Real Estate Investment Banking,

IMPOUND ACCOUNT
An account held by the lender to which the borrower pays monthly installments, collected as part of the monthly mortgage payment, for annual expenses such as taxes and insurance. The lender disburses impound account funds on behalf of the borrower when they become due. (Also known as Escrow Account.)

BUFFER ZONE
A strip of land separating one parcel from another.

LOAN ORIGINATION FEE
Fee charged by a lender to cover administrative costs of processing a loan.

DISCOUNT POINTS (OR POINTS)
Points are an up-front fee paid to the lender at the time that you get your loan. Each point equals one percent of your total loan amount. Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front since points are paid in cash at closing.

DEPOSIT
Money offered by a prospective buyer as an indication of good faith in entering into a contract to purchase; earnest money; security for the buyer's performance of a contract.

PERCENTAGE LEASE
A lease whose rental is based on a percentage of the monthly or annual gross sales made on the premises.

PRORATE
To divide or distribute proportionately.

DISTRAINT
The right of a landlord, pursuant to a court order, to seize a tenants belongings for rents in arrears.

BUILDING RESIDUAL TECHNIQUE
A method of determining the value of an improvement normally used in appraising income property.

OPINION OF TITLE
An opinion by a person competent in examining titles, usually a title attorney, as to the status of the title of a property.

PROPERTY
The rights or interests a person has in the thing owned; not, in the technical sense, the thing itself. These rights include the right to possess, to use, to encumber, to transfer and to exclude, commonly called the "bundle of rights."

MORTGAGOR
The borrower in a mortgage loan transaction.

MISREPRESENTATION
A false statement or concealment of a material fact made with the intent to induce some action by another party.

COFI
See Cost of Funds Index.

CONVERTIBLE ARMS
A type of ARM loan with the option to convert to a fixed-rate loan during a given time period.

CONSTRUCTIVE EVICTION
Acts done by a landlord which so materially disturb or impair the tenant's enjoyment of the leased premises that a tenant is effectively forced to move out and terminate the lease without liability for any further rent.

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.

PERCOLATION TEST
A hydraulic engineer's test of soil to determine the ability of the ground to absorb and drain water.

VENDEE
The purchaser of realty; the buyer. The buyer under an agreement of sale.

PER DIEM INTEREST
Interest calculated per day. (Depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. Your first mortgage payment will probably be due the first day of the following month.)

BASE LINE AND MERIDIAN
An imaginary set of lines used by surveyors to locate and describe land under the Rectangular Survey Method of property description used in most mainland states.

FEASIBILITY STUDY
An analysis of a proposed project with emphasis on the attainable income, probable expenses, and most advantageous use and design.

BUILDING PERMIT
A written permission granted by the County Building Department and required prior to beginning the construction of a new building or other improvement (including fences, fence walls, retaining walls and swimming pools).

BUILDING RESIDUAL TECHNIQUE
A method of determining the value of an improvement normally used in appraising income property.

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.

ORIGINATION FEE
Fee charged by a lender to cover administrative costs of processing a loan.

TENANT
In general, one who holds or possesses property, such as a life tenant or a tenant for years; commonly used to refer to a lessee under a lease.

ZONING
The regulation of structures and uses of property within designated districts or zones. Zoning regulates and affects such things as use of the land, types of structure permitted, building heights, setbacks, and density (the ratio of land area to improvement area).

FANNIE MAE
A common nickname for the Federal National Mortgage Association.