a legal document that defines the conditions of a rental agreement
condominium
an individually owned housing unit in a building with several such units
cooperative housing
a form of housing in which a building containing a number of housing units is owned by a non-profit organization whose members rent the units
manufactured homes
a housing unit that is fully or partly assembled in a factory before being moved to the living site
zoning laws
restrictions on how the property in an area can be used
earnest money
a portion of the price of a home that the buyer deposits as evidence of good faith to indicate a serious purchase offer
points
prepaid interest charged by a lending institution for the mortgage
conventional mortgage
a fixed-rate, fixed-payment home loan with equal payments over 15, 20, or 30 years.
amortization
a reduction of a loan balance through payments made over a period of time.
balloon mortgage
a home loan with fixed monthly payments and a large final payment.
(ARM) adjustable-rate mortgage
a home loan with an interest rate that can change during the mortgage term due to changes in market interest rates.
rate cap
a limit on the increases and decreases in the interest rate charged on an adjustable-rate mortgage.
payment cap
a limit on the payment increases for an adjustable-rate mortgage.
growing-equity mortgage
a home loan agreement that provides for payment increases to allow the amount owed to be paid off more quickly.
buy-down
an interest rate subsidy from a home builder, a real estate developer pr by the buyer that reduces a home buyer's mortgage payments during the first few years of the loan.
second mortgage
a cash advance based on the paid-up value of a home
reverse mortgage
a loan based on the equity in a home, that provides elderly homeowners with tax-free income and is paid back with interest when the home is sold or the homeowner dies
refinancing
the process of obtaining a new mortgage on a home to get a lower interest rate.
closing costs
fees and charges paid when a real estate transaction is completed
title insurance
insurance that, during the mortgage term, protects the owner or the lender against financial loss resulting from future defects in the title and from unforeseen property claims not excluded by the policy.
deed
a document that transfers ownership of property from one party to another.
escrow account
money, usually deposited with the lending institution, for the payment of property taxes and homeowner's insurance.
appraisal
an estimate of the current value of a property.
insurance
protection against financial loss
insurance company
a risk-sharing firm that assumes financial responsibility for losses that may result from an insured risk
policy
a written contract for insurance
premium
the amount of money a policyholder is charged for an insurance policy.
risk
chance or uncirtainty of loss
peril
the cause of a possible loss
hazard
a factor that increases the likelihood of loss through some peril.
pure risk
a risk in which there is only a chance of loss
speculative risk
a risk in which there is a chance of either loss or gain
self-insurance
the process of establishing a monetary fund to cover the cost of a loss.
liability
legal responsibilities for the financial cost of another person's losses or injuries
negligence
failure to take ordinary or reasonable care in a situation.
strict liability
a situation in which a person is held responsible for intentional or unintentional actions
vicarious liability
a situation in which a person is held legally responsible for the actions of another person
homeowners insurance
coverage for a place of residence and its associated financial risks
personal property floater
additional property insurance to cover the damage or loss of a specific item of high value.
household inventory
a list or other documentation of personal belongings, with purchase dates and cost information.
medical payments coverage
home insurance that pays the cost of minor accidntal injuries on one's property.
endorsement
an addition of coverage to a standard insurance policy.
coinsurance clause
a policy provision that requires a homeowner to pay for part of the losses if the property is not insured for the specified percentage of the replacement value.
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