D-G

Deed
The legal document that transfers ownership of a piece of property.

Deed of trust
A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan.

Default
The failure to fulfill a duty or promise or discharge an obligation, such as making monthly mortgage payments.

Deferred maintenance
Any repair or maintenance of a piece of property that has been postponed, resulting in a decline in property value.

Delinquent Mortgage
A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings.

Depreciation
The decline in value of a piece of property.

Disclosure
A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.

Down payment
The amount of money a buyer agrees to give the seller when a sales agreement is signed. Complete financing is later secured with a lender.

Draw
A payment made to subcontractors or suppliers from a construction loan.

Early occupancy
The condition in which buyers can occupy the property before the sale is completed.

End loan
The conversion from a construction loan to permanent financing a condominium buyer secures after all units in a project have been completed.

Environmental impact statement
A government-mandated evaluation of all aspects and effects a development will have on the environment of a proposed site.

Equity
A determination of the value of a property after existing liens are deducted.

Errors and omissions insurance
A policy that pays for any mistakes a builder or architect makes in a project.

Escrow
A neutral third party holds the documents and money involved in a real estate transaction and ensures that all conditions of a sale are met.. Escrow also refers to a special account that a lender establishes to hold monthly installments from the borrower to cover property taxes and insurance.

Escrow closing
Escrow closes when all conditions of a real estate transaction are met and the title of the property is transferred to the buyer.

Estate
The total assets of a person, including real property, at the time of death.

Fair Credit Reporting Act
A federal law passed in 1971 that regulates the activity of credit bureaus. It is designed to prevent inaccurate or obsolete information from staying in a consumer’s credit file and requires credit bureaus to have reasonable procedures for gathering, maintaining and disseminating credit information. The act also requires credit bureaus to show a consumer their credit file if the consumer presents proper identification, although the bureau reserves the right to charge a fee for doing so.

Fair Housing Act
Landmark federal law passed in 1965 and amended in 1988 that makes it illegal to deny rent or refuse to sell to anyone based on race, color, religion, sex or national origin. The 1988 amendment expanded the protections to include family status and disability.

Fannie Mae
The official name of the Federal National Mortgage Association, it is a congressionally chartered, shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.

Federal Housing Administration (FHA)
This government agency operates a variety of home-loan programs. Its most popular is the Sec. 203(b), program, which provides low-rate mortgages to buyers who make a down payment as small as 3 percent.

FHA loans
Mortgages that are insured by the Federal Housing Administration. The FHA’s 203(b) loan program provides low-rate mortgages to buyers who make a down payment as small as 3 percent. The agency also operates loan plans for investors and purchasers of rural property.

First mortgage
The primary mortgage on a property that has priority over all other voluntary liens.

Fixed installment
The monthly payment on a home loan.

Fixed-rate mortgage
A home loan with an interest rate that will remain at a specific rate for the term of the loan. About 75 percent of all home mortgages have fixed rates.

Flat fee
A set fee charged by a broker instead of a commission.

Flood insurance
zard coverage that is required in designated flood areas.

Forbearance
A course of action a lender may pursue to delay foreclosure or legal action against a delinquent borrower.

Foreclosure
The legal process reserved by a lender to terminate the borrower’s interest in a property after a loan has been defaulted. When the process is completed, the lender may sell the property and keep the proceeds to satisfy its mortgage and any legal costs. Any excess proceeds may be used to satisfy other liens or be returned to the borrower.

For Sale By Owner (FSBO)
The owner acts as the agent to avoid paying a sales commission.

Freddie Mac
The common name for the Federal Home Loan Mortgage Corporation, a congressionally chartered institution that buys mortgages from lenders and resells them as securities on the secondary mortgage market.

Fully amortized adjustable-rate mortgage
A mortgage that amortizes, or pays down, the balance of a loan.

Gift
A cash gift a buyer receives from a relative or other source. Lenders usually require a “gift letter” stating that the money will not have to be repaid.

Grace period
A specified amount of time to make a loan payment after its due date without penalty.

Graduated-payment mortgage (GPM)
A mortgage that requires a borrower to make larger monthly payments over the term of the loan. The payment is unusually low for the first few years but gradually rises until year three or five, then remains fixed.

Growing-equity mortgage
A fixed rate mortgage that increases payments over a specific period of time. The extra funds are applied to the principal.

Guarantee mortgage
A loan guaranteed by a third party, such as a government institution.