Mortgage & Real Estate Terms Defined G-M
Basic Terms Used for Mortgage & Real Estate Transactions
Loans may involve other terms. In the event you don't understand some of these terms, ask for help from your lender or attorney.
- General Warranty Deed
- The seller protects the buyer from other requisitions to the title of the property.
- Government National Mortgage Association (GNMA, Ginnie Mae)
- Branches of a government agency HUD that purchases VA and FHA loans then sells Ginnie Mae securities to investors on Wall street.
- Grantee
- Buyer named in the deed.
- Grantor
- Seller named in the deed.
- Graduated Payment Mortgage (GPM)
- The first few years of the mortgage payments are low then gradually increase until the loan is completely amortized.
- Grandfather Clause
- A change in the law that conflicts with the previous law. However, under the grandfather clause a business, etc. is still allowed to continue under the previous law set forth.
- Hazard Insurance
- Fire Insurance-Insurance on the home against fire and other risks.
- Homeowner's Insurance-additional coverage against theft and liability.
- Homeowners Association
- Homeowner's of a particular area, community, planned unit development (PUD), or complex that come to an agreement about the rules and regulations along with property management.
- Homestead
- A law in which the owner and his family can not be forced into sale because of bad credit or debits that may have incurred.
- Homestead Exemption
- Available in some states - this causes the assessed value of a principal residence to be reduced by the amount of the exemption for the purposes of calculating property tax.
- Home Warranty Plan
- Insurance Purchased around the closing period. The insurance that covers appliances, heating/cooling systems, etc.
- Housing and Urban Development
- Housing and community development project implemented by government agencies.
- Housing Code
- Residential homes must follow a set of standard safety and health regulations.
- HUD 1
- A closing agent makes a closing document that states the settlement cost of the loan. Once the agent finishes the document it is sent to the buyer at closing.
- Improvements
- Adding value to raw land by the development of homes, streets, and buildings, etc.
- Impound Account
- Partial amounts of the borrower's monthly payments which are used to pay certain services such as taxes, hazard insurance, mortgage insurance, lease payments, and other such things.
- Income Property
- Property that produces an income, e.g. building offices, townhouses, apartments.
- Index
- An enumeration that graphs the current economical situation. Indexes are then used to change the rate of the loan.
- Ingress and Egress
- The ability to pass through a piece of land however not allowing to park on it.
- Joint and Several Liability
- A creditor can ask to be paid in full by the borrower, in turn the borrower is responsible for paying the full debt not just a prorated portion.
- Joint Tenancy
- Property owned by 2 or more people and in common behalf they follow the law that if one owner dies the joint owner receives the property (survivorship).
- Judgment Lien
- The claim made on the property as a result from debt.
- Jumbo Loan
- A loan larger then the regulations instituted by Fannie Mae or Freddie Mac.
- Junior Mortgage
- A mortgage which is in lower rank to another. In many cases, other mortgages in higher ranking to the junior mortgage will be paid first.
- Land Contract
- The buyer is allowed to use and occupy the land however, the deed is not given to the buyer until the seller is given the full sale price.
- Lease with Option to Purchase
- During the term of the lease or other defined term, the lessee has the option to purchase the property.
- Lessee
- A person who is renting property by means of a lease.
- Lessor
- A person who is renting the property to the lessee by means of a lease.
- Lien
- The claims of debt, judgment, mortgage or taxes brought against a property.
- Loan Application
- Detailed information required about the borrower and the property. This information must be given to the lender before a loan can be approved.
- Loan origination fee or points
- The fee charged by a mortgage lender or broker for originating a loan. Not to be confused with discount points which are used to buy down the rate of interest.
- Loan to Value Ratio (LTV)
- Total amount of loan divided by the property value.
- Loan Servicing
- The acts of collection of loan payments, property tax and escrows, foreclosing on defaulted loans, remitting payments.
- Margin
- A fixed amount added to the loan index that is used to determine the interest rate on an adjustable mortgage.
- Market Value
- The lowest price a seller is willing to accept and the highest a buyer is willing to pay on a given property. Market value may fluctuate during any given period of time.
- Mechanics Lien
- The ability for an unpaid contractor or subcontractor to process a lien against property for compensation.
- Mortgage
- A written statement that forms a lien on property as security for the payment of certain debts.
- Mortgage Backed Security (MBS)
- A bond that is protected/secured by mortgage loans.
- Mortgage Banker
- One who has expertise in originating mortgage loans, servicing mortgage loans, and selling mortgage loans to investors.
- Mortgage Broker
- Places appropriate loans with borrowers and lenders. Eventually they (mortgage brokers) are paid when there is a closing on the loan.
- Mortgagee
- The lender.
- Mortgagor
- The borrower.
- Mortgage Note
- A written statement that holds the party responsible (mortgagor) for paying off the loan. The statement is in secured by a mortgage and is used as proof to show indebtedness. In general, the note shows the debt that the mortgage covers and holds the mortgagor responsible for repaying.
