A  B  C  D  E  F  G  H  I  J  L  M  N  O  P  Q  R  S  T  U  V  W  Z

BOOKMARK THIS PAGE

Mortgage and Real Estate Glossary ~ R

Rate lock

A lender's guarantee on a specific interest rate. Until you request a rate lock, a loan's interest rate quoted by either a lender or broker is apt to change due to market fluctuations. The rules on how to do this will vary from lender to lender and broker to broker, but typically you can request a rate lock after you submit your signed loan application (1003) and other requested forms. Do not let a low rate slip through your fingers. Once you have settled on a rate, the lender usually guarantees the rate for 15, 30, 45 or 60 days. Rate lock is also called lock-in rate.
See: Lock period

Real Estate Settlement Procedure Act (RESPA)

A federal law that says a lender must give a borrower an estimate of closing costs within three business days of applying for a loan. After you apply for a loan, the lender must give you a Good faith estimate within 3 business days. The Good faith estimate is a document with a detailed breakdown of the costs that you will need to pay at closing. RESPA also requires that lenders give you a Uniform Settlement statement or HUD-1 before or at closing, which lists the final closing costs. This law isn't taken lightly - if lenders don't supply you with this information, they'll be slapped with a $10,000 fine and possibly jail time.
See: Truth-in-lending act

Real property

Land and anything permanently attached to it. Your home, your backyard, and even your roses planted in the yard are examples of real property. Real property can not be moved or taken away without lawful permission. If you want to give or sell someone real property, you must use a document called a deed.
See: Deed,

Record

To make a document available to the public. Your home's purchase is official the moment that you record the deed at the county courthouse. Usually, the title company or escrow agent is responsible for recording the deed and you will be responsible for a small fee. If you wanted to do a little investigating into the former owners of your home, you could go to the county clerk's office and check the files, this list of owners is called the chain of title. Any claims on your home, including a mortgage and liens for unpaid debts, are also recorded there. The county clerk who records a deed can be called the county recorder or the registrar of deeds.
See: Title search, Lien

Refinance

When a homeowner replaces their current mortgage with a new one. Refinancing can take several hundred dollars off your monthly mortgage payment. You replace your existing loan with another loan for the same amount, but with a lower interest rate. For example, if you trade in your $150,000 loan, 25-year fixed mortgage at 10% interest for the same loan at 7% interest, you'll save $291 per month. Refinancing makes sense when market interest rates drop one or more percentage points lower than your present rate. Also, you need to consider how long you plan to stay in your home to break even on the costs to refinance.

The steps to refinance are almost the same for a home purchase:
(1) you fill out a standard loan application
(2) the lender approves the loan based on your income, debt and credit history
(3) you pay closing costs, such as theappraisal and processing fee
See: Closing costs

Regulation Z

A federal law that requires a lender to give borrowers the annual percentage rate (APR). The APR helps borrowers compare one loan to another since it factors in not only the interest rate but also all the fees and closing costs that you need to pay. APR, though, is not always the best measure of comparison since not all the lenders include the same fees and closing costs. Regulation Z is also called the Truth-In-Lending Act.
See: APR

Remaining balance

The total amount that a borrower owes on a loan.
See: Principal balance

Remaining term

The amount of time until a loan is completely paid off. If you are in your fifth year of paying off a 30-year loan, the remaining term is 25 years.
See: Maturity

Rent

Payment in exchange for the temporary use of something. When you pay rent for an apartment or house, you are not building equity unless your rent payments are going towards a down payment to own the home in the future. The owner of the property is called a landlord and the renter is called a tenant. The rent is mutually agreed upon by both the landlord and the tenant, and is written into a rental agreement or lease.
See: Lease

Repayment plan

A time table of mortgage payments over a loan's term that shows how much is applied to both the principal and interest.
See: Mortgage banker

Reset

A type of loan that has a low interest rate for the first 5 or 7 years, then adjusts to a higher interest rate for the remaining 25 or 23 years. Resets are also called two-step mortgages.Resets are ideal for first-time buyers and if you have a job that demands that you relocate often. Your monthly loan payments are lower for those first years than with a regular 30-year fixed loan, and when it is time to adjust to the higher rate, you can do so at no cost. The new rate that you get after 5 or 7 years though can be high, which is when most people decide to move.
See: Fixed rate mortgage

Residential loan application form (1003)

The name of the standard loan application that all lenders require a borrower to complete when applying for a loan.
See: Application

Reverse mortgage

A loan for home owners who have already paid off their mortgage but want to tap into their home's equity. Reverse mortgages come in handy for older home owners who might have a financial hardship or who just want some extra cash without having to uproot and sell their homes. You can either receive a lump-sum loan, a line of credit or a monthly check based on the amount of equity in your home. This money is also tax-free, since it is a loan. When you sell your home, you use your home's equity to pay off the loan and interest. Keep in mind that you need to pay closing costs, such as a loan origination and processing fees. Typically, to qualify for a reverse mortgage, you need to be over 60.

Revolving credit

A credit line that is restored as the borrower pays off what is owed. Credit cards and home equity credit lines have revolving credit. For example, you could go on a shopping spree using your Visa card and charge up to $600. As you pay off your Visa bill, your $600 credit amount will be restored and you can go for the next round of shopping. Loans, such as mortgages and student loans don't have revolving credit.

10 minute ~ easy qualification. Call directly...800-931-0011