Law Offices of Elizabeth A. Edwards
462 Danbury Road
CT 06829
P.O. Box: 936
CT 06829

Real Estate Glossary of Terms

Adjustable Mortgage Loans (AML'S) - Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages, Flexible Rate Loans, and Variable Rate Loans.

Adverse Possession- Possession inconsistent with the right of the record owner Affidavit of Title-An affidavit by a seller of real property that, as of a certain date, no defects of title exist except those which have been disclosed in the sales contract or deed.

Amortization- Payment of a debt in equal periodic installments of principal and interest.

Annual Percentage Rate- The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. For example: 6% add-on interest would be more than 6% simple interest, even though both would say 6%. The APR is disclosed as a requirement of federal truth in lending statutes.

Balloon Note- A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a "balloon" is due at maturity.

Condominium- A structure of two or more units, the interior space of which are individually owned; the balance of property (both land and building) is owned in common by the owners of the individual units. The size of each unit is measured from the interior surfaces of the exterior walls, floors, and ceiling. The balance of the property is called the common area.

Deed- A written instrument duly executed and delivered for the purpose of conveying title to real estate.

Easement- A privilege or right of use or enjoyment which one person may have in the lands of another; for example, a right-of-way for utility lines or joint driveway.

Encroachment- The presence of a structure or any improvements partly or entirely upon the property of another.

Encumbrance- Any right to or interest in land which may be held by third parties to the lessening of the value of the title to real estate; such as a judgment, unpaid taxes, other liens or easements.

Equity- The interest or value which an owner has in real estate over and above the debts against it.

Equity Line of Credit- A combination of a line of credit and equity loan. A maximum loan amount is established based on credit and equity. A mortgage is recorded against the potential borrower's property for the maximum loan amount. The potential borrower has the right to borrow, as needed, up to the amount of the mortgage.

Fair Market Value- Price that probably would be negotiated between a willing seller and a willing buyer in a reasonable time. Usually arrived at by comparable sales in the area.

Fixtures- Personal property which is permanently attached to real property, and is legally treated as real property while it is so attached. Fixtures, not specifically excepted from an accepted offer to purchase, pass with the real estate.

Flood Insurance- Insurance indemnifying against loss by flood damage. Required by lenders in areas designated as potential flood areas. The insurance is private but federally subsidized.

Foreclosure- A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner(s) of property in order to sell the property to satisfy a lien against it.

Grantee- The buyer of real estate

Grantor- The seller of real estate

Hazard Insurance- Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc., depending upon the terms of policy.

Joint Ownership- Property owned by more than one person or entity.

Joint Tenancy- An undivided interest in property, taken by two or more joint tenants. The interests must be equal, accruing under the same conveyance, and beginning at the same time. Upon the death of a joint tenant, the interest passes to the surviving tenants, rather than to the heirs of the deceased.

Lease- An agreement by which an owner of real property (lessor) gives the right of possession to another (lessee), for a specified period of time (term) and for a specified consideration (rent).

Lien- A hold or claim which one person has upon the property of another as a security for some debt or change.

Mortgagee- The lender under the mortgage

Mortgagor- The borrower under the mortgage

Negative Amortization- A condition created when a loan payment is less than interest alone. Even though payments are made on time, the amount owing increases.

Note- A unilateral agreement containing an express and absolute promise of the signer to pay a named person, or order, or bearer, a definite sum of money at a specified date or on demand. Usually provides for interest and, concerning real property, is secured by a mortgage.

Release- An instrument releasing property from the lien of the mortgage, judgment, etc. RESPA (Real Estate Settlement Procedures Act)- A federal statute effective June 20, 1975, requiring disclosure of certain costs in the sale of residential (one to four family) improved property which is to be financed by a federally insured lender.

Restriction- A limitation placed upon the use of real estate. Some common restrictions are setback lines prohibiting the erection of any part of a building less than a specified number of feet from the street line.

Short Sale- A sale of property which includes some forgiveness of debt by the lender under a mortgage.

Title- The sum of all the facts on which ownership is founded, or by which ownership is proved.

Title Defect- Any circumstance that adversely affects or restricts the title or marketability of the property

Title Failure- Any circumstance that defeats the right of ownership of property by the owner of record

Title Search- The examination of records comprising a history of the title to real estate

Warranty Deed- A deed containing a covenant whereby the grantor agrees to protect the grantee against any claimant not recited in the deed.


At The Law Offices of Elizabeth A. Edwards, LLC, I represent clients throughout Fairfield County, including Georgetown, Ridgefield, Danbury, Wilton, Weston, Redding, Westport, Fairfield, Norwalk, Easton, Trumbull, Bethel, Newtown, Darien, New Canaan, Stamford and Greenwich, Connecticut.

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