Glossary of Mortgage Terms

A promissory note is a legal document you sign at closing that spells out your promise to repay your mortgage loan under specific terms, including the interest rate, payment schedule, and total amount borrowed.

A property line map is a drawing that shows the legal boundaries of a piece of land, including the size of the lot, any easements, and the locations of nearby roads and utilities.

Property tax is a fee that local governments charge you every year for the real estate you own. The amount you pay is based on the assessed value of your property and the tax rate in your area. The money goes to schools, roads, and other public services.

A purchase money mortgage is when the seller lends money to the buyer to pay for part or all of the sale. The buyer then pays the seller directly.

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.