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Real Estate Terms

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RThere are 53 entries in the glossary.Pages: 1 RadonA radioactive gas found in some homes that in sufficient concentrations can cause health problems. RafterA board that supports the roof of a house. Rate CapsLenders offer caps with their adjustable rate mortgages (ARMs) so you can have more control over your monthly mortgage payment. Usually, there are two types of rate caps:

A per-adjustment cap, which specifies the most your interest rate can rise from one adjustment period to the next.

A lifetime adjustment cap, which specifies how much your interest rate can rise over the life of your loan.

Ask your lender about both caps when evaluating any ARM product. Rate LockA commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time. (see also "Lock-in") Rate-Improvement MortgageA fixed-rate mortgage that includes a provision that gives the borrower a one-time option to reduce the interest rate (without refinancing) during the early years of the mortgage term. Ratified Sales ContractA ratified sales contract means both the buyer and the seller have signed off on the final offer. It also acts as a starting point for the loan application interview. The ratified sales contract specifies the amount of your down payment, the price you will pay for the house, the type of mortgage financing you will seek, your proposed closing and occupancy dates, and other contingencies. You will give all this information to your loan officer when you meet to discuss your financing options. Raw landLand with no improvements. Real estateLand including the buildings or other improvements upon the land. Also includes the airspace above the parcel and the contents below the surface. Real Estate AgentA person licensed to negotiate and transact the sale of real estate on behalf of the property owner. Real Estate AttorneyMany homeowners hire a real estate attorney to represent them during the loan application process. If you do so, your attorney will review the sales contract and represent you at closing. Real Estate BrokerA middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner. Real Estate Investment Trust (REIT)Passive investment vehicle whose distributions are taxed only to the investors who receive them. Real estate sales professionalA person licensed to negotiate and transact the sale of real estate on behalf of the property owner. Real Estate Settlement Procedures ActA consumer protection law that requires lenders to give borrowers advance notice of closing costs. Real PropertyLand and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof. RealtorA real estate broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors. RecastingChanging terms of a loan while retaining the same loan. RecissionThe cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent. Borrowers usually have the option to cancel a refinance transaction within three business days after it has closed. RecorderThe public official who keeps records of transactions that affect real property in the area. Sometimes known as a "Registrar of Deeds" or "County Clerk." RecordingThe noting in the registrar's office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record. Recurring closing costsSee Closing Costs. ReferencesNames and phone numbers of previous customers of a contractor. It's a good idea to call a contractor's references before hiring him, to make sure he has done good work in the past. Refinance TransactionThe process of paying off one loan with the proceeds from a new loan using the same property as security. Refinancing RehabShort for "rehabilitation." To rebuild an existing house or building, to make the space more livable or usable and more valuable. Rehabilitation Escrow AccountA contingency reserve will be set up that contains funds borrowed to finance your home improvements. These will be placed into an escrow account upon the closing of your mortgage. Payments to the contractor will be periodically made from this fund as construction occurs. You will be paid interest on the funds that are in the escrow account that have not been paid to the contractor. Rehabilitation MortgageA mortgage created to cover the costs of repairing, improving, and sometimes acquiring an existing property. Remaining BalanceThe amount of principal that has not yet been repaid. (see also "Principal Balance") Remaining TermThe original amortization term minus the number of payments that have been applied. RemodelingTo rebuild and improve a house or building, often changing its "model" or layout or adding rooms. Renegotiable Rate Mortgages (RRM)A mortgage where the interest rate is renegotiated at intervals, usually every three to five years. RentConsideration paid for the use of property. Rent Loss InsuranceInsurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent. Rent with Option to BuyThere are two different Rent With Option to Buy options:(1) Lease-Purchase Mortgage Loan: An alternative financing option that allows low- and moderate-income home buyers to lease a home from a nonprofit organization with an option to buy. Each month's rent payment consists of principal, interest, taxes and insurance (PITI) payments on the first mortgage plus an extra amount that is earmarked for deposit to a savings account in which money for a downpayment will accumulate.(2) Lease-Purchase Option: Nonprofit organizations may use the lease-purchase option to purchase a home that they then rent to a consumer, or "leaseholder." The leaseholder has the option to buy the home after a designated period of time (usually three or five years). Part of each rent payment is put aside toward savings for the purpose of accumulating the down payment and closing costs. Rentable areaThe actual square foot area for which the tenant will pay rent. Compare with gross area and usable area. Repayment PlanAn arrangement made to repay delinquent installments or advances. Lenders' formal repayment plans are called "relief provisions." Replacement Reserve FundA fund set aside for replacement of common property in a condominium, PUD, or cooperative project -- particularly that which has a short life expectancy, such as carpeting, furniture, etc. RepossessTo take back a property, such as a car, when the borrower or owner does not make payments due on the property. Done by a lender or seller. Restrictive covenantsPrivate restrictions limiting the use of real property. are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and binding only betwee n the original seller and buyer. The determination whether a covenant runs with the land or is personal is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating. Reverse Annuity MortgageLoan to a homeowner which is paid as an annuity with interest increasing on the accumulated balance. The loan is paid back in full upon the sale or refinancing of the property. Reverse MortgageAlso called a Home Equity Conversion Mortgage (HECM). A special type of mortgage that enables older home owners to convert the equity they have in their homes into cash, using a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property. Revolving LiabilityA credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due. RHS LoansThe Rural Housing Service (RHS), a branch of the U.S. Department of Agriculture, offers low-interest-rate homeownership loans with no down payment requirements to low- and moderate-income persons who live in rural areas or small towns. Check with your local RHS office or a local lender for eligibility requirements. For the location of RHS State Offices and details on RHS loans, see the RHS home page. Right of First RefusalA provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others. Right of Ingress or EgressThe right to enter or leave designated premises. Right of SurvivorshipIn joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant. Right-of-wayThe right to cross over or under another person's property for ingress, egress, utility lines, or sewers. Riparian rightsRights of an owner of property abutting water to use the water and have uninterrupted flow. Risk Assessment (PHA)Assessment The identification and analysis of relevant external and internal risks to achievement of established objectives, forming a basis for determining how risks should be managed. (JFMIP Framework) HUDCAPS Core Financial System Standard Accounting Interface, dated 9/30/97 Rollover mortgageA loan having a call date earlier than the full amortization period. Run with the landWhen easements or restrictions do not expire when ownership in transferred. Rural Development (RD)Formerly the Farmers Home Administration, RD is part of the U. S. Department of Agriculture. It administers grant and loan programs to promote and support housing and essential community facilities development in r ural communities. Rural Housing ServiceAn agency within the Department of Agriculture, which operates principally under the Consolidated Farm and Rural Development Act of 1921 and Title V of the Housing Act of 1949. This agency provides financing to farmers and other qualified borrowers buying property in rural areas who are unable to obtain loans elsewhere. Funds are borrowed from the U.S. Treasury. 

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