We are committed to making the purchase or sale of your home as simple and easy as possible. During this process, you may encounter real estate terminology that is new to you. Following is a guideline of real estate terms, as well as financial and architectural terms to help you during the purchase or sale of your home.
Freddie Mac is the nickname for Federal Home Loan Mortgage Corporation (FHLMC), a corporation wholly owned by the Federal Home Loan Bank System that purchases FHA, VA, and conventional mortgages.
Frieze board is the wooden member fastened under the soffit against a wall.
A front foot is a linear foot of property frontage on a street or highway.
A full bath is a bathroom that consists of a sink, toilet, and a bathtub or shower.
A fully amortizing mortgage is a mortgage with scheduled uniform payments that will fully pay-off the loan over the term of the mortgage.
Functional obsolescence is a flawed or faulty property that is rendered inferior because of advances or changes.
A general agent refers to the entity that has full authority over a property of the principal, such as a property manager.
A general lien is a lien that attaches to all of the property of a person within the court’s jurisdiction.
A general warranty deed is a deed denoting an unlimited guarantee of title.
Ginnie Mae is the nickname for Government National Mortgage Association (GNMA), a U.S. government agency that purchases FHA and VA mortgages.
A girder is the main beam in a structure that spans the distance from one side of the foundation to the other.
A Good Faith Estimate is an estimate of the fees a mortgage borrower will be required to pay at closing. It is required by Federal law that the lender provides…
In a mortgage, the grace period refers to a specified time frame in which payment may be made without the borrower being in default.
A graduated lease is a lease in which the rent changes from period to period over the lease term. This type of lease is usually used by a new business…
A graduated payment mortgage has payments that are lower in the early years but increase on a scheduled basis until they reach a level of amortization.
A “grandfather clause” allows an activity to continue that was once considered acceptable or legal, but has since had the rules or laws changed. An example of this is when…
A grant is a transfer of title to real property by deed.
A gross lease is a lease in which the lessor pays all costs of operating and maintaining property, including the property taxes.
A ground lease is a long-term lease of unimproved land and is usually for construction purposes.
The habendum clause is the statement in a deed that begins with the words “to have and to hold” and describes the estate granted.
A half bath, or powder room, has a sink and toilet, but does not have a bathtub or shower.
Headers are wooden reinforcements for the placement of doors and windows.
A hectare is the metric system equivalent to 2.47 acres.
Holding period refers to the length of time a property is owned.
A holdover tenant is a tenant that remains in possession of a property after a lease terminates.
A home equity loan is a loan made against the equity in a home.
Compare this ratio to the simpler but less accurate price-rent ratio.
House rules are building rules regulating the conduct and responsibilities of homeowners as they affect the building’s common areas and services.
The housing expense ratio is the relationship of a borrower’s monthly payment obligation on housing (principal, interest, taxes, insurances and other applicable housing expenses) divided by gross monthly income, expressed…
HVAC is an acronym that stands for heating, ventilation and air conditioning.
A hydronic system is a process in an HVAC system where liquids are heated or cooled.
Hypothecate is to pledge property as security for the payment of a debt without giving up possession.
Improvements are changes or additions made to a property. These typically increase the value of the property.
Indemnification is the reimbursement or compensation paid to someone for a loss already suffered.
Index is a benchmark, usually a published interest rate, such as a one-year London Interbank Offered Rate (LIBOR) security yields, used to calculate the interest rate of an adjustable rate…
An index lease is a lease with a method of determining rent by an index, such as the LIBOR index.
An ingress is the right to enter a parcel of land, usually used as “ingress and egress”, or both entering and leaving.
An injunction is a court instruction to discontinue a specified activity.
Special rights offered to tenants occupying apartments in a building in the process of converting to a co-op or condo, giving them the exclusive right to buy their apartments for…
An examination of a property by a qualified inspector or engineer to understand the condition and to check for structural damage, termites, any required repairs or equipment replacement, etc.
An installment sale is a property sale in which the purchaser pays the purchase price over a period of years. The seller recognizes gain for tax purposes by the proportion…
Insurable interest is the amount of property qualifying for insurance.
The insured value is the amount that a structure is insured and should include the cost of replacing the structure if completely destroyed.
The interest rate is the cost of borrowing money from a lender. Rates will vary and will change over time.
The interest-rate spread is the differential between the retail interest rate charged to a borrower and the wholesale rate accepted by the financial industry when acquiring home mortgage loans. The…
Interim financing is a short-term or temporary loan such as a construction or bridge loan.
Interim interest is interest owed by the borrower to the lender on the mortgage loan from the day of the closing top the date covered by the first payment.
Intestate is the condition that occurs when someone dies without a valid will.
Involuntary alienation is the transfer of title to real property as a result of a lien foreclosure sale, adverse possession, filing a petition in bankruptcy, condemnation under power of eminent…
Joint tenancy is a form of co-ownership that includes the right of survivorship.