Real Estate Finance

Promissory Note

Borrower's written promise to repay a loan.

Deed of Trust

Security instrument commonly used in Nevada.

Trustor

Borrower under a deed of trust.

Beneficiary

Lender under a deed of trust.

Trustee

Neutral third party holding legal title for security purposes.

Conventional Loan

Loan not insured or guaranteed by the federal government.

FHA Loan

Loan insured by the Federal Housing Administration.

VA Loan

Loan guaranteed by the Department of Veterans Affairs for eligible borrowers.

USDA Loan

Loan guaranteed by the U.S. Department of Agriculture for eligible rural properties and borrowers.

Loan-to-Value (LTV)

Loan amount divided by property value.

Equity

Property value minus debt owed.

Down Payment

Purchase price minus loan amount.

Amortization

Gradual repayment of a loan over time.

Principal

Amount borrowed.

Interest

Cost of borrowing money.

Discount Point

One percent of the loan amount.

Default

Failure to meet loan obligations.

Foreclosure

Legal process following borrower default.

Loan Term

Length of the loan.

Security Instrument

Document that secures the loan with the property.

Loan Balance

Remaining unpaid principal.

Mortgage

A security instrument used in many states.

Fixed-Rate Loan

Loan with an interest rate that does not change over the term.

Adjustable-Rate Mortgage (ARM)

Loan with an interest rate that may change according to its terms.

Debt

Money owed by a borrower.