Real Estate Terms and Definitions

Flood insurance Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan. Down payment The portion of a home's purchase price that is paid in cash and is not part of the mortgage loan. Delinquency Failure of a borrower to make timely mortgage payments under a loan agreement. Cap A limit, such as that placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease. Housing counseling agency Provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and homebuying. Freddie Mac Federal Home Loan Mortgage Corporation (FHLM); a federally-chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders With funds for new homebuyers. Default The inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms. Homeowner's insurance An insurance policy that .combines protection against damage to a dwelling and Is contents with protection against claims of negligence or inappropriate action that result in someone's injury or property damage. Balloon Mortgage A mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower. HUD The U.S. Department of Housing and Urban Development; established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs, improving and developing American communities, and enforcing fair housing laws.

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	Did You Know?
	Property easement is a right to use some part of a property for a specific purpose An express easement may be contained in the deed to the property or in another document. Some examples include: A utility company can run power lines on a property,Adjacent property owners may enter into an agreement to share a common driveway that extends over both properties. An implied easement or prescriptive easement may arise when a use of property continues for a certain period of time.