Real Estate Settlement Procedures Act (RESPA)

A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

Realtor

A real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.

Radon

A radioactive gas found in some homes that in sufficient concentrations can cause health problems.

Rate Caps

Lenders 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,
-- and 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-Improvement Mortgage

A 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.

Rate Lock

A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time.

Ratified Sales Contract

A 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.

Real Estate Agent

A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.

Real Estate Attrorney

Many 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.

There are many questions you can ask a personal attorney before deciding whether to have the attorney represent you at closing. They can include:

-- What is the attorney's fee for representing you at closing?
-- What is the attorney's experience with real estate transactions?
-- Are there fees for reading documents relating to the closing?
-- Are there fees for giving advice?

Remember that your personal attorney's fee is not part of your closing costs. You must pay for this expense separately.

Real Property

Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.

Recorder

The public official who keeps records of transactions that affect real property in the area. Sometimes known as a "Registrar of Deeds" or "County Clerk."

Recission

The 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.

Recording

The 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.

Refinance Transaction

The process of paying off one loan with the proceeds from a new loan using the same property as security.

Rehabilitation Escrow Account

A 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 Mortgage

A mortgage created to cover the costs of repairing, improving, and sometimes acquiring an existing property.

Remaining Balance

The amount of principal that has not yet been repaid.

Remaining Term

The original amortization term minus the number of payments that have been applied.

Click Here to continue to Next Page