REAL ESTATE GLOSSARY
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deed
The legal document conveying title to a property.
deed-in-lieu
Short for "deed in lieu of foreclosure," this conveys title
to the lender when the borrower is in default and wants to
avoid foreclosure. The lender may or may not cease
foreclosure activities if a borrower asks to provide a
deed-in-lieu. Regardless of whether the lender accepts the
deed-in-lieu, the avoidance and non-repayment of debt will
most likely show on a credit history. What a deed-in-lieu
may prevent is having the documents preparatory to a
foreclosure being recorded and become a matter of public
record.
deed of trust
Some states, like California, do not record mortgages.
Instead, they record a deed of trust which is essentially
the same thing.
default
Failure to make the mortgage payment within a specified
period of time. For first mortgages or first trust deeds, if
a payment has still not been made within 30 days of the due
date, the loan is considered to be in default.
delinquency
Failure to make mortgage payments when mortgage payments are
due. For most mortgages, payments are due on the first day
of the month. Even though they may not charge a "late fee"
for a number of days, the payment is still considered to be
late and the loan delinquent. When a loan payment is more
than 30 days late, most lenders report the late payment to
one or more credit bureaus.
deposit
A sum of money given in advance of a larger amount being
expected in the future. Often called in real estate as an
"earnest money deposit."
depreciation
A decline in the value of property; the opposite of
appreciation. Depreciation is also an accounting term which
shows the declining monetary value of an asset and is used
as an expense to reduce taxable income. Since this is not a
true expense where money is actually paid, lenders will add
back depreciation expense for self-employed borrowers and
count it as income.
discount points
In the mortgage industry, this term is usually used in only
in reference to government loans, meaning FHA and VA loans.
Discount points refer to any "points" paid in addition to
the one percent loan origination fee. A "point" is one
percent of the loan amount.
down payment
The part of the purchase price of a property that the buyer
pays in cash and does not finance with a mortgage.
due-on-sale provision
A provision in a mortgage that allows the lender to demand
repayment in full if the borrower sells the property that
serves as security for the mortgage.
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