First Horizon Home Loan,

RESERVE FUND
Monies set aside as a cushion of capital for future payment of items such as taxes, insurance, furniture replacement, deferred maintenance, etc.; sometimes referred to as an impound account.

ANNUAL PERCENTAGE RATE
The relationship of the total Finance Charge to the total amount to be finance as required under the Federal Truth-in-Lending Law.

POCKET LISTING
A listing which is retained by the listing broker or salesperson, who does not make it available to other brokers in the office or to other Multiple Listing Service members.

PREPAYMENT
Full or partial repayment of the principal before the contractual due date.

EQUITY
That interest or value remaining in property after payment of all liens or other charges on the property. A owner's equity is normally the monetary interest over and above the mortgage indebtedness.

BENEFICIARY
A person who receives the benefits from the gifts or acts of another, such as one who is designated to receive the proceeds from a will, insurance policy or trust.

SUBJECT TO MORTGAGE
A grantee taking title to real property "subject to mortgage" is not personally liable to the mortgagee for payment of the mortgage note. In the event the grantor-mortgagor defaults in paying the note, the grantee could, however, lose property, and thus his equity, in a foreclosure sale.

FIDUCIARY
A relationship which implies a position of trust or confidence wherein one is usually entrusted to hold or manage property or money for another. Among the obligations a fiduciary owes to the principal are duties of loyalty; obedience; full disclosure; the duty to use skill, care and diligence; and the duty to account for all monies.

COMMITMENT
A promise to lend and a statement by the lender of the terms and conditions under which a loan is made.

COMMON AREAS
Land or improvements designated for the use and benefit of all residents, property owners and tenants.

FLOOR DUTY
A frequent practice in real estate brokerage offices of assigning one sales agent the responsibility for handling all telephone calls and office visitors for a specified period of time.

APPRAISAL
A written estimate of a property's current market value completed by an impartial party with knowledge of real estate markets.

POINTS
A generic term for a percentage of the principal loan amount which the lender charges for making the loan; each point is equal to one percent of the loan amount.

CAP RATE (CAPITALIZATION RATE)
The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital.

TRUST FUND ACCOUNT
An account set up by a broker at a bank or other recognized depository, into which the broker deposits all funds entrusted to him by his principal or others.

BUY-DOWN MORTGAGE
A mortgage loan with a below-market rate for a period of time.

NET LEASE
A lease, usually commercial, whereby the lessee pays not only the rent for occupancy, but also pays maintenance and operating expenses such as tax, insurance, utilities and repairs. Thus the rent paid is "net" to the lessor.