Legal Terms and Definitions

Google is one of my favorites!

hi CRB

glad to see you online. I too favor the search engines buts alway nice to have one solid place for reference as well. Sometimes you may want to dog a little deeper and dont really feel like searching though the engines. (smile) but yes the engines are great.

Welcome and we look forward to working with you.

Some you may already have Rina - Below you will find a number of terms that are related to the real estate and real estate financing world. Please note that we have tried to make this glossary as accurate as possible, but we do not guarantee its accuracy. This loan term glossary is meant to be used for informational purposes only.
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Acceleration Clause

A clause found in most real estate notes and mortgages that allows the lender to "call" the loan, making it payable in full upon the occurance of some event. Usually, this is possible upon the sale of a property.
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Adjustable Rate Mortgage (ARM) or Loan

A real estate mortgage or loan whose interest rate changes at a predetermined interval or period. Adjustable Rate Mortgages and Loans are tied to a specific index such as the LIBOR, 11th District Cost of Funds a US Treasuries Index (1 Yr, 5 Yr, 10 Yr T-Bill etc).
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Amortization

Amortization refers to the repayment of a loan or mortgage with regular installment payments that pay both principal and interest. Many people do not realize that the amount of principal and interest paid with each payment usually differs greatly and is "interest heavy" in the early part of the loan even though the payments remain the same each installment.
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Annual Percentage Rate (APR)

The true cost of a loan or mortgage expressed as a yearly rate. This includes items such as interest, mortgage insurance (if any), and origination points charged by a lender.
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Appraisal

A written estimate of a property's value. There are a number of different methods to determine a property's current or future value.
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Appreciation

An increase in the value of an asset (such as a piece of real estate or a house) due to market conditions.
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Assignment

The transfer of a contract from one party to another. Assignment commonly refers to the ability of one borrower to take the place of another on a real estate loan or mortgage. Having an assumable loan can make a property much more desireable to buyers, especially when money is tight in the marketplace.
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Bridge Loan

A short-term or temporary loan put into place until more permanent, long-term financing, is available. Many times private money or hard money loans are also referred to as Bridge Loans.
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Capital

Generic term for money and or property.
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Capital Markets

The financial markets where money and financial instruments are bought and sold. In our modern-day floating system, the Capital Markets determine interest rates and the real costs of money to borrowers.
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Cash Flow

The amount of money a property or business "throws off" during the normal course of operation, minus expenses and debt service.
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Collateral

The assets pledged to secure the repayment of a debt or loan.
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Debt

An amount owed.
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Debt Service

The regular amount paid to meet a debt or loan agreement. Usually expressed as a monthly or annual figure.
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Default

A failure to repay a debt according to the terms of a loan or mortgage.
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Delinquent

Overdue or unpaid sum on a loan or mortgage. Delinquent can refer to the fact that the loan currently has an overdue balance or to the amount actually overdue.
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dgadmin,
I was wondering if Anita's terms should be a sticky as well. Might be helpful so people can find them easier. Thanks.

For all the apprentices (newbie is a bad word here!)