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Glossary of Real Estate Terms

Net Proceeds

Definition Net proceeds refer to the amount of money a seller receives after deducting all expenses related to the sale of a property. These expenses may include agent commissions, closing costs, outstanding mortgage balances, property taxe...

Non-Conforming Loan

Definition A non-conforming loan is a mortgage that does not meet the guidelines set by Fannie Mae and Freddie Mac, typically due to loan amount, borrower credit profile, or unique property type. These loans are often provided by private l...

Novation

Definition Novation is a legal process in which an existing contract is replaced by a new one, transferring rights and obligations from one party to another. In real estate, novation is often used when a buyer assumes a seller’s mortgage o...

Owner-Occupied Property

Definition An owner-occupied property is a residential or commercial property where the owner lives or operates a business, rather than renting it out to tenants. In real estate financing, owner-occupied properties often qualify for better...

Owner’s Title Insurance

Definition Owner’s title insurance is a one-time insurance policy that protects homebuyers from financial losses related to ownership disputes, liens, or title defects that may arise after purchasing a property. This policy ensures that...

Points (Discount Points)

Definition Points (also called discount points) are optional upfront fees paid to a mortgage lender at closing to reduce the loan’s interest rate. Each point typically costs 1% of the loan amount and lowers the interest rate, resulting i...

Prepayment Privilege

Definition A prepayment privilege is a borrower’s right to pay off their mortgage loan early or make additional payments toward the principal without incurring penalties. This feature allows homeowners to reduce interest costs and loan d...

Principal & Interest (P&I)

Definition Principal & Interest (P&I) are the two primary components of a mortgage payment. The principal is the original loan amount borrowed, while the interest is the cost of borrowing the money, paid to the lender over time...

Probate Sale

Definition A probate sale is a real estate transaction involving a property owned by a deceased person whose estate is being settled through the probate court process. These sales occur when the deceased person did not have a will or did n...

Property Appraisal

Definition: A professional assessment of a property’s value conducted by a licensed appraiser, typically required for mortgage approval. Explanation: An appraisal determines the fair market value of a home based on recent comparable sales,...

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