Glossary 1

Qualifying Ratios: Calculations that are

but are generally not involved in the

lending process.

used in determining the loan amount

that a borrower qualifies for, typically

Real Estate Settlement Procedures

a comparison of the borrower's total

Act (RESPA): A federal law that requires

monthly income to monthly debt pay-

lenders to provide home mortgage bor-

ments and other recurring monthly

rowers with information about transac-

obligations.

tion-related costs prior to settlement, as

Quality Control: A system of safeguards

well as information during the life of the

loan regarding servicing and escrow ac-

to ensure that loans are originated, un-

counts. RESPA also prohibits kickbacks

derwritten and serviced according to the

and unearned fees in the mortgage loan

lender's standards and, if applicable, the

business.

standards of the investor, governmental

agency, or mortgage insurer.

Real Property: Land and anything

permanently affixed thereto -- including

R

buildings, fences, trees, and minerals.

Recorder: The public official who keeps

Radon: A toxic gas found in the soil

records of transactions that affect real

beneath a house that can contribute to

property in the area. Sometimes known

cancer and other illnesses.

as a "Registrar of Deeds" or "County

Clerk."

Rate Cap: The limit on the amount an

interest rate on an adjustable-rate mort-

Recording: The filing of a lien or other

gage (ARM) can increase or decrease

legal documents in the appropriate pub-

during an adjustment period.

lic record.

Rate Lock: An agreement in which an

Refinance: Getting a new mortgage with

interest rate is "locked in" or guaranteed

all or some portion of the proceeds used

for a specified period of time prior to

to pay off the prior mortgage.

closing. See also "Lock-in Rate."

Rehabilitation Mortgage: A mortgage

Ratified Sales Contract: A contract

loan made to cover the costs of repair-

that shows both you and the seller of

ing, improving, and sometimes acquiring

the house have agreed to your offer. This

an existing property.

offer may include sales contingencies,

such as obtaining a mortgage of a cer-

Remaining Term: The original number

tain type and rate, getting an acceptable

of payments due on the loan minus the

inspection, making repairs, closing by a

number of payments that have been

certain date, etc.

made.

Real Estate Professional: An individual

Repayment Plan: An arrangement by

who provides services in buying and

which a borrower agrees to make ad-

selling homes. The real estate profes-

ditional payments to pay down past due

sional is paid a percentage of the home

amounts while still making regularly

sale price by the seller. Unless you've

scheduled payments.

specifically contracted with a buyer's

agent, the real estate professional rep-

Replacement Cost: The cost to replace

resents the interest of the seller. Real

damaged personal property without a

estate professionals may be able to refer

deduction for depreciation.

you to local lenders or mortgage brokers,