Promise by a lender to provide a permanent loan to pay off a construction loan.

A government employee who determines a property value for tax purposes.

Trade of like-kind property that does not trigger recognition of taxable gain at the time of the exchange.

A commonly used term in real estate is PITI. This abbreviation stands for principal, interest, taxes and insurance. The tax and insurance components of a mortgage payment are generally held by the lender in an escrow account. The lender pays any property tax and homeowner's insurance bills as they are due, ensuring they are paid on time. A home buyer's monthly mortgage payment generally covers expenses through the escrow account. If you don't have your homeowner's insurance and property taxes paid out of a lender escrow account, your local government and your property insurance company will send payment notices directly to you. It is your responsibility to make sure you pay these bills on time. If you're planning to purchase a condominium or cooperative, talk to your lender about how they view condo and co-op fees. Most likely, they are considered housing costs and not a part of PITI. However, this can vary from lender to lender.

A type of joint tenancy of property that provides right of survivorship and is available only to a husband and wife. Contrast with tenancy in common.

A lease provision that obligates the owner to incur a prespecified dollar. Allowance amount to prepare the space for the tenant's occupancy.

The length of time in which a loan is to be repaid. A 30-year mortgage loan has a 30 year term.

Homes in many parts of the country must be inspected for termites before they can be sold. You should receive a certificate from a termite inspection firm stating that the property is free of both visible termite infestation and termite damage. The cost of the termite inspection is usually paid by the seller, and the seller's real estate sales professional orders the inspection. You need to make sure that the original certificate is delivered to your lender at least three days before closing. This allows the lender to review the certificate and address any potential problems.

A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market. (see also "Mortgage Broker")

Thrifts are depository institutions that primarily serve consumers and include both savings banks and savings and loan (S&L) institutions. These institutions originate and service mortgage loans. A thrift may choose to hold a loan in its own portfolio or sell the loan to an investor.

An economic principle recognizing that a dollar today has greater value than a dollar in the future because of its earning power.

A company that specializes in examining and insuring titles to real estate.

A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

The nature of the surface of land, such as level, rolling, and so forth.

The total amount of credit card, car loan, and other debt payments a person must pay each month. Used to figure out debt-to-income ratios.

A townhouse is similar to a condominium in that it's a type of joint real estate where each housing unit is individually owned. However, it has two or more stories, rather than the typical one floor found in a condominium. Townhouses are available in many shapes and sizes, and most may have yards or common spaces that can be used by the owners.

Equity that results from a property purchaser giving his or her existing property (or an asset other than real estate) as trade as all or part of the down payment for the property that is being purchased.

Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device. In cases in which an inter vivos revocable trust is the borrower, lenders also consider any transfer of a beneficial interest in the trust to be a transfer of ownership.

An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the results of auctions that the U.S. Treasury holds for its Treasury bills and securities or is derived from the U.S. Treasury's daily yield curve, which is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. (see also Adjustable-Rate Mortgage)

See Deed of Trust.

A federal law that requires lenders to provide complete and correct information, in writing, about how much a borrower owes when payments are due and how much they are, and what interest rates and other charges are.

A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed.