Glossary of Mortgage Terms

A rate-and-term refinance gives you a new loan with a different interest rate, repayment term, or both, but it doesn't change the amount you owe.

A real estate notary is a licensed professional who witnesses and verifies the signing of mortgage and property documents at closing, helping protect both buyers and lenders from fraud.

A real estate purchase agreement is a legally binding contract between a buyer and seller that spells out the price, terms, contingencies, and timeline for transferring ownership of a home.

A mortgage recast is when a homeowner makes a one-time payment toward the loan's principal balance. The lender then re-amortizes the remaining balance so that the monthly payments are lower, but the interest rate and loan term stay the same.

Rent control is a set of state or local laws that limit how much a landlord can charge for rent or raise the rent on an existing tenant. The goal is to keep housing affordable in areas where there is a lot of demand for it.

A rent-back agreement is a short-term deal that lets a home seller stay in the property and pay rent to the buyer after closing.

A rent-to-own home is a property you lease with an agreement that gives you the right, and sometimes the obligation, to buy that home at a set price once the lease period ends.

Rental property depreciation is a tax deduction that allows real estate investors to recover the cost of an income-producing property by deducting a portion of its value each year over a set recovery period.

A real estate owned (REO) property is a home that a bank, lender, or government agency has taken back after it failed to sell at a foreclosure auction. Because the lender now holds the property on its books, it typically prices and lists it for sale quickly — often below market value — in order to recover its losses.

A resale house is a home that has already been owned and is now up for sale again, as opposed to a brand-new home.