Mortgage insurance A policy that provides protection for the lender in case of default and/or which guarantees repayment of the loan if the borrower becomes disabled or dies.
NATIONAL ASSOCIATION OF REALTORS® The NATIONAL ASSOCIATION OF REALTORS® is the largest trade association in the country serving over 700,000 REALTORS. The purpose of the NATIONAL ASSOCIATION OF REALTORS® is to enhance the ability and opportunity of its members to conduct business successfully and ethically, and to promote the preservation of the right to own, transfer, and use real property.

Offer A proposal to purchase real estate at a paraticular price and subject to other specified terms and conditions. Acceptance of the offer by the seller creates a purchase contract. (Counteroffer: An offer made in response to a different offer.)

Private mortgage insurance or PMI Insurance Insurance issued to a lender to protect it against loss on a defaulted mortgage loan. Its use is usually limited to loans with high loan-to-value ratios (generally in excess of 80%). The borrower pays the premiums.

PITI Payment A loan payment that combines Principal, Interest, Taxes and Insurance.

Point An amount equal to one percent of the loan amount paid to a lender for making the loan. A lender may charge the borrower several points in order to provide the loan.

Principal One of the parties to a transaction. For example, the buyer and seller are principals in the purchase of real property.

REALTOR® A REALTOR® is a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics. This distinguished professional is committed to protecting and promoting private ownership of real property, establishing and maintaining high professional standards of practice, and creating unity in the NATIONAL ASSOCIATION OF REALTORS® organization and respect for the real estate profession. When you want to buy or sell a home, call a REALTOR®.

Seller's agent An agent who represents the seller and owes fiduciary duties to the seller. Usually referred to as the listing agent, this agent is authorized by a property owner to find a buyer or a tenant for the property.

Title Ownership of real property. Title is transferred from one party to another through a document called a deed.

Title insurance Protection for lenders and homeowners against financial loss resulting from legal defects in or other claims against the property's title.

Trust A property interest held by one person for the benefit of another.

VA or US Department of Veterans Affairs A federal agency designed and operated to help veterans enter the housing market. The VA assists veterans in terms of low or no down payment, mortgage qualification assistance and low interest rates.

VA loan A mortgage loan guaranteed by the US Department of Veterans Affairs against loss to the lender, and made through a private lender.

For more definitions, the following books may be helpful to you:

• The Language of Real Estate, 4th Edition by John W. Reilly, published by Real Estate Education Co., Chicago, 1993.


• Real Estate Fundamentals 3rd Edition by Wade E. Gaddy, Jr. and Robert E. Hart, published by Real Estate Education Co., Chicago 1989.


• Real Estate: An Introduction to the Profession 5th Edition by Bruce Harwood and Charles J. Jacobus, published by Prentice-Hall, Inc. Englewood Cliffs, NY, 1990. ·