Real Estate Terms and Concepts

A set of flashcards covering important vocabulary related to real estate terms and concepts.

Prepayment Penalty

A penalty for early payment of the loan.

Satisfaction of Judgment

Cancels the note when the debt is paid.

Escalation Clause

Gives the lender the right to increase the rate of interest during the length of the mortgage.

Covenants

Promises (usually within a mortgage or deed).

Alienation Clause

Makes the mortgage non-assumable; also known as 'due on sale clause.'

Subordination Clause

Lender gives permission for a subsequent loan to assume first mortgage rights.

Trust Deed

Similar to a mortgage, but it adds a 3rd party, the trustee, to oversee the trust agreement.

Trustor

The borrower in a trust deed.

Beneficiary

The lender in a trust deed.

Trustee

An impartial party appointed to oversee the trust agreement.

Deed of Reconveyance

In a trust deed, transfers title back to original owner when the trust deed is paid off.

Contract for Deed

Owner financing in which the owner retains title until the debt is paid.

Purchase Money Mortgage

Owner financing in which the buyer receives legal title at time of sale and the property becomes collateral for the loan.

Foreclosure

The right of the lender to sell the collateral property to redeem the debt.

Strict Foreclosure

If the property sells for more than the debt, the lender profits.

Foreclosure by Sale

The lender is required to refund to the borrower any profit from the sale of the foreclosed property.

Deficiency Judgment

A judgment against the borrower by the lender when the lender does not get the full amount of the debt from the foreclosure.