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title: "Real Estate Glossary | Ondo RE"
canonical: https://www.ondorealestate.com/glossary/
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# Real estate glossary

108 terms from buying, selling, lending, investing, leasing and closing — each one explained in plain English, with what it actually changes for you.

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All termsMortgage & lendingBuying a homeSelling a homeInvestingRenting & managementClosing, title & notary

108 terms

[#](#letter-other)[A](#letter-A)[C](#letter-C)[D](#letter-D)[E](#letter-E)[F](#letter-F)[G](#letter-G)[H](#letter-H)[I](#letter-I)[J](#letter-J)[L](#letter-L)[M](#letter-M)[N](#letter-N)[O](#letter-O)[P](#letter-P)[R](#letter-R)[S](#letter-S)[T](#letter-T)[U](#letter-U)[V](#letter-V)

## #

- [1% ruleInvestingA screening heuristic that monthly rent should be roughly one percent of purchase price.](/glossary/one-percent-rule/)
- [1031 exchangeInvestingA tax provision allowing capital gains deferral when investment property is exchanged for other like-kind investment property.](/glossary/1031-exchange/)
- [50% ruleInvestingA rough assumption that operating expenses will consume about half of gross rent, excluding the mortgage.](/glossary/fifty-percent-rule/)

## A

- [AcknowledgmentClosing, title & notaryA notarial act where the signer confirms to the notary that the signature is theirs and was made willingly.](/glossary/notary-acknowledgment/)
- [AmortizationMortgage & lendingThe schedule that splits each mortgage payment between interest and principal over the life of the loan.](/glossary/amortization/)
- [ApostilleClosing, title & notaryA certificate authenticating a public document for legal use in another participating country.](/glossary/apostille/)
- [AppraisalBuying a homeA licensed appraiser’s independent opinion of a property’s market value, ordered by the lender.](/glossary/appraisal/)
- [Appraisal gapBuying a homeThe shortfall when a property appraises below the contract price, which the buyer generally must cover in cash.](/glossary/appraisal-gap/)
- [AppreciationInvestingAn increase in a property’s value over time, from market movement or from improvements made to it.](/glossary/appreciation/)
- [APR (Annual Percentage Rate)Mortgage & lendingThe yearly cost of a loan expressed as a percentage, including the interest rate plus most lender fees.](/glossary/apr/)
- [ARM (Adjustable-Rate Mortgage)Mortgage & lendingA mortgage whose interest rate is fixed for an initial period and then adjusts on a set schedule against an index.](/glossary/arm/)

## C

- [CAGR (Compound Annual Growth Rate)InvestingThe smoothed annual rate at which a value would have grown to reach its ending amount over a period.](/glossary/cagr/)
- [Cap rate (Capitalization rate)InvestingNet operating income divided by property value, the unlevered yield used to compare properties.](/glossary/cap-rate/)
- [CapEx (Capital expenditures)InvestingLarge, infrequent replacements (roof, HVAC, water heater), budgeted monthly even though they are paid rarely.](/glossary/capex/)
- [Cash flowInvestingWhat remains each month after rent has covered operating expenses and debt service.](/glossary/cash-flow/)
- [Cash-on-cash returnInvestingAnnual pre-tax cash flow divided by the cash you actually invested, measuring return on money out of pocket.](/glossary/cash-on-cash-return/)
- [Cash-out refinanceMortgage & lendingRefinancing for more than you owe and taking the difference in cash, converting equity into spendable funds.](/glossary/cash-out-refinance/)
- [Closing costsMortgage & lendingThe lender, title, and third-party fees due at closing: separate from your down payment.](/glossary/closing-costs/)
- [Closing DisclosureBuying a homeThe final statement of your loan terms and closing costs, provided a set number of days before closing.](/glossary/closing-disclosure/)
- [CMA (Comparative Market Analysis)Selling a homeAn agent’s pricing analysis built from recent comparable sales, active listings, and expired listings nearby.](/glossary/cma/)
- [CondominiumClosing, title & notaryOwnership of an individual unit plus a shared interest in common areas, governed by an association.](/glossary/condo/)
- [Conforming loanMortgage & lendingA conventional mortgage that fits the size and eligibility rules the major agencies will buy.](/glossary/conforming-loan/)
- [ContingencyBuying a homeA condition in the purchase contract that must be satisfied, or the buyer can withdraw without losing earnest money.](/glossary/contingency/)
- [Conventional loanMortgage & lendingA mortgage not insured or guaranteed by a government program such as FHA, VA, or USDA.](/glossary/conventional-loan/)

## D

- [Days on market (DOM)Selling a homeHow long a listing has been active, a signal buyers read as evidence about pricing.](/glossary/days-on-market/)
- [DeedClosing, title & notaryThe document transferring ownership of real property, recorded in the public record at closing.](/glossary/deed/)
- [DepreciationInvestingA tax deduction that lets an owner write off the cost of a rental building over a set recovery period.](/glossary/depreciation/)
- [Discount pointsMortgage & lendingAn optional upfront fee paid to the lender in exchange for a permanently lower interest rate.](/glossary/discount-points/)
- [Down paymentMortgage & lendingThe share of the purchase price you pay in cash, becoming your starting equity in the property.](/glossary/down-payment/)
- [DSCR (Debt Service Coverage Ratio)InvestingNet operating income divided by annual debt service: how many times the property covers its own loan payment.](/glossary/dscr/)
- [DSCR loanMortgage & lendingAn investment-property loan qualified on the property’s rental income rather than the borrower’s personal income.](/glossary/dscr-loan/)
- [DTI (Debt-to-Income Ratio)Mortgage & lendingThe share of your gross monthly income taken up by monthly debt payments, including the proposed housing payment.](/glossary/dti/)
- [Due diligenceBuying a homeThe defined window after acceptance when a buyer investigates the property and can act on what they find.](/glossary/due-diligence/)

## E

- [Earnest moneyBuying a homeA deposit made with an offer to show the buyer is serious, held in trust and credited toward closing.](/glossary/earnest-money/)
- [EquityInvestingThe difference between what a property is worth and what is owed against it.](/glossary/equity/)
- [Escalation clauseBuying a homeAn offer term that automatically raises your price above competing offers, up to a stated maximum.](/glossary/escalation-clause/)
- [Escrow account (impounds)Mortgage & lendingAn account your servicer uses to collect and pay your property taxes and homeowners insurance alongside the mortgage payment.](/glossary/escrow-account/)
- [Escrow officer (settlement agent)Closing, title & notaryThe neutral third party who holds funds and documents and carries out the closing according to instructions.](/glossary/escrow-officer/)
- [EvictionRenting & managementThe legal process for removing a tenant, which must follow statutory notice and court procedure.](/glossary/eviction/)

## F

- [Fair housingRenting & managementLaws prohibiting discrimination in housing based on protected characteristics, applying to advertising, screening, and terms.](/glossary/fair-housing/)
- [FHA loanMortgage & lendingA government-insured mortgage designed to widen access to financing, with lower down payment and credit thresholds than most conventional loans.](/glossary/fha-loan/)
- [Final walkthroughBuying a homeA last inspection shortly before closing to confirm the property’s condition and that agreed repairs were done.](/glossary/walkthrough/)
- [Fixed-rate mortgageMortgage & lendingA mortgage whose interest rate never changes, so principal and interest stay the same for the full term.](/glossary/fixed-rate-mortgage/)

## G

- [Gift fundsMortgage & lendingMoney from an eligible donor toward your down payment or closing costs, allowed when documented with a clear paper trail.](/glossary/gift-funds/)
- [GRM (Gross Rent Multiplier)InvestingProperty price divided by annual gross rent, a fast screening ratio that ignores expenses.](/glossary/grm/)

## H

- [HELOC (Home Equity Line of Credit)Mortgage & lendingA revolving credit line secured by your home equity, drawn and repaid like a credit card during a draw period.](/glossary/heloc/)
- [HOA (Homeowners Association)Renting & managementAn association governing a community, collecting dues and enforcing rules that can include rental restrictions.](/glossary/hoa/)
- [Home inspectionBuying a homeA buyer-ordered evaluation of a property’s condition and systems, used to decide whether and how to proceed.](/glossary/home-inspection/)
- [Homeowners insuranceClosing, title & notaryProperty and liability coverage a lender requires, typically paid a year in advance at closing then escrowed.](/glossary/homeowners-insurance/)
- [House hackingInvestingLiving in one unit of a property while renting the others, using owner-occupied financing to buy an income property.](/glossary/house-hacking/)

## I

- [Interest rate (note rate)Mortgage & lendingThe percentage charged on your loan balance, the number your principal and interest payment is calculated from.](/glossary/interest-rate/)

## J

- [Jumbo loanMortgage & lendingA mortgage larger than the conforming limit for its county, underwritten to the lender’s own standards.](/glossary/jumbo-loan/)
- [JuratClosing, title & notaryA notarial act where the signer swears or affirms the truth of a document and signs in the notary’s presence.](/glossary/jurat/)

## L

- [Lease agreementRenting & managementThe contract setting the terms of a tenancy: rent, duration, responsibilities, and how it ends.](/glossary/lease-agreement/)
- [LeverageInvestingUsing borrowed money to control a larger asset, amplifying both returns and losses.](/glossary/leverage/)
- [LienClosing, title & notaryA legal claim against a property securing a debt, which generally must be resolved before clear title transfers.](/glossary/lien/)
- [List-to-sale price ratioSelling a homeFinal sale price divided by list price, showing how closely homes are selling to asking.](/glossary/list-to-sale-ratio/)
- [Listing agreementSelling a homeThe contract between a seller and a brokerage authorizing marketing of the property and setting compensation and duration.](/glossary/listing-agreement/)
- [Loan EstimateMortgage & lendingA standardized three-page disclosure showing a loan’s rate, payment, and closing costs in a fixed format.](/glossary/loan-estimate/)
- [LTV (Loan-to-Value Ratio)Mortgage & lendingThe loan amount as a percentage of the property’s value, the main measure of how much equity cushions the loan.](/glossary/loan-to-value/)

## M

- [Maintenance reserveRenting & managementMoney set aside monthly for routine repairs, so ordinary problems do not become cash-flow emergencies.](/glossary/maintenance-reserve/)
- [MIP (Mortgage Insurance Premium)Mortgage & lendingThe mortgage insurance charged on an FHA loan: an upfront premium plus an annual premium collected monthly.](/glossary/mip/)
- [MLS (Multiple Listing Service)Selling a homeThe cooperative database brokerages use to share listings and the source most consumer portals draw from.](/glossary/mls/)
- [Move-out inspectionRenting & managementA documented walkthrough at the end of a tenancy, compared against move-in condition to determine deductions.](/glossary/move-out-inspection/)

## N

- [Net proceedsSelling a homeWhat a seller actually receives after loan payoff, commissions, and closing costs are deducted from the sale price.](/glossary/net-proceeds/)
- [NOI (Net Operating Income)InvestingIncome after operating expenses but before debt service, taxes on income, and capital expenditures.](/glossary/noi/)
- [Non-QM loanMortgage & lendingA mortgage outside the Qualified Mortgage rules, using alternative documentation such as bank statements or asset depletion.](/glossary/non-qm/)
- [Normal wear and tearRenting & managementThe gradual deterioration expected from ordinary use, which cannot be charged against a security deposit.](/glossary/normal-wear-and-tear/)
- [Notice to vacateRenting & managementWritten notice that a tenancy will end, with a lead time set by the lease and by statute.](/glossary/notice-to-vacate/)

## O

- [Occupancy typeInvestingHow you will use a property (primary residence, second home, or investment), which drives pricing and program eligibility.](/glossary/occupancy/)
- [Operating expensesInvestingThe recurring costs of running a property: taxes, insurance, management, maintenance, and owner-paid utilities.](/glossary/operating-expenses/)
- [Opportunity zoneInvestingA designated area where qualifying long-term investments can receive preferential capital gains treatment.](/glossary/opportunity-zone/)
- [Origination feeMortgage & lendingThe lender’s charge for processing and underwriting the loan, shown in the closing cost section of the Loan Estimate.](/glossary/origination-fee/)

## P

- [PITIMortgage & lendingPrincipal, Interest, Taxes and Insurance, the four parts of a typical monthly mortgage payment.](/glossary/piti/)
- [PMI (Private Mortgage Insurance)Mortgage & lendingInsurance on a conventional loan that protects the lender when the borrower has less than the program’s required equity.](/glossary/pmi/)
- [Pre-approvalMortgage & lendingA lender’s conditional commitment to lend after reviewing your credit, income, and assets: stronger than a pre-qualification.](/glossary/pre-approval/)
- [Pre-qualificationMortgage & lendingAn early estimate of what you might borrow, based on information you provide rather than verified documentation.](/glossary/pre-qualification/)
- [PrepaidsMortgage & lendingMoney collected at closing to fund your own future taxes and insurance, plus interest from closing to month end.](/glossary/prepaids/)
- [PrincipalMortgage & lendingThe amount borrowed and still owed, separate from the interest charged on it.](/glossary/principal/)
- [Property management feeRenting & managementWhat a manager charges to operate a rental, commonly a percentage of collected rent plus defined additional fees.](/glossary/property-management-fee/)
- [Property taxClosing, title & notaryAn annual tax assessed by local government on real property, usually collected monthly through escrow.](/glossary/property-tax/)

## R

- [Rate lockMortgage & lendingA lender’s commitment to hold a quoted interest rate for a set number of days while your loan is processed.](/glossary/rate-lock/)
- [RecastMortgage & lendingRe-amortizing an existing loan after a large principal payment, lowering the monthly payment while keeping the rate and term.](/glossary/recast/)
- [RecordingClosing, title & notaryFiling the deed and security instrument with the county so the transfer and any liens become public record.](/glossary/recording/)
- [RefinanceMortgage & lendingReplacing an existing mortgage with a new one to change the rate, the term, or both.](/glossary/refinance/)
- [Rent rollRenting & managementA schedule of every unit with its tenant, rent, lease dates, and deposit, the income snapshot of a property.](/glossary/rent-roll/)
- [Rent-readyRenting & managementThe condition a unit must reach before it can be marketed: clean, functional, safe, and legal to occupy.](/glossary/rent-ready/)
- [Renters insuranceRenting & managementA tenant’s policy covering personal belongings and liability, which a landlord’s policy does not cover.](/glossary/renters-insurance/)
- [REPC (Real Estate Purchase Contract)Buying a homeUtah’s standard residential purchase contract, which sets the deadlines the whole transaction runs on.](/glossary/repc/)
- [ReservesMortgage & lendingLiquid assets left after closing, measured in how many months of the full housing payment they would cover.](/glossary/reserves/)
- [ROI (Return on Investment)InvestingTotal return relative to what was invested, usually including cash flow, principal paydown, and appreciation.](/glossary/roi/)
- [RON (Remote Online Notarization)Closing, title & notaryNotarization performed over live audio-video with identity verification, producing a digitally signed and sealed record.](/glossary/ron/)

## S

- [Security depositRenting & managementFunds held during a tenancy to cover unpaid rent or damage beyond normal wear, returned under statutory rules.](/glossary/security-deposit/)
- [Self-employed incomeMortgage & lendingIncome from self-employment, generally qualified on net figures after business deductions rather than gross receipts.](/glossary/self-employed-income/)
- [Seller concessionsBuying a homeMoney the seller contributes toward the buyer’s closing costs, capped by the loan program.](/glossary/seller-concessions/)
- [Seller’s disclosureSelling a homeThe seller’s written statement of known material facts and defects about the property.](/glossary/sellers-disclosure/)
- [Settlement (closing)Closing, title & notaryThe meeting where documents are signed, funds are disbursed, and ownership transfers.](/glossary/settlement/)
- [StagingSelling a homePreparing and presenting a home so buyers can picture living in it, from decluttering through furnishing.](/glossary/staging/)
- [Streamline refinanceMortgage & lendingA reduced-documentation refinance available on some government-backed loans when the result benefits the borrower.](/glossary/streamline-refinance/)

## T

- [Temporary buydownMortgage & lendingA prepaid subsidy that reduces the payment for the first year or two, after which the payment rises to the note rate.](/glossary/temporary-buydown/)
- [Tenant screeningRenting & managementEvaluating applicants against consistent, lawful criteria: income, rental history, credit, and background.](/glossary/tenant-screening/)
- [Title insuranceClosing, title & notaryA policy protecting against defects in a property’s ownership history, issued after a search of the public record.](/glossary/title-insurance/)
- [Title searchClosing, title & notaryAn examination of public records to confirm ownership and surface liens, easements, or other claims.](/glossary/title-search/)
- [TurnoverRenting & managementThe work and vacancy between one tenancy and the next: cleaning, repairs, marketing, and re-leasing.](/glossary/turnover/)

## U

- [UnderwritingMortgage & lendingThe lender’s review of your credit, income, assets, and the property to decide whether the loan can be made.](/glossary/underwriting/)
- [USDA loanMortgage & lendingA government-backed loan for eligible rural and suburban areas that can allow no down payment for qualifying borrowers.](/glossary/usda-loan/)

## V

- [VA loanMortgage & lendingA mortgage guaranteed by the Department of Veterans Affairs for eligible service members, veterans, and some surviving spouses.](/glossary/va-loan/)
- [Vacancy rateInvestingThe share of time or units sitting empty, budgeted as a reduction to expected rental income.](/glossary/vacancy-rate/)

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