Glossary of commonly used terms and phrases

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Radon - A radioactive gas found in some homes that in sufficient concentrations could cause health problems.
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Rate - The annual rate of interest on a loan, expressed as a percentage of 100.
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Rate and Term Refinance - nPaying off an existing loan with the proceeds from a new loan, using the same property as collateral.
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Rate Caps - (Also called 'Interest Rate Caps'). A limit on the amount of which the interest rate charged, either at each adjustment period or over the life of the loan.
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Rate Index - An index used to determine interest rate changes for certain adjustable rate mortgages (ARM).
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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.
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Ratification - The affirmation of a prior act that was not legally binding and making it a legal effect.
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Raw Land - Land without added improvements such as sewers, utilities, streets, or structures.
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Real Estate - Land and permanently affixed items such as buildings, fences, etc.
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Real Estate Broker - A middleman or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.
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Real Estate Investment Trust (REIT) - A mutual fund that sells shares of ownership and must be invested in real estate or mortgages.
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Real Estate Market - A market for potential buyers or sellers of real property at a given time.
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Real Estate Owned (REO) - A term frequently used by lending institution as applied to ownership of real property acquired for investment or as a result of foreclosure.
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Real Estate Settlement Procedures Act (RESPA) - A Federal law that requires lenders to provide home mortgage borrowers with information about known or estimated settlement costs.
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Real Property - Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.
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Realtor - A real estate broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.
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Rebate Compensation - Received from a wholesale lender, which can be used to cover closing costs, or as additional revenue for the broker. Loans with rebates often carry higher interest rates.
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Recapture of Depreciation - Upon the sale of a property, the amount of depreciation taken above straight-line depreciation.
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Recasting - Revision of the terms of an existing mortgage to cure delinquency, such as extending the loan or modifying the interest rate.
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Recission - The cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent.
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Reconveyance - A transfer of title from a trustee to the owner of real estate, when the title is held as collateral, at the time the trust deed is paid in full.
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Recorder - The public official who keeps records of transactions that affects real property in the area.
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Recording - The noting in the registrar’s office 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.
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Recording Fee - Fee charged by a government for entering into the public record a real estate purchase or sale.
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Redemption - A defeasable title to land that is cancelled by a mortgage foreclosure or tax sale of the property.
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Redemption Period - The period of time allowed during which an owner may buy back their foreclosed properties by paying all delinquent mortgage payments, plus interest and fees. The time period varies state by state.
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Refinancing - The process of paying off one loan with the proceeds from a new loan using the same property as security.
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Rehabilitation Mortgage - A mortgage created to cover the costs of repairing, improving and acquisition of an existing property.
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Rehabilitation Tax Credit - The Tax Reform Act of 1986 allows a 20% tax credit for rehabilitating historic structures and 10% for buildings in service after 1936.
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Reinstatement - Bringing a note, mortgage, deed of trust, etc. from default to good standing.
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Release of Mortgage - A document distributed by the mortgagee when the mortgage loan has been paid in full.
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Remaining Balance - The amount of principal that has not yet been repaid.
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Remaining Term - The original amortization term minus the number of payments that have been applied.
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Renegotiable Rate Mortgage - See "Adjustable Rate Mortgage (ARM)"
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Rent Step-Up - An agreement in which the rent increases every period for a certain amount of time or for the duration of the lease.
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Repayment Plan - An arrangement made to repay delinquent installments or advances. Lenders' formal repayment plans are called 'relief provisions.'
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Replacement Reserves Funds - A fund set aside from net operating income (NOI) to pay eventual wear and tear of a property. Amount is determined by property type. Normal reserves on a multi-family would be $250-$350 per unit, and on retail deals it is usually done by square foot.
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Residential Mortgage Credit Report (RMCR) - A report requested by your lender that utilizes information from at least two of the three national credit bureaus and information provided on your loan application.
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Residual Income - The amount of money remaining after mortgage payment and all other debts are paid: typically used with VA loans.
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Restraint of Alienation - Any restriction placed against the vesting/sale of a property. Some restrictions are allowed, but must conform to the rule against perpetuities and free right of an owner to sell.
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Restrictive Covenants - Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may 'run with the land,' binding all subsequent purchasers of the land, or may be 'personal' and binding only between the original seller and buyer. In the determination of whether a covenant runs with the land, or is personal property is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style, or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area. (This latter discriminatory covenant is unconstitutional and has been declared unenforceable by the U.S. Supreme Court).
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Reverse Mortgage - An arrangement in which a homeowner borrows against the equity in his/her home and receives regular monthly tax-free payments from the lender.
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Revolving Credit - Open lines of credit that are subject to adjustable payments in accordance with the balance, such as credit cards.
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Revolving Liability - A credit arrangement, such as a credit card, that allows a customer to borrow against a pre-approved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.
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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.
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Right of Ingress or Egress - The right to enter or leave designated premises.
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Right of Survivorship - In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
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Right of Way - Land set aside as an easement or in fee, either by agreement or condemnation, to have the right to be on or travel on.
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RTC (Resolution Trust Corporation) - Formed to resolve thrift failures over the next three years and dispose of their assets and liabilities.
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Rural Housing Service (RHS) - A U.S. Department of Agriculture program that provides various financing programs to aid in the development of rural America.
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