Real Estate and Legal Terminology

A collection of vocabulary flashcards covering essential real estate, mortgage, and legal terminology found in the lecture notes.

Arrears

A situation where a required payment has not been made by its due date and is now overdue, often referring to mortgage payments, property taxes, or debts attached to a property.

Appraisal

A professional estimate of the market value of a property conducted by a qualified appraiser to help lenders determine security value, such as before approving a $700,000$ mortgage.

Blanket Mortgage

A mortgage that uses two or more properties as security for one loan, allowing borrowers like developers to finance multiple properties under a single agreement.

Closed Mortgage

A mortgage agreement that restricts the borrower from paying off the loan early, increasing payments, or making major changes without lender approval or a penalty.

Collateral Mortgage

A mortgage where the property is used as security and the lender registers a charge, potentially allowing the borrower to access additional funds without refinancing.

Default

The failure of a borrower or party to meet legal obligations of a contract, specifically failing to make required loan payments, which may allow the lender to take legal action.

Easement

A legal right allowing one person or organization to use another person’s land for a specific purpose (e.g., utility lines) despite not owning the land.

Encumbrance

Any legal claim, restriction, or interest attached to a property that may affect its ownership, use, or transfer, such as mortgages, liens, and easements.

Mortgage Charge

A legal document registered on a property providing a lender with a security interest in theater property until the debt is fully repaid.

Mortgage

A legal agreement where a borrower receives money from a lender to purchase property and agrees the property serves as security for repayment.

Escrow

A legal arrangement where money, documents, or property are held by a neutral third party until specific conditions in an agreement are satisfied.

Extension Agreement

A written agreement that extends the time period or deadline of an existing contract or mortgage, such as a home purchase closing date.

Fee Simple

The most complete form of land ownership, granting the owner full legal rights to use, sell, lease, or transfer property, subject only to government restrictions.

Guarantor

A person who legally promises to pay or fulfill an obligation if the primary borrower fails to do so.

Irrevocable

A legal term signifying that something cannot be cancelled, changed, or withdrawn without specific legal authority or permission.

Joint Tenancy

A form of ownership where two or more people own property equally; upon one owner's death, their interest automatically passes to the survivors.

Lien

A legal claim placed on property by a creditor to secure payment of a debt, which may prevent the sale of the property until the debt is resolved.

Maturity Date

The date when the term of a mortgage or loan ends, requiring the borrower to pay the balance, renew, or renegotiate.

Matrimonial Home

A family residence occupied by spouses that receives special legal protection under family law, particularly during separation or divorce.

Mortgage Commitment

A written agreement from a lender confirming they are prepared to provide a mortgage under specified terms and conditions.

Mortgagor

The borrower who receives money from a lender and provides the property as security for the debt (Memory trick: person who owes money).

Mortgagee

The lender who provides the mortgage funds and receives a security interest in the property (Memory trick: entity that gives money).

Postponement Clause

A clause allowing one mortgage or claim against a property to give up its priority position and move behind another claim.

Prime Rate

The base interest rate set by financial institutions for lending money, often used to calculate variable-rate loans.

Promissory Note

A written legal promise by one party to repay a specific amount of money to another party by a certain date or under agreed terms.

Right of Survivorship

A legal right where a joint owner’s interest automatically transfers to the surviving owner(s) upon death instead of becoming part of their estate.

Second Mortgage

A mortgage registered against a property after an existing first mortgage, holding a lower priority claim in the event of default.

Status Certificate

A document issued by a condominium corporation providing financial info, fees, and legal status of a specific unit and the corporation.

Title Insurance

Insurance protecting owners and lenders against losses from ownership defects, such as fraud, undisclosed liens, or public record errors.

Title Search

A review of public land records to confirm legal ownership and identify any registered claims, restrictions, or interests.

Variable Interest Mortgage

A mortgage where the interest rate fluctuates based on changes to the lender’s variable rate, usually tied to the prime rate.

Vendor Take Back

A financing arrangement where the seller provides a loan to the buyer to help purchase the property instead of traditional lender financing.

Waiver

A voluntary agreement where a person gives up a known legal right or chooses not to enforce a specific requirement.

Without Prejudice

A legal phrase indicating that a communication is made without affecting legal rights or admitting liability, commonly used in settlement talks.

Zoning

Government regulations controlling land use and building types, such as designating areas for residential, commercial, or industrial use.