DEED
A written instrument that when properly executed and delivered, conveys title or ownership of real property from the seller to the buyer.

DEPRECIATION
Loss of value in real property brought about by age, physical deterioration and functional or economic obsolescence.

DISCOUNT POINTS
Additional charges required by a lender to buy the interest rate to a below-market rate. Each point is equal to 1% of the loan balance.

DOWN PAYMENT
The difference between the sales price of real estate and the loan amount.

EQUITY
The difference between the fair market value and the existing liens on the property, sometimes referred to as the "owner's interest."

FIRST LIEN
A lien on real property that has priority over all other liens.

FIXED-RATE MORTGAGE
The type of loan where the interest rate will not charge for the entire term of the loan.

FORECLOSURE
A legal proceeding to enforce a lien by sale of the property in order to satisfy the defaulted debt secured by the property.

GOOD-FAITH ESTIMATE
A form provided by a lender (usually at application) that provides a breakdown of estimated closing costs.

INTEREST
Money paid as a charge for the use of money, usually expressed as an annual percentage. Also, a right, share or title in property.

INTEREST RATE
The basic cost of borrowing money, expressed as a percentage.

LEASEHOLD
A method of holding title to a property. The borrower does not actually own the property but has a recorded long-term lease on it. A leasehold estate has a specific duration. Some states allow leases of up to 99 years and consider longer leases to be fee simple ownership.

LIEN
A security claim on property until a debt is satisfied.

LOAN-TO-VALUE RATIO (LTV)
The percentage relationship between the amount of the mortgage loan and the appraised value of sales price of the property - whichever is less.