Real Estate Terms and Definitions

Alternate Dispute Resolution (ADR) A range of different forums and processes which can be utilized to resolve a dispute. We focus on two forms of ADR in this guide which might be used to negotiate a settlement: administrative settlements and mediation. Borrower A person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms. Fair Housing Act Equity An owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loon(s)from the fair market value of the property. ARM Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the Change in monthly -payment amount, however, is usually subject to a Cap. Mortgage insurance A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price. Fair Market Value The price which a willing buyer will pay a willing seller for a piece of real estate. Federally Assisted Projects A federally assisted project is one which receives Federal reimbursement or payment of some project expenses such as planning, construction, right-of-way acquisition, and property management. Interest rate The amount of interest charged on a monthly loan payment; usually expressed as a percentage. Escrow account A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.

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	Did You Know?
	Property easement is a right to use some part of a property for a specific purpose An express easement may be contained in the deed to the property or in another document. Some examples include: A utility company can run power lines on a property,Adjacent property owners may enter into an agreement to share a common driveway that extends over both properties. An implied easement or prescriptive easement may arise when a use of property continues for a certain period of time.