Real Estate Definitions


As part of our mission to provide the highest customer service, we've provided a helpful list of real estate definitions for you. To view a Glossary of Mortgage Terms as a pdf file, click here. You are important to us, so make sure that Integrity First Title is your closing partner of choice!

Glossary of Mortgage Terms A-C

Adjustable Rate Mortgage (ARM): A mortgage in which the interest rate is adjusted periodically according to a pre-selected index.
Amortization: Payment of a debt in regular, periodic installments of principal and interest as opposed to interest only payments.
Annual Percentage Rate (APR): A term used in the Truth-in-Lending Act to represent the percentage relationship of the total finance charge to the amount of the loan. The APR reflects the cost of your mortgage loan as a yearly rate. It will be higher than the interest rate stated on the note because it includes, in addition to the interest rate, loan discount points, fees and mortgage insurance.
Application: A printed form used by a mortgage lender to record necessary information concerning a prospective mortgage.
Application Fee: A sum of money paid towards estimated initial mortgage processing expenses such as appraisal and credit report..
Appraisal: A report made by a qualified person setting forth an opinion or estimate of property value. The term also refers to the process by which this estimate is obtained.
As Separate Property: Ownership in real property which is to be specifically excluded from community property.
Assessed Valuation: The value that a taxing authority places on real or personal property for the purpose of taxation.
Assessment: A charge against a property for purpose of taxation. This may take the form of a levy for a special purpose or a tax in which the property owner pays a share of the cost of community improvements according to the valuation of his or her property.
Borrower: A person (also known as mortgagor) who receives funds in the form of a loan with an obligation to repay principal with interest.
Buydown: Money advanced by an individual (builder, seller, etc.) to reduce the monthly payments for a home mortgage either during the entire term or for an initial period of years.
Cash to Close: Liquid assets that are readily available to be used to pay the closing costs involved in a closing of a mortgage transaction.
Closing: The consummation of a real estate transaction. The closing includes the delivery of a deed, financial adjustments, the signing of notes, and the disbursement of funds necessary to complete the sale and loan transaction.
Closing Costs: Money paid by the borrower in connection with the closing of a mortgage loan. This generally involves an origination fee, discount points, appraisal, credit report, title insurance, attorney's fees, survey, and pre-paid items such as tax and insurance escrow payments.
Closing Statement: A form used at closing that gives an account of the funds received and paid at the closing, including the escrow deposits for taxes, hazard insurance, and mortgage insurance.
Co-Borrower: Additional borrower(s) whose income contributes to qualifying for a loan and whose name(s) appears on documents with equal legal obligations.
Collateral: Property pledged as security for a debt, such as the real estate pledged as security for a mortgage.
Commitment (Loan): A binding pledge made by the lender to the borrower to make a loan, usually at a stated interest rate within a given period of time for a given purpose, subject to the compliance of the borrower to stated conditions.
Commitment Fee (Loan): Any fee paid by a potential borrower to a lender for the lender's promise to lend money at a specified rate and within a given time period. Commitment Letter: A formal offer by a lender stating the terms under which it agrees to loan money to a home buyer.
Conforming Loan: Conventional home mortgages eligible for sale and delivery to either the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC). These agencies generally purchase first mortgages up to loan amounts mandated by Congressional directive.
Conventional Mortgage: A mortgage not obtained under a government insured program (such as FHA or VA).
Credit Report: A report detailing an individual's credit history. Deed of Trust: An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary) and reconveyed upon payment in full.