Buying A Hud Home,

LEASE
A lease is both a contract between lessor (landlord)and lessee (tenant) and a conveyance or demise of the premises by the lessor to the lessee. A lease is a contract in that item bodies the agreement between the parties.

CERTIFICATE OF ELIGIBILITY
Document issued by the Veterans Administration to qualified veterans which verifies a veteran's eligibility for a VA guaranteed loan. Obtainable through local VA office by submitting form DD-214 (Separation Paper) and VA form 1880 (request for Certificate of Eligibility).

LIBOR (LONDON INTERBANK OFFERED RATE)
The interest rate charged among banks in the foreign market for short-term loans to one another. A common index for ARM loans.

RESIDUAL PROCESS
An appraisal process used in the income approach to estimate the value of the land and/or the building, as indicated by the capitalization of the residual net income attributable to it.

COVENANT
A written agreement or promise of two or more parties by which either pledges to perform or not to perform specified acts on a property, or which specifies certain uses or non-uses of the property.

DENSITY
A term, frequently used in connection with zoning requirements, which means the maximum number of building units per acre or the number of occupants or families per unit of land area (acre, square mile, etc.); usually the ratio of land area to improvement area.

SECURITY DEPOSIT
Money deposited by or for the tenant with the landlord, to be held by the landlord for the following purposes: to remedy tenant defaults for damage to the premises (be it accidental or intentional), for failure to pay rent due, or for failure to return all keys at the end of the tenancy.

DEALER
An IRS designation for a person who regularly buys and sells real property.

CASH OUT
Any cash received when you get a new loan that is larger than the remaining balance of your current mortgage, based upon the equity you have already built up in the house.The cash out amount is calculated by subtracting the sum of the old loan and fees from the new mortgage loan.

WASTE
An improper use or abuse of property by one in possession of land, who holds less than the fee ownership, such as a tenant, life tenant, mortgagor, or vendee.

GROSS INCOME MULTIPLIER
A useful rule of thumb to estimate market value of income producing residential property. The multiplier is derived by using comparable sales divided by the actual or estimated monthly rentals and arriving at an acceptable average.

CLOSING COSTS
Costs for services that must be performed before your loan can be initiated. Examples include title fees, recording fees, appraisal fee, credit report fee, pest inspection, attorney's fees, and surveying fees.

DUAL AGENCY
Representing both principals (buyer and seller) to a transaction.

RENT
Fixed periodic payment made by a tenant or occupant of property to the owner for the possession and use thereof, usually by prior agreement of the parties.

BOUNDARIES
The perimeters or limits of a parcel of land as fixed by legal description which is usually a metes and bounds description.

WAREHOUSE
A building used to store merchandise and other materials or equipment.

BORROWER (MORTGAGOR)
An individual who applies for and receives funds in the form of a loan and is obligated to repay the loan in full under the terms of the loan.

ACCRETION
The gradual and imperceptible addition to land by alluvial deposits of soil through natural causes, such as shoreline movement caused by streams or rivers.

BONA FIDE
In good faith.

ASSIGNMENT
The transfer of the right, title and interest in the property of one person, the assignor, to another, the assignee. In real estate, there are assignments of mortgages, contracts, agreements of sale, leases, and options, among others.

CLOSING STATEMENT
A detailed cash accounting of a real estate transaction prepared by an escrow officer or other person designated to process the mechanics of the sale, showing all cash that was received, all charges and credits which were made, and all cash that was paid out in the transaction; also called a settlement statement.

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC, OR FREDDIE MAC)
This agency buys loans that are underwritten to its specific guidelines. These guidelines are an industry standard for residential conventional lending.

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