Glossary of Mortgage Terms

Property classification is how lenders, the IRS, and local governments put your home into one of three groups: primary residence, second home, or investment property.

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 qualified mortgage is a home loan that meets federal standards for responsible lending. These standards include limits on fees, a ban on risky loan features, and a check of the borrower's ability to repay.

A quitclaim deed transfers any ownership interest one person has in a property to another person. This is done without any guarantees that the title is free of problems.

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 investment trust (REIT) is a business that owns, runs, or finances real estate that makes money and gives most of its taxable income to shareholders as dividends.

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.