Glossary of Common Real Estate Terms
This glossary was assembled by our closing attorney, Gregory D. Callihan, to help buyers, sellers, and lenders understand key mortgage and title terms.
Abstract of Title
A summary of the public records relating to the title of a particular piece of land.
Acceleration Clause
A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common is default.
Adjustable‑Rate Mortgage (ARM)
An ARM is a mortgage loan with an interest rate that adjusts periodically based on market indices.
Amortization
The process of gradually paying off a loan through scheduled periodic payments that include principal and interest.
Appraisal
An estimate of property value made by a qualified professional.
Closing Disclosure
A form that outlines the final terms and costs of a mortgage loan, provided before closing.
Contingency
A condition that must be met before a real estate contract becomes binding.
Deed of Trust
A document used in some states instead of a mortgage; involves a borrower, lender, and trustee.
Earnest Money
A deposit made to a seller showing the buyer’s good faith in a transaction.
Escrow
An arrangement in which funds or documents are held by a neutral third party during a real estate transaction until the closing conditions are met.
Escrow Account
An account used by a mortgage lender to pay taxes and insurance on behalf of the borrower.
FHA Loan
A loan insured by the Federal Housing Administration, often for lower-income or first-time buyers.
Lien
A legal claim against a property as security for a debt.
Loan Estimate
A form that provides important details about a mortgage loan the applicant has requested.
Mortgage Insurance
Insurance that protects the lender in case the borrower defaults on the loan.
Pre-Approval
A lender’s written commitment to fund a mortgage up to a specific amount, based on an evaluation.
Quitclaim Deed
A deed that transfers ownership rights without guarantees about the title’s status.
Real Estate Agent
A licensed professional who represents buyers or sellers in real estate transactions.
Title Insurance
An insurance policy that protects homeowners and lenders from financial loss due to defects in the property title.