Plain-language glossary
The vocabulary used elsewhere on the site, defined in the sense in which it is used here.
These are working definitions written for the general reader. Legal and lending terms carry precise meanings that vary by state and by contract, and a definition here is an explanation of the idea rather than a statement of what any particular document says.
- Amortisation
- The schedule by which a loan is repaid, splitting each payment between interest on the outstanding balance and repayment of that balance, so that early payments are mostly interest and later ones mostly principal.
- Appraisal
- A lender's independent estimate of what a property is worth as security for a loan, made by comparison with recorded sales of similar properties.
- Comparable
- A recent sale of a property similar enough to the one being valued that it can serve as evidence, after adjusting for the ways the two differ.
- Contingency
- A condition written into a contract that lets a party withdraw or renegotiate if a stated thing is not satisfied within a stated period.
- Covenant
- A private restriction recorded against land, limiting what may be built or done on it, separate from and additional to public zoning.
- Easement
- A recorded right for someone other than the owner to use part of the land for a defined purpose, which survives every subsequent sale.
- Escrow
- An arrangement in which money is held by a third party and released when conditions are met; also the account in which a lender collects property taxes and insurance alongside the loan payment.
- Lien
- A recorded claim against a property securing a debt, which must generally be paid and released before clear ownership can be transferred.
- Non-conforming
- A lot or building that lawfully exists but would not be permitted under the rules now in force, usually because it predates them.
- Point
- A fee equal to one percent of the loan, paid at closing in exchange for a lower interest rate over the life of the loan.
- Setback
- The minimum distance a structure must sit from a boundary or a road, fixed by local rules rather than by the deed.
- Survey
- A measured determination of where a parcel's boundaries lie on the ground, and where structures and easements sit relative to them.
- Title
- The accumulated history of ownership of a piece of land, together with every recorded right and burden attached to it along the way.
- Turnover
- The share of a town's existing houses that change hands in a period, typically a small fraction of the total stock.
- Underwriting
- The lender's final examination of a borrower's finances and the property, carried out before it commits the money.
Terms deliberately not defined here
Some words in common use describe conditions rather than mechanisms, and defining them would give them more precision than they have. A market described as strong, hot, soft or balanced is being characterised, not measured. Where this site needs to make such a claim it says what it is measuring instead.