FORMAL - INFORMAL

Real Estate Terms Plus

__________________________________________________________Glossary

Formal – Informal Glossary in Matters of Real Estate

This Glossary is included for established, new, and hopeful US private home decision makers who have or will one day consider an optional or better approach to navigating the private home environment. In addition, these are provided to stimulate relative ideas. Finally, many of the terms and phrases presented here are directly relative to aspects of home improvement with respect to resident-contractor relations.

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

A

Addendum: in contracting, a legal document containing additional and updated terms of agreement to an original contract and signed by all parties to that original agreement.

Addition: normally something legally constructed on or added to the property as a permanent component. Otherwise referred to as ‘betterment.’

Adjustable interest Rate: A loan with a fluctuating interest rate.

Advocate: someone or agency which intercedes for, favors, or promotes a cause affecting the lives of people.

Amortization: reducing the amount of principal owed on a loan through an installment plan for paying scheduled regular payments in addition to relative, incremental interest and fees.

Apartment: a dwelling unit in a multi-residential complex which people lease, rent, or otherwise finance as a condition for being allowed to stay there; also, a condominium unit.

Appraisal: a professional estimate of the market value of real estate.

Arbitration: the process of resolving business and other issues through an independent, duly authorized third party.

Arrears: overdue debts.

Assessment: the activity of a locally authorized assessor who inspects a property, estimates its value, and recommends what the owner’s local tax obligation will be.

Assumption: buyer taking on mortgage obligations once belonging to seller.

Auction: for our purposes, an event when a property on sale can be obtained by the party who offers the highest bid.

b

Back-end Ratio: residual of gross monthly income after all your regular monthly bills are paid.

Bankruptcy: legal declaration of lack of sufficient funds to address debt without incurring undue hardship. A legal protection wherein a debtor might be protected from threats, penalties, and badgering by creditors in relation to exclusive and clearly defined debt.

Bio-hazard [colloquial]: an inept contractor who charges exorbitant rates. Also 'High Roller'.

Bond [Performance]: contextually, in many states this entails coverage a contractor or tradesperson is required to have in the event he or she has challenges fulfilling exclusively identified, project-related obligations. Although there are other types of bonds, the present focus is on the performance bond. It reflects a primary obligation a contractor must professionally complete the promised home improvement, remodel, refurbishment, and even construction for which he or she received partial or full compensation. However, if the contractor does shoddy work. and is not bonded, the customer might have to file a civil lawsuit to recoup funds in lieu of the fact that the contractor breached the agreement. This is evidenced by the below-par performance. On the other hand, if he or she is bonded, then a claim can be filed with the contractor’s bond agent. Ideally, the claimant or customer can then be reimbursed for costs and expenses related to the contractor’s poor performance on the property.

Example: contractor has coverage for up to $50,000. Damage to your property from her or his mistakes was upwards to $50,000. Once all documentation is submitted to the bond agency and is confirmed, it will usually release that $50,000 amount to you. The contractor is then liable to the bond agency for that amount, plus any related fees.

Note: if damage is above $50,000, usually the contractor is personally liable for paying the customer whatever that overage might be. Averagely, in this scenario, the bond agent is exclusively liable for refunding the customer an amount up to $50,000. Nevertheless, this is obviously not the only utility of a bond. Ref.

Bridge Loan: a loan towards meeting the down payment and other financial requirements for another home before selling the one you already have.

C

Cash-Out Refinance: a method which can be used by the homeowner to get cash via taking out a second mortgage loan. This is done through applying for and having the loan approved by either the principal lender the borrower used to obtain the first mortgage loan, or a different lending source. Although most advice in relation to Cash-Out Refinance suggests the borrower takes out a loan in an amount greater than what is owed on the original mortgage, that is not always the scenario since a borrower can find a lender to grant the loan at an amount lower. Subsequently, at a lower or higher amount of the requested loan, the Cash-Out-Refinance transaction is similarly consummated. The following example exclusively refers to a borrower who wants to land a better mortgage deal by getting cash-out from the present mortgage equity of the first mortgage to finance the second mortgage with more palatable terms: Since the borrower first moved into the home years ago the monthly obligations on a $300,000 loan were dutifully met. Although the borrower has cumulatively made $100,000 in monthly payments so far, circumstances are such that the borrower decided to seek being approved for the second loan. After all, the property was recently appraised at the market value of $750,000. Nonetheless, the borrower opts to refinance or take out a second mortgage loan for $600,000. In effect, the borrower fills out all necessary documents, pays related fees out-of-pocket, and after a reasonable waiting period the loan is approved. Now with this $600,000 increase in the borrower’s funds availability, a portion goes to paying off the remaining balance of $200,000 for the first mortgage. Meanwhile the second mortgage is intact and active. It has replaced the first mortgage. Succeeding there, the borrower then uses another portion of the refinance funds towards closing a small business deal offered at a convenient cut-rate value of $150,000. Finally, the borrower still has enough residual cash funds to save or to use as the mood strikes.

*The downside is that the borrower is once again at square one on mortgage payments.

Change Order: in home improvement, it is a document which lists any modifications to be made to the original project agreement and consequential differences in the original price for the project.

Collateral: in mortgage lending, property used for security on a loan against irreparable default.

Condominium: a free-standing house, duplex, or multiplex dwelling unit owned by one or more residents which usually is or are governed by the same management team or Board.

Consumer-Contractor Relations: business relationship between consumer and contractor. same as Resident-Contractor Relations.

Contract: an agreement between two or more parties to assist each other for mutual benefit. in home improvement, the parties are primarily comprised of residents who order the project, and tradespersons who promise to deliver skillfully and loyally.

Contractee: anyone who signs a contract with another as a condition for receiving specific service. Variously, it can pertain to property owner, lessee, or renter who signs a service agreement with contractors engaged in home-related jobs.

Contractor: an individual who is hired on a temporary, per project basis to provide courtesy, patience, labor, expertise, materials, supplies, and m to fulfill a specific contract-related service. Also referred to as Home Service Contractor, Tradesperson, and Pro.

Contract-related: activity which centers around a contractual agreement.

Corrupt Contractor: a dishonest individual working in the contracting field.

Cost Assessment: in home improvement, determining in advance whether it would be more expensive hiring a contractor than it would be if you tackled the issue without one. In general, entails meticulous calculation of how much an activity or project would cost to best evaluate feasibility of spending decisions.

Creative Calculations: unsubstantiated statements, quotes, and estimates without confirmable data.

D

Debt-to-Income Ratio: a comparison of average gross income with average monthly or annual debt. Normally gauged by a person’s gross monthly or annual income against average monthly or annual debt. To honest lenders, if a potential borrower has monthly or annual debt greater than what he or she earns, this poses an extraordinary default risk which is best not to pursue.

Deed: signed document declaring who owns a property. Also defined as Title.

Deed of trust: a regular deed signed over to a buyer, yet, instead of being in the buyer’s possession, it is kept by a third party against the buyer’s default; a physical deed usually held in escrow temporarily against a new homeowner’s default on her or his mortgage or other real estate loan.

Default: failure to make good on promised action or activity. Example: failure to make payments on a loan as promised.

Delegation: assigning actions or activities to someone else.

Delayed Financing: in real estate, a technique which a buyer or borrower uses to purchase a property using her or his own funds with intent to apply for a Cash-Out Refinance mortgage loan. See > Cash-Out Refinance.

Disclosure: in real estate, it normally refers to you or others disclosing the presence of defects, malfunctions, inadequacies, and more, around the property that can influence the sale or purchase of your home. Revealing.

Discovery Technique: a working strategy wherein there is intent on doing credible research to find out how to resolve challenges. For example, within context, it is when a resident searches the name of a contracting entity and the name of the individual operating it to see whether there are outstanding complaints.

Duplex: a private residential structure with two separate living units or households.

E

Earnest Money Deposit: this is a 'holding fee.' It keeps the deal, for example, to buy a particular house you need, available to you, exclusively. This, of course, applies until you arrive at a final decision whether to make the purchase. If yes, then the Earnest Money Deposit is applied to the closing price; if not, you forfeit any holding privileges to the property.

Easement: the legal right for use of real estate you do not own.

Eminent Domain: the right government must possess real estate from one or more private tenants for government or public use. In exchange, the government offers reasonable compensation for referenced tenant[s] to relocate.

Equity: in home real estate, the difference between the market value of your home and how much you still need to pay until the mortgage is paid off.

Escapism: in home improvement, leaving it up to the contractor to determine what actual expenditures are or will be without questioning or knowing whether the bid or estimate is unfair or unrealistic. Note: some bids are too high, others are too low for the nature of project needing attention. Propety owners should always take the initiative to consult various sources to ascertain the credibility of contractor pricing.

Escrow: a process wherein something is held back pending the fulfillment of a required precondition. Example: a student’s parents have saved $40,000 in a trust fund for their daughter to afford a down payment on any home she wanted. But she will not be able to access it unless she graduates college. In the meantime, those funds are in escrow.

F

Federal Housing Administration [FHA]: a government agency which provides home loans to eligible households [US].

Financial Management: although the subject is overly broad the crux surrounds controlling your spending through knowing what you can afford to invest, when you can do so, and staying well within budget.

Fixed Rate Mortgage: a mortgage arrangement wherein the interest rate does not change for the term of the mortgage.

Floating or Adjustable-Rate Mortgage: a mortgage arrangement wherein interest rate increases and decreases depending on prerogative of the lending institution or fluctuations in real estate market.

Foreclosure: process where a lender has the legal right to sell a mortgaged property when a debtor defaults on a related loan.

Front-end Ratio: in the residential sector, ratio of home dweller’s residual gross monthly income compared to gross monthly housing expenses. Or what you would have left over from your take home pay after addressing your monthly housing expenses.

G

General Contractor: in home improvement, an entity or individual who is often categorized as the Lead Contractor responsible for fulfilling a signed contract with a property owner or resident. Depending on the scope of the project, primary person who might use subcontractors, laborers, or both towards fulfilling home project requirements. These responsibilities include following project layout plans, obtaining necessary permits, guiding the progress of the project, and providing all supplies, materials, and equipment.

Graduated Payment Mortgage [GPM]: a mortgage rate that starts low but gradually increases over time.

Guaranteed Mortgage: usually a government mortgage loan toward home buying and home refinancing. The leading agency is the Federal Housing Administration, US [FHA].

Ghost Contractors: tradespersons or home service contractors who show up for work, accept your money, then suddenly disappear without starting or completing the home project.

H

Handyperson: ideally, an individual who is proficient in a variety of building trades and associative disciplines.

Home Equity Conversion Mortgage [HCEM]: a special loan provided by government or private lending institution against a portion of the face value of a borrower’s home equity. A loan which is typically made to qualified senior homeowners who might need funds for home improvements or other expenses.

Home Equity Line of Credit [HELOC]: an ongoing arrangement for a line of revolving credit against the equity of the home.

Home Equity Loan: a loan via an established lending institution which is equivalent to the equity of the home.

Home Improvement: in contemporary vernacular, anything done to the home or anywhere else on the property to maintain or improve its comforts, conveniences, and habitability.

Home Insurance: coverage against itemized losses and damage to the property; usually also includes the home and authorized additions to the property. It differs from mortgage insurance in that the latter provides coverage for the lender in the event the policyholder is unable to fulfill her or his mortgage debt.

Home Lessee: person who leases a free-standing detached private home, mansion, estate or a living unit in a duplex or multiplex.

Homeowner: person who owns a free-standing detached private home, mansion, estate or a living unit in a duplex or multiplex

Homeowners Association [HOA]. a social organization which originally and normally applies to legitimate homeowners working together to sustain, create, and encourage a more wholesome, safe, and free exclusive community.

Homeowner’s Insurance: a phrase used broadly in that there are different coverage values, meaning, you might have home insurance coverage for minor repairs, but it might not include damage from a freak storm, or gutter replacement. In this view, although Home Insurance offers coverage, it is important for you to know which type best suits you, and if you have it.

Home Project: anything related to maintaining and improving residential properties in, on, or around the home. Can sometimes include remodeling, refurbishing, asbestos abatement, and new construction.

Home Renter: person who rents a free-standing detached private home, mansion, estate or a living unit in a duplex or multiplex.

I

Imposter: in home maintenance and improvement, an individual who pretends to be a credentialed, skilled professional who is not. A charlatan.

Indemnification: in home improvement, it is a written guarantee whether included in the body of your contract or separated as an addendum, that you will not hold the contracting entity or contractor liable for loss or damages caused to or on your property under specified conditions. Among these conditions might be your promise not to hold the contracting entity or lead contractor responsible for loss or damage caused to or on your property by actions or nondisclosures of accidental injuries sustained because of workers’ own negligence or disregard for adequate safety procedures. Indemnity.

Impact-File Credit Report: a summary of someone’s credit history which is usually retained and accessed electronically.

Installment Contract: a contract with terms which allow for the performance of actions to be commenced on an installment basis over time. For example, a contractual arrangement is made for payment on a home project in progress by installment on each Friday of the month until the work is complete and final payment made. All said, an Installment Contract is a contract wherein certain things are expected to be performed over time on a piece-meal basis until everything the agreement requires is fulfilled.

Inspection Report: for our purposes, it is a report prepared by a local certified and licensed housing inspector. Emphasis: the housing inspector stops by, carefully examines the work, and takes notes along the way. Informally, the individual alerts you of the good news: Passed inspection. Now, the person must make out a formal report, specifying what was inspected, and why there were no infractions. Or why there were.

J

Joint Liability: when two or more parties are accountable for what does or does not occur.

Joint Tenancy: when two or more tenants own the same household, workspace, structure, or land for which there is mutual claim or interests.

Judicial Foreclosure: foreclosure document which must be filed with the court to obtain a judicial decree authorizing the sale of debtor property.

K

Know-how: in home improvement, the ability to successfully select and negotiate with contractors at minimal expense, maximum benefit.

Know the Contractor: a catch phrase for knowing enough about a contractor to be reassured you are not making a disastrous hiring decision. This means searching via every available means, including virtually, and learning from authoritative sources what you otherwise might not have known. Some virtual sources include professional and government databanks and consumer reporting agencies.

L

Landscape Contractor: an individual who engages in excavating, maintaining, improving, designing, or building outdoor spaces on the property.

Lead Contractor: in home improvement, an entity or individual under contract with a property owner or resident. The tradesperson might hire subcontractors and laborers for fulfilling home project requirements. This includes being responsible for obtaining necessary permits, guiding the progress of the project, and providing all layout plans, supplies, materials, and equipment. Also known as 'General Contractor.'

Lease: a legal contract allowing a person to exclusively occupy another property for a specific timeframe in return for payment.

Lease Option: an arrangement made wherein a household is given the option to lease or rent a home with the prospect of buying it after the term of the lease or rental agreement is fulfilled.

Leasehold Estate: rental agreement which usually grants the limited right to live in and on privately owned property. It is a legal right granted a household to occupy a rental space on a month-to-month basis contingent on payment at the beginning of each monthly cycle.

Lien: legal claim on your property that must be satisfied to avoid forfeiture of your right to own.

Lien Waiver: in home improvement, a legal document or contractual clause you might want to encourage a contractor to sign wherein he, she, or the contracting entity promises not to file a lawsuit against you in the event of a payment or job-related dispute.

Liquid Asset: cash or something easily converted into cash.

Lis Pendens: lawsuit pending.

Living: opposite of merely existing.

Loan Origination Fee: what lenders charge to process a loan application. It is usually nonrefundable if the loan is declined.

Loan Processing Fee: differs from Loan Origination Fee in that it is required after the loan application is accepted. However, it is usually also nonrefundable.

M

Manufactured Housing: prefabricated homes such as modular and mobile.

Master Lease: a lease arrangement wherein the owner of the lease has prerogative to sublease space to another party.

Maturity Date: regarding a home mortgage, refers to the date when full payment of the mortgage loan is due.

Mechanic’s Lien: legal claim on your property which can be made by disgruntled parties against you when they accuse you of owing them full payment for services, goods, or both. Ideally, such services and goods are considered by the claimants as having been used towards sustaining or increasing the value of your property. Among these are contractors, subcontractors, laborers, suppliers, and others with relevant vested interests. It can result in home foreclosure and personal bankruptcy if you are unable to satisfy presumed debts. For example, if you paid a general contractor in full, but he or she failed to pay the subcontractors, laborers, suppliers, and others he or she was obligated to pay, the debt is legally transferred to you. Any number or all persons who the contractor procured services and goods from can visit the local magistrate’s office and cause a Mechanic’s Lein to be placed on your property. It is a legal order which prevents you from selling your house or hiring new home improvement related services until those who filed the suit are fully paid, drop the lawsuit, or agree to settle.

Mediation: a means of resolving disputes through enlisting assistance from a qualified or legally authorized third party.

Mortgage: Legal claim on your property that must be satisfied consistent with any relative loan payment agreement you made with the lending institution.

Mortgage Insurance: a policy which differs from home insurance. Whereas home insurance is a policy taken out for primarily addressing wear and tear and other damage to the property, mortgage insurance is primarily coverage for the lender in the event the policyholder defaults on her or his mortgage loan.

Movers: technically, they are contractors who are in the moving business. Note: since movers are also contractors, the same protocol for thorough background checks applies.

Mortgagor: borrower who owes the entity from which a loan was approved.

Mortgage Acceleration Clause: a condition in some mortgage agreements for borrowers to pay off the mortgage sooner than its maturity date. This would apply when the lender has reason to believe the borrower will not be able to pay off the mortgage by the time final payment becomes due.

Mortgage Banker: typically, a person working in the loans department of a bank who arranges mortgage loans.

Mortgage Broker: a person who is usually licensed to collaborate with borrowers and connect them with the ideal lending institution best suited for their customized needs. Example: a borrower might need a cordial introduction to a lending institution which offers affordable loan conditions suitable to her or his specific mortgage needs. Ideally, brokers make it happen.

Mortgagee: lender or other entity who provides the loan.

Mortgage Forbearance: an action by lender to temporarily pause mortgage payments or resort to other supportive action which allows a borrower more time to meet payment obligations.

Municipal Housing Inspector: same as certified and licensed inspector, a local government official who has primary responsibility for ensuring local property safety and well-being ordinances are enforced area officials. Duties encompass ensuring that property in the city, town, county, and parish under the inspector’s jurisdiction meet safety standards and supports the overall well-being of those who to happen be on it or immediately proximal.

N

Negative Amortization: steady increase in the initial amount owed on property due to not meeting installment payments on schedule.

Negative Slope Driveway: a driveway which slopes down from the street to the house or garage. The slope is called negative because it promotes water flowing down to the house instead of away from the house.

No Cash-Out Refinance: in home mortgage loans, this means there is no cash payout when the borrower refinances a home mortgage. Opposite ‘Cash-Out Refinance.’

No-Documentation Loan: a loan that does not require documentation as prerequisite prior to being approved by the lender.

Non-Assumption Clause: normally a clause in a mortgage loan agreement which forbids another party or person from assuming loan privilege in place of the borrower originally entitled to its enjoyment.

Non-judicial Foreclosure: foreclosure which can be declared against the owner without the lending institution having to first seek a court order.

Notice of Cancellation: in home improvement, a legal document a property owner might be forced to issue to the Lead Contractor for legitimate project-related reasons. Caution: It is not recommended for a property owner to issue Notices of Cancellation without having in place a written court ordered injunction against being sued, or for neutralizing the threat of a Mechanic’s Lien placed on the property.

Notice of Default: a warning, with respect to home or mortgage, lease, or rent payments, which usually demands a response within 30 days, and warns of consequences if there is no remedial action within that period.

O

Offer to Lease: it is a legal document which outlines the terms and conditions of a lease. Also known as a Proposal to Lease.

Open Listing: is a contractual arrangement wherein the seller of the home establishes prerogative to solicit services of various real estate brokers who are usually paid on a commission basis to expedite selling the house. The broker who brings a buyer to the home first and closes the sale, is the broker who earns the commission. Ideally.

Origination: point at which a process or activity began. For example, a borrower goes to a broker to find and collaborate with a lending institution to approve a loan. If the loan is approved by the lender, the lending institution becomes the point or source at which the loan originated.

Owner’s Title Insurance: insurance which defends new owners from being held accountable for any liens or other debt incurred by any previous owners relative to that property.

Options [in a lease]: a lease arrangement wherein the lessee is given the option to renew the lease at the end of the leasing period or purchase the home.

Origination Fee: usually an initial fee charged by a lender or loan officer for complementary services entailed in granting and processing the loan.

Owner Financing: often this occurs when the owner of the property bypasses brokers to personally negotiate an agreement with the buyer to sell her or him the house. This is often conditioned on meeting scheduled payments [with interest] until the buyer pays off the full price of the property. Example: The house is offered for $156,000. The agreement obligates the buyer to pay $13,000 monthly spread over a period of 10 years, interest included. All risks entailed.

P

Pay-outs: separate costs and expenses which entail schedules or timeframes for paying the Lead Contractor, subcontractors, suppliers, service providers, others. These are separate from purchases.

Project Assistant or Representative: essential person who is specifically delegated by the private home decision maker as backup and stand-in for when resident is unavailable. This is especially applicable to when tradespersons or contractors are working on premises. The Project Assistant or Representative can be delegated to conduct general research, service validations or other intensive background checks, contribute to project planning, supervise, measure activity, quality control, and report on progress of the home project in your absence.

Pocketing the Money: within context, your possession, or savings of funds you might have otherwise wasted, lost due to fraud, or spent unwisely on home projects.

Power of Attorney: a legal document which empowers a second party to act in another’s favor.

Principle of Conformity: it is a concept that same or comparable properties or land usages are favored to closely resemble all others in the area. But in many states, the principle is violated when industrial plants are constructed proximal to residential neighborhoods, or when a multiplex is erected amid single-family homes. Local authorities are usually responsible for the deviation.

Principle of Regression: when upscale properties are devalued by nearby properties which are visually rated or legally assessed at lower value.

Private Home Decision Maker: person who owns, rents, or leases a private home.

Procuring Cause: a phrase which typically refers to a broker or other source who procures or finds a buyer. In this case, the home buyer.

Project Demands: refer to the best mix of human resources, supplies, materials, equipment, and services required for optimal project results.

Project Management: in the realm of home improvement, entails planning, directing, monitoring, adjusting, and coordinating all relative activities towards successful completion of the home project.

Project Manager: in the realm of home improvement, the project manager participates in all phases of home projects from planning to post-completion.

Project Protocol: an intact system of guidelines or ways for responding effectively to ensure that all research is done and all action taken progresses towards the benefit of family, property, and project.

Property Tax: foremost, it is a tax levied on real property directly or indirectly ordered by the government and assessed by property assessor to encourage revenue which helps finance, sustain, enhance, and support the public good.

Power of Sale: the right of the lender to impose the sale of a defaulted property without judicial proceedings.

Pre-foreclosure Sale: when a lender allows the homeowner to sell her or his property at or below face value to stave off the impact of foreclosure. Another name for this dilemma is Short Sale. In other words, it is when a property is on sale or sold for an amount which is lower than it is worth.

Proposal to Lease: same as Offer to Lease.

Protocol: in home improvement, an intact system of guidelines or patterns of approach we often develop independently and learn via sources of enlightenment which can be useful guarding against fraud. Example: You might see an exciting app which offers unusually affordable home improvement services. Everything you see and hear is incredible. But you might think ‘I wonder if they’re as good as they say they are?’ Then instead of connecting with them right away, let us presume you resort to a discovery technique. You search your device to see if there are any consumer complaints against them. This represents one of a few classic examples of what protocol in resident-contractor relations entails, particularly in matters of home improvement.

Punch List: in home improvement, a list of things required to be accomplished which a contractor might have to double check in the event something was missed or can need corrective attention. If the contractor finds it, he or she might make a mark alongside the missed item and continue going down the list to see what else might need to be marked. He or she then goes over the list again, then checks off each item which was addressed until all have been accomplished. Project complete.

Purchase-Money Mortgage: same as Owner Financing.

Q

Quality: In home maintenance and improvement, most acceptable results.

Quiet Enjoyment: ideally, it refers to the right to enjoy your premises without unannounced or illegal visits, intrusions, or interruptions.

 Quiet Title Suit: a legal action geared towards resolving [quieting] the unrest which can sometimes occur among disputes over property ownership. In other words, this type of lawsuit is intended to discover who is the rightful owner of a property, legally establish the record, and end the argument.

Quit Claim Deed: a legal document which transfers ownership rights from one person to another.

R

Real Estate Transfer Taxes: Assessed state and local taxation on real estate when ownership is transferred from one person to another.

Refinance: in homeownership, making a new loan arrangement to replace an older home loan. Usually this is done by the property owner to get a better mortgage deal which can include a longer payment period, lower interest rate, and cash-out benefits.

Rehabilitation Mortgage: an arrangement which finances home repair and refurbishment. The special mortgage arrangement can:

1.   enable a prospective homebuyer to possess a property and immediately begin making it more habitable.

2.    enable a homeowner to refinance the property and receive cash-out for addressing targeted home projects.

Refurbish: to restore something or a few things on the property to a clean, better, or more useful state. Example: stripping, leveling, sanding, and waterproofing an old wooden deck.

Remodel: in home improvement often entails significantly altering or redesigning of permanent areas of the property, in part or entirely to increase its level of comfort, convenience, usefulness, attractiveness, and value. Can also include adding more space, relocating or ‘moving’ windows and doors, rebuilding or relocating kitchens and rooms, and any number of new installations.

Restructured Loan: an arrangement wherein adjustments are made in a mortgage loan agreement which enables the debtor to meet obligations more conveniently. This could entail extending the term of the agreement resulting in paying a lower interest rate, mortgage forbearance, and other means which reduce debt impact.

Reverse Mortgage: an option wherein senior homeowners 62 years or older can use the equity of their homes as collateral for receiving funds or cash-out within or up to the maximum value of their home equity.

Right of First Offer: a contractual agreement wherein a party has the first prerogative to purchase a property, meaning, he or she has reserved the right to purchase it before anyone else. This right can be waived through signing the appropriate alternative agreement known as a Waiver of Right of First Refusal, or ROFR.

Right to Recission: applies to a borrower’s right to cancel a loan arrangement within 3 days. However, although the cancellation deadline is within 3 days, there are extraneous circumstances which can supersede that timeframe. An example of an ‘extraneous’ event is when the lending agency did not disclose critical sign-up risks which could have influenced the borrower’s decision to look elsewhere.

Risk Management: in lending, an evaluation process wherein a lending institution does whatever it can to avoid or minimize loss. The approach includes accessing as much financial data as possible from a borrower in the form of documents and about the borrower via virtual financial sources to validate the borrower’s ability to pay off the loan.

S

Second Mortgage [Cash-Out Mortgage Refinancing II]: a loan a borrower pursues to either get cash-out and replace the first mortgage, or use solely for the cash-out benefit while retaining the first mortgage.

Explanations:

* One borrower might be able to use the equity of the first mortgage for cash-out to finance the second mortgage, but the cash-out benefit is not the sole reason. Instead, there are a few explanations. Besides the cash-out benefit, the borrower wants to use it for paying off the balance of the first mortgage, then starting off with a clean slate with the second mortgage becoming the new mortgage obligation. By this means, he or she will still have only one mortgage, and enough left over to place into savings or to go on a wild spending spree.

* Another borrower might opt to take out the second mortgage for a singular reason: the cash-out benefit. In this alternate pursuit, the borrower prefers to retain the first mortgage. As a result, after successfully being approved for the second mortgage loan, he or she is now obligated to simultaneously pay two, separate mortgage fees [with interest]: one for the first mortgage, the other for the second mortgage.

Secured Loan: a loan made after a borrower has satisfied a lender’s requirement for having a legal claim on a borrower’s assets in an amount equal to the loan as security against borrower defaulting.

Service Validation: an old term first used via HGRBS, a dissolved nonprofit against home improvement fraud. Same as Discovery Technique in relation. Newer vernacular which pertains to private residents using a more aggressive approach to validating the competence and reliability of tradespersons in relation to contracting entities. Alternatively defined, it depicts a process for investigating the reputation, credibility, reliability, efficiency, and expeditiousness of contractors before making a hiring decision.

Settlement: in resident-contractor relations, this often refers to both parties reaching an amiable agreement after a significant dispute over financial and other matters of residential property engagement.

Servicing and Disclosure Statement: a written statement a lender is legally required to disclose to the borrower at the time the borrower applies for a loan or within three business days, stating that they will transfer loan payment obligation to another firm.

Single-family Attached: a condominium, apartment, or townhouse unit which is usually attached to the wall of another household regulated by the same property management firm. This type dwelling, irrespective of its wall being adjoined to the wall of another household is regarded as a dwelling with a legal occupancy capacity for one family.

Single-family Detached: a standalone abode with a legal occupancy capacity for one family.

Special Projects: within the vernacular of this personal home guide, any refurbishing, remodeling, re-wiring, landscaping, plumbing, carpentry, installation, or other activities which require special trade skills valued at hundreds, thousands, hundreds of thousands, or over a million dollars to successfully complete. Any home project which normally requires a written contract. Contract-related home project.

Specific Insurance Assurance [informal variant specific resident-contractor relations]: takes into consideration these factors …

* homeowner’s having adequate coverage specific to the type of projects ordered.

* contractors having adequate coverage for any damage to property, materials, goods, and other items used while delivering promised results.

* contractors having adequate personal coverage as well as coverage for any injuries or deaths among subcontractors, laborers, and others enlisted by the firm to accomplish targeted projects.

Specific Itemizing: refers to contractors providing to clients a complete list specific to costs and expense estimates which justify the dollar amount for the bid offered for the targeted project. Depending on the nature of the project, itemizations can include accessories, appliances, equipment, and other rentals, permit fees, supplies, materials, and more.

Specific Licensure or Certification: legal authorization to operate and to perform specialized projects. Includes all the credentials required by relevant government offices for the tradesperson or contractor to operate legally in that vicinity, municipality, county, parish, or state.

Starter Home: a first home purchased or financed through a mortgage loan. But could pertain to an old or new one two-bedroom house, or a home which requires substantial refurbishment or remodeling. Although this can also apply to a first home which is smaller in size and less expensive than a larger home, a lot of emphasis is on a home which has low equity and can be purchased or mortgaged at a much lower interest rate.

Stop Work Order: usually an order issued by the local housing inspector to cause a contracting entity or lead contractor to stop work on the project. This Stop Work Order can sometimes be issued to legally stop the work without canceling the project.

Subcontractor: a contractor who works with a primary or lead contractor. Usually specialized in supportive professional skills such as appliance or other exclusive installations, especially those installations which are physically attached to the property. Subcontractors can also include carpenters, electricians, HVAC-R technicians, landscapers, masons, plumbers, and other skilled professionals working under the auspices of the contracting entity or lead contractor.

Subordinate Loan: a secondary loan. Example: a borrower might have a mortgage loan arrangement he or she has been making monthly payments on for a few years. This borrower has also taken out a second mortgage which co-exists with the first. Among the two, the second mortgage is regarded as the subordinate loan, and the first mortgage is obviously the primary.

·         Urgent Note: although a loan is regarded secondary, the significance of meeting all monthly obligations on that loan is no less crucial than meeting monthly obligations for the primary mortgage. Subsequently, if the secondary loan goes into default, the property owner might want to file for mortgage forbearance and rectify the situation to stave off foreclosure.

Surety Bond: coverage a contractor should have to compensate for any damage or injuries a contractor might cause in the process of working on the property. There might be other penalties for the infraction.

Example: The law requires contractors to use bolts when building a porch, especially for weight-bearing connections which serve to keep it and the stairs intact and stable. This includes the ledgers which attach to the home and the crossbeams to support a specified weight load. When contractors ignore these laws and use screws instead bolts for weight-bearing connections, the porch could collapse and cause severe injury or death. Subsequently, one function of surety bond serves to prove contractors have coverage to compensate customers for damage or injury which can occur while on the job.

Swales: often unseemly outdoor surfaces in the backyard or elsewhere which are sometimes uneven, moist, and marshy mounds of dirt, soil, and vegetation of assorted sizes and shapes.

T

Team Project: Home improvement work which requires two or more to successfully tackle. Examples: roofing, siding, deck building, exterior plumbing, major painting, paving stone, additions, staircases, drywall, framing, driveways, major landscaping, rubbish removal, demolition, sign-hanging, gutters, fences, above ground exterior decorations, door installation, and more.

Tear Down Condition: in home real estate, pertains to a structure which requires major upgrading to be habitable. A loan can be taken out to claim ownership of the property through applying and being approved for a Rehabilitation Mortgage.

Third-Party Origination: a loan which originates with the lender after a broker or other intermediary submits the loan application and other essential borrower documentation to the lender for evaluation and approval. Sequentially, First, borrower; Second; broker; Third, lender.

Time Share: normally denotes shared ownership of a property or space for a specified period. Most recognizable example is a vacation home.

Title Insurance: an insurance policy which covers the legal expenses of a real estate representative or homeowner in a legal dispute over who is the rightful owner of the property.

Tradesperson or Contractor: preferably, within the residential context, anyone with years of training in one or more real estate home service areas. including improvements, repairs, remodeling, new construction, and all applicable property-related services used for the home setting. Home Service Contractor.

Travel Charges: What contractors might charge customers for making the trip to the property to negotiate getting the project. However, travel charges imply that those who charge them expect customers to shoulder expenses which might not inherently be legally required. In general, unless a prior agreement was made between customer and contractor for being billed by this tradesperson for travel expenses he or she incurred, it could be an unreasonable demand. In many states, if there is no current contract between tradesperson and consumer, there is no obligation for the consumer to pay. In this view, there is an appearance of attempted consumer fraud in some states when the demand for reimbursement occurs where there is no contract. CAUTION: Since there are still some states wherein it is legal to compensate contractors for travel expenses without a contract, home consumers might find it imperative to use their devices to search to discover whether this is legally protected or forbidden where they are located. This is suggested to be done before inviting contractors over for the initial interview.

Truth-in-Lending Act: a federal law which requires lenders to fully disclose to borrowers, in writing, the nature of the loan, its rates, and all terms relative to that loan. Also, can be referred to as Regulation Z.

Truth-in-Lending statement: a legally required document stipulated in the Real Estate Settlement Procedures Act RESPA, which recommends …

·         what the required annual percentage rate of the mortgage loan should be after all charges and fees are tabulated, in addition to full disclosure of all terms and details of the loan.

·         when the legally required disclosure document should be received by the borrower.

 Normally the timeframe for borrower to receive said document is immediately or within three business days of an application for a loan.

Two-Step Mortgage: a term which usually refers to one mortgage interest rate for the length of time required to complete building a home, standalone garage, or both, and a different mortgage interest rate after construction is completed.

U

Underinsured: Not having enough insurance.

Underwriting: a form of risk management wherein an underwriter completely evaluates the borrower to ascertain the borrower’s credit worthiness, and to recommend for loan approval if the borrower qualifies.

Unrecorded Deed: often entails a deed which is not registered within the locale where the property exists.

Unsecured Loan: a loan which is made without collateral. However, there are other requirements which often include proof of identification, location information, credit check, and at least one credit or debit account number related to the loan transaction.

Underwater Mortgage: a condition when what is owed on the mortgage is greater than the present market value of the property.

Universal Law of Home Project Success and Failure: ‘The leading reason for most successful contract-related home projects is that residents do thorough enough service validations on contractors; the leading reason for most unsuccessful contract-related home projects is that resident do not do thorough enough service validations on contractors.’

V

VA Guaranteed Loan: a posture taken by US Department of Veterans Affairs [VA] to cover for US veterans who might face default on a mortgage loan made with private lenders. In the event, the VA guarantees payment to the lenders on a portion of what is owed on the veteran’s balance.

·         Customarily VA is not known to provide funding for paying off the entire loan. But the VA guaranteed loan can help resourceful veterans who are homeowners postpone foreclosure and possibly get things back on the right track.

VA Loan: a loan arrangement which the US Department of Veterans Affairs [VA] arranges with private lenders to help finance down payments for eligible US veterans on a home. Nevertheless, even here veterans are obligated to make all payments consistent with the arrangement, including interest and local property taxes. But there are property tax exemptions for some. Ref...

·         Overview – VA – Housing Assistance – Home Loans ….12/27/2024.

·         ‘VA direct and VA-backed Veterans home loans can help Veterans, service members, and their survivors to buy, build, improve, or refinance a home.’ Ref.

Variable Interest Rate: same as Floating or Adjustable.

Validate: Within the context of the new, more assertive approach to hiring contractors, this involves private home residents using an aggressive discovery technique for validating the reputation, credibility, reliability, efficiency, and expediency of contractors. Also known as 'service validation' or ‘validating'.

Valuation: an estimate of an appraiser’s assessment of what a property is worth.

Variant or Variance: in real estate, a variant is a situation or condition wherein something which is outside regulated zoning restrictions is legally allowed. An example of an activity for which the local magistrate might grant a variance can be legal clearance for excessive construction-related noise after a certain time of day wherein it is normally restricted. Another can entail a local variance for building a two-family structure in a zone which is traditionally for one-familiar structures.

Victory: when a private home decision maker gets a lot accomplished in, on, or around the property at minimal expense.

Volatile [informal]: for our purposes, a private home decision maker’s wising up and making unscrupulous people answer for their indiscretions; a scathing report against rip offs, waste, unreasonable prices, and scandal.

Voluntary Lien: a property owner’s voluntary consent for a lender to place a lien on her or his property as security against defaulting on a loan. A common legal agreement some borrowers make as a condition for taking out a loan [but not necessarily mortgage related, although it can be].

W

Waive: giving up the right, privilege, or option for taking or not taking an action.

Waiver: usually a legal document with conditions for bypassing an action or activity which was previously withheld or upheld.

Walk-Through: in real estate, averagely entails moving along the premises and assessing the scenario. There could be several reasons. A few of these can entail:

·         weighing in on the look, feel, and functionality of the property for present and future needs.

·         ascertaining what needs to be done to make this property more livable.

·         ensuring everything which needed to be done has been fulfilled or corrected.

·         And other property related diligence.

Warranty: in real estate, there are multiple types which offer basic assurances in relation to the distinctive nature of a sales agreement. Two examples:

·         a warranty deed a property seller signs over to the new owner which contains reassuring conditions to the effect that the property seller is the legitimate owner who is transferring or has transferred exclusive ownership of related property to the buyer.

·         a service warranty which promises if for any reason within a specified period anything relative to the service needed corrective attention, that it will be remedied in a manner and within the timeframe stipulated in that warranty.

Weep Holes: uniformly created vertical spaces which might usually appear as ‘missed spots’ in brick work, meaning, there is no concrete filling where they appear. These can be found at various points of brick homes. But the engineering behind what can seem to be ‘missed spots’ is to mitigate or lessen the corrosive effects of excess moisture between the inner side of the bricks and backup walls. In other words, this scattered spacing allows airflow which helps keep the inner space drier. This supports the interior wall integrity of the home.

Wild Deed: a deed which has questionable legitimacy, meaning it can be absent from public records, contain false and misleading data, or in some other way not yet confirmed as legally valid. In turn, this can lead to being unable to identify the legal owner of a property.

Workout Plan: an agreement between the borrower and lender which includes recommended steps a borrower can take as a means for averting delinquency which can result in foreclosure.

Wraparound Mortgage Loan: in matters of domestic real estate, this kind of mortgage loan originates with the property owner who finances or mortgages out her or his home to a private buyer. Another form of Owner Financing.

X

Xeriscape: a specially designed garden area or landscape of plants which require very little watering.

Xerophytic Garden: a garden which is usually adorned with plants which require no urgency for watering.

Y

Yearly Appreciation: in real property, refers to an annual increase in property value. This can occur in several ways, but here are two:

·         through a series of home improvements on the property.

·         new construction of a solar panel factory nearby.

Yearly Depreciation: in home property, refers to an annual decrease in its value. This can occur over time when the home is not well maintained, or the neighborhood devolves into a less desirable place for prospective new residents to live.

Yearly Lease: a lease which is subject to renewal each year.

Z

Zero Energy Building: a structure which is largely or completely powered by solar, water, or both energy sources. ‘Zero’ denotes little to no energy generated by use of oil, gas, or both.

Zoning: mapping and making laws which clearly specify the parameters for where, when, and how land should be used.

Zoning Map: a map which distinctly identifies each zone within the jurisdiction of interest. Often used by civilian, business, and government inquirers for a range of reasons, from locating a preferred neighborhood to an ideal location for developing a shopping center, township, community center, multiplex, and more.

Zoning Ordinance: result of mapping and making laws which outline the parameters for where, when, and how land should be used. However, each ordinance often pertains to conditions which differ one from another in relation to land use. Two examples:

·         standards for new construction, remodeling, and other work which adds to or alters a permanent structure or in some way alters the original configuration of the land.

·         standards against construction or other undue noise after a certain time of day.