159.        Modification
Occasionally, a lender will agree to modify the terms of your mortgage without requiring you t refinance. If any changes are made, it is called a
modification.

160.        Mortgage
A legal document that pledges a property to the lender as security for payment of a debt. Instead of mortgages, some states use First Trust
Deeds.

161.        Mortgage Banker
For a more complete discussion of mortgage banker, see "Types of Lenders." A mortgage banker is generally assumed to originate and fund
their own loans, which are then sold on the secondary market, usually to Fannie Mae, Freddie Mac, or Ginnie Mae. However, firms rather loosely
apply this term to themselves, whether they are true mortgage bankers or simply mortgage brokers or correspondents.

162.        Mortgage Broker
A mortgage company that originates loans, then places those loans with a variety of other lending institutions with whom they usually have pre-
established relationships.

163.        Mortgagee
The lender in a mortgage agreement.

164.        Mortgage Insurance (MI)
Insurance that covers the lender against some of the losses incurred as a result of a default on a home loan. Often mistakenly referred to as PMI,
which is actually the name of one of the larger mortgage insurers. Mortgage insurance is usually required in one form or another on all loans that
have a loan-to-values higher than eighty percent. Mortgages above 80% LTV that call themselves "No MI" are usually a made at a higher interest
rate. Instead of the borrower paying the mortgage insurance premiums directly, they pay a higher interest rate to the lender, which then pays the
mortgage insurance themselves. Also, FHA loans and certain first-time homebuyer programs require mortgage insurance regardless of the loan-
to-values.

165.        Mortgage Insurance Premium (MIP)
The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to
a private mortgage insurance (MI) company.

166.        Mortgagor
The borrower in a mortgage agreement

167.        Multi-Dwelling Units
Properties that provide separate housing units for more than one family, although they secure only a single mortgage.

168.        Net Operating Income (NOI)
The Effective gross income from a property minus operating expenses.

169.        Note
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

170.        Note Rate
The interest rate stated on a mortgage note.

171.        Original Principal Balance
The total amount of principal owed on a mortgage before any payments are made.

172.        Origination Fee
On a government loan the loan origination fee is one percent of the loan amount, but additional points may be charged which are called "discount
points." One point equals one percent of the loan amount. On a conventional loan, the loan origination fee refers to the total number of points a
borrower pays.

173.        Owner Financing
A property purchase transaction in which the property seller provides all or part of the financing.

174.        Partial Payment
A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Normally, a lender will not accept a partial payment,
but in times of hardship you can make this request of the loan servicing collection department.

175.        Payment Change Date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM).
Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.

176.        Periodic Payment Cap
For an adjustable-rate mortgage where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit
on the amount that payments can increase or decrease during any one adjustment period.

177.        Periodic Rate Cap
For an adjustable-rate mortgage, a limit on the amount that the interest rate can increase or decrease during any one adjustment period,
regardless of how high or low the index might be.

178.        Personal Property
Any property that is not real property.

179.        PITI
This stands for principal, interest, taxes and insurance. If you have an "impounded" loan, then your monthly payment to the lender includes all of
these and probably includes mortgage insurance as well. If you do not have an impounded account, then the lender still calculates this amount
and uses it as part of determining your debt-to-income ratio.

180.        PITI Reserves
A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The
principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined
number of months.

181.        Planned Unit Development (PUD)
A type of ownership where individuals actually own the building or unit they live in, but common areas are owned jointly with the other members of
the development or association. Contrast with condominium, where an individual actually owns the airspace of his unit, but the buildings and
common areas are owned jointly with the others in the development or association.

182.        Point
A point is 1 percent of the amount of the mortgage.

183.        Power Of Attorney
A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to
certain acts and/or certain periods of time.

184.        Pre-Approval
A loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings
documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making
assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be
paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the
underwriting guidelines of the lender. Contrast with pre-qualification

185.        Prepayment
Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the
property, the owner's decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has
been fully amortized.

186.        Prepayment Penalty
A fee that may be charged to a borrower who pays off a loan before it is due.

187.        Pre-Qualification
This usually refers to the loan officer’s written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made
inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of
documentation, and the loan officer may or may not have reviewed a credit report on the borrower.

188.        Prime Rate
The interest rate that banks charge to their preferred customers. Changes in the prime rate are widely publicized in the news media and are
used as the indexes in some adjustable rate mortgages, especially home equity lines of credit. Changes in the prime rate do not directly affect
other types of mortgages, but the same factors that influence the prime rate also affect the interest rates of mortgage loans.

189.        Principal
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

190.        Principal Balance
The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining
balance.

191.        Principal, Interest, Taxes, And Insurance (PITI)
The four components of a monthly mortgage payment on impounded loans. Principal refers to the part of the monthly payment that reduces the
remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into
an escrow account each month for property taxes and mortgage and hazard insurance.

192.        Private Mortgage Insurance (MI)
Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most
lenders generally require MI for a loan with a loan-to-values (LTV) percentage in excess of 80 percent.

193.        Promissory Note
A written promise to repay a specified amount over a specified period of time.

194.        Public Auction
A meeting in an announced public location to sell property to repay a mortgage that is in default.

195.        Planned Unit Development (PUD)
A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of
the individual PUD unit owners.

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

197.        Purchase Money Mortgage
A mortgage on property given by a buyer, either to the seller or to a third party in order to secure a portion of the purchase price.

198.        Purchase Money Transaction
The acquisition of property through the payment of money or its equivalent.

199.        Qualifying Ratios
Calculations that are used in determining whether a borrower can qualify for a mortgage. There are two ratios. The "top" or "front" ratio is a
calculation of the borrower’s monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner’s association fees) as a
percentage of monthly income. The "back" or "bottom" ratio includes housing costs as will as all other monthly debt.

200.        Quitclaim Deed
A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

201.        Rate Lock
A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time
at a specific cost.

202.        Real Estate Agent
A person licensed to negotiate and transact the sale of real estate.

203.        Real Estate Settlement Procedures Act (RESPA)
A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

204.        Real Property
Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent
rights thereof.

205.        REALTOR®
A real estate broker who holds active membership with a local board of the National Association of Realtors. Only brokers who are members of
local real estate boards are entitled to use the trademark name “REALTOR”.

206.        REALTOR –ASSOCIATE
A salesperson who is associated with a REALTOR/Broker and belongs to the local Board of Realtors.

207.        Recorder
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."

208.        Recording
In Hawaii, the noting at the Bureau of Conveyances of the details of a properly executed legal document, such as a deed, a mortgage note, a
satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.

209.        Remaining Balance
The amount of principal that has not yet been repaid. See principal balance.

210.        Remaining Term
The original amortization term minus the number of payments that has been applied.

211.        Replacement Reserve Fund
A fund set aside for replacement of common property in a condominium, PUD, or cooperative project -- particularly that which has a short life
expectancy, such as carpeting, furniture, etc.

212.        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.

213.        Right Of Ingress Or Egress
The right to enter or leave designated premises.

214.        Right Of Survivorship
In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.

215.        Sale-Leaseback
A technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.

216.        Second Mortgage
A mortgage that has a lien position subordinate to the first mortgage.

217.        Security
The property that will be pledged as collateral for a loan.

218.        Seller Carry-Back
An agreement in which the owner of a property provides financing, often in combination with an assumable
mortgage.

219.        Servicer
An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often
services mortgages that have been purchased by an investor in the secondary mortgage market.

220.        Servicing
The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

221.        Setback
An ordinance prohibiting the erection of a building or structure between the curb or other established line and the setback line; the distance a
house must be set back from the street or the adjoining property in accordance with local zoning rules.

222.        Settlement Statement
See HUD1 Settlement Statement

223.        Severalty
Sole or independent ownership

224.        Subdivision
A housing development that is created by dividing a tract of land into individual lots for sale or lease.

225.        Subordinate Financing
Any mortgage or other lien that has a priority that is lower than that of the first mortgage.

226.        Survey
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments,
and other physical features.

227.        Sweat Equity
Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.

228.        Tenancy At Sufferance
A tenancy arising when the tenant wrongfully holds over after the expiration of his term. The landlord has the choice of evicting the tenant or
accepting him for a similar term and under the conditions of the previous holding.

229.        Tenancy by the Entirety
A special joint tenancy between spouses, with both spouses having equal undivided interest in the whole property. Upon the death of one
spouse, the surviving spouse succeeds to the entire property without the need of probate. An important aspect of this tenancy is that a creditor of
one spouse cannot force a partition sale of a property owned in tenancy by the entirety, as could a creditor of one spouse if title were held as joint
tenants.

230.        Tenancy in Common
A form of ownership of property between two or more persons in which each owner has an undivided interest in the whole property. Each owner
is called a co-tenant and the interest of each may be equal or unequal. Unlike a joint tenancy, there is no right of survivorship in a tenancy in
common. Thus, on death the interest of the deceased co-tenant will pass according to will or by intestacy, and probate will be required.

231.        Tenancy in Severalty
This tenancy is for an individual person. The individual holds the entire title. When the individual dies the title will usually pass through probate.
There is no right of survivorship.

232.        Time Is Of The Essence
In a contract, a requirement of punctual performance.

233.        Title
A legal document evidencing a person's right to or ownership of a property.

234.        Title Company
A company that specializes in examining and insuring titles to real estate.

235.        Title Insurance
Insurance that protects the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property.

236.        Title Search
A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

237.        Transfer Of Ownership
Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership:
the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of
possession of the property under a land sales contract or any other land trust device.

238.        Transfer Tax
See Conveyance Tax.

239.        Treasury index
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the results of auctions
that the U.S. Treasury holds for its Treasury bills and securities or is derived from the U.S. Treasury's daily yield curve, which is based on the
closing market bid yields on actively traded Treasury securities in the over-the-counter market.

240.        Triple Net Lease (Net Lease)
Lease under which the lessee pays the agreed upon rent plus all costs of maintenance, repair, real property taxes, insurance, utilities, etc.

241.        Truth-in-Lending
A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate
(APR) and other charges.

242.        Trustee
One who holds property in trust for another to secure the performance of an obligation.

243.        VA Mortgage
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).

244.        Variance
Permission obtained from the zoning authorities permitting the construction of a building or structure that is forbidden by present zoning
ordinances; a departure from the general rule.

245.        Vested
Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can
withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.

246.        Veterans Administration (VA)
An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee
protects the lender against loss and thus encourages lenders to make mortgages to veterans.

247.        Warranty Deed
A deed in which the grantor fully warrant a good clear title to the property; a deed that contains covenants of title.

248.        Zoning
An act of the city or county authorities by exercise of police power in regulating, controlling or specifying the type of use to which property may be
put in specific areas.x
www.MolokaiHawaiiRealEstate.com

The resource center for all your   
Molokai Hawaii real estate needs....

(808)658-0648
SusanMSavage@yahoo.com
      Realtor/Broker

Certified Residential Specialist (CRS)
Accredited Buyer Representative (ABR)
Short Sale/Foreclosure Resource (SFR
Susan Savage
Hawaii Office:






Friendly Isle Realty, Inc
P.O. Box 1980
Kaunakakai, HI 96770





7817 Ivanhoe AvenueSte.
101
La Jolla, CA 9203
7