Unit of measurement of land, 1 acre is equivalent to 4048.32 square meters and 43560 square feet.
Adjustable Rate Mortgage (ARM)
A mortgage that changes interest rate periodically according to a pre-selected index. This is a scheme where the interest rate varies according to the market norms or RBI regulations.
The date on which the interest rate changes for an Adjustable Rate Mortgage (ARM).
The person who is allotted a property, either by government body/authority or by a developer.
Facilities provided by a developer/promoter in a Real Estate development.
These could include power back-up, swimming pool, landscaped gardens, club house, children's play area or park, etc. These constitute the "extras" and are intended to improve the quality of life of the residents in the development.
A sub-tenure holder is known as an Asami.
Also known as Real Estate Agent, Realtor or Broker. An agent brokers a transaction for a fee.
The prevailing norms for brokering fees (typical) are:
- Equivalent to one month's rent if it is a rental transaction
- 2% of the final sale value in case of capital transaction. But the fees vary according to cities and transaction value. Generally for a high-value transaction, the agents may charge less.
The systematic and continuous payment of a mortgage loan by installments to cover the principal and interest.
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 15-year fixed-rate mortgage, the amortization term is 180 months, so in 180 months the mortgage loan will be completely paid off.
Means a part of any property, intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floors or any; part or parts thereof, in a multi-storeyed building to be used for residence or office or for the practice of any profession or for the carrying on of any occupation, trade or for business or such other type of independent use as may be prescribed, and with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway, and includes any garage or room (whether or not adjacent to the multi-storeyed building in which such apartment is located) provided by the promoter for use by the owner of such an apartment for parking any vehicle or as the case may be for the residence of any domestic aide employed in such an apartment.
A sum of money paid to the Housing Finance Company for estimated initial mortgage processing expenses such as appraisal and credit report.
A written report of the estimated value of a property prepared by a certified Real Estate appraiser or a valuer.
An increase in the value of a property due to changes in market conditions or other causes (such as home improvements).
Anything of monetary value that is owned by a person. Assets include real property, personal property, bank accounts, stocks, bonds, mutual funds, etc.
The value that a taxing authority places on real property for the purpose of determining the amount of taxation for that property.
A charge against a property for the purposes of taxation.
A proceeding in a court in which a debtor, who owes more than his or her assets, can relieve the debts by surrendering his or her assets to a court. After bankruptcy, the debtor is discharged and his or her unsecured creditors may not pursue further collection efforts against him or her. Secured creditors continue to be secured by the property, but they may not take any other action to collect from the debtor.
In Benami Ownership, the title of the property is in one party's name and the real ownership is in another party's name.
The person/persons/institution designated to receive the income from a trust, estate or a deed of trust. A contingent beneficiary has conditions attached to his/her/their/its rights.
A Bhumidar is of the class of a tenure-holder under the Delhi Land Reforms Act, 1954. He has the right to use land for any purpose connected with agriculture, farming, pisciculture or poultry. He has no right to use the land for industrial purposes other than those connected directly with the aforesaid activities, unless the land lies within the declared industrial belt.
A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds of that sale to be used for payment of the closing costs on a new house before the present home is sold. The mortgage payment on the present property typically is not counted when determining your ratios for your new home.
Includes the carpet area, the wall thickness and the balcony.
Means property of any kind held by an assessee, whether or not connected with his business of profession, but does not include:
- Any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession.
- Personal effects, that is to say, movable property (including wearing apparel and furniture, but excluding jewelry) held for personal use by the assessee or any member of his family dependent on him.
Sale/Purchase of a property.
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.
The actual usable area of a property i.e. Super Built-up area minus the thickness of the walls and common areas' share gives the carpet area.
CBD or Central Business District
Commercial area and its immediate radius of 2 - 3 kms, typically located towards the city centre, which forms the hub of all major commercial activity in a city. Most of the larger corporate entities, large retail outlets and financial institutions would be located in this area. The Real Estate prices here would be the highest compared to all the other locations in the city.
Unit of land measurement in certain parts of India (mostly Kerala and Tamil Nadu). One cent is equal to 40.01 square meter or 430.55 square feet.
Chain of Title
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.
Includes relief to the poor, education, medical relief or the advancement of any other object of general public utility, but does not include a purpose which relates exclusively to religious teaching and worship.
A title that is free of claims or legal questions about the ownership of the property.
A meeting between the buyer, seller, and lender or their agents, where the property and funds legally change hands. Also called "settlement."
Additional borrower(s) whose income and credit contributes to qualifying for the loan and whose name(s) appear on the loan documents with equal legal obligations.
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.
Any fee paid by a potential borrower to a lender for the lender's guarantee to lend money at a specified rate and within a specified time period.
A formal written offer by a lender stating the terms (such as amount, interest rate, etc.) under which the lender agrees to lend money to a borrower. Also known as a "loan commitment".
A building / property which is used for the purposes of carrying out commercial activity or trading.
Those portions of a building, land and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance.
Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings and parking areas.
Comprehensive Development Plan (CDP)
The Master Plan approved by an authority.
A Real Estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas. Each individual owner may sell or encumber his/her own unit.
A document of agreement between two parties valid under the law of the state.
A short-term, interim loan for financing the cost of construction. The lender or lending company makes payments to the builder at periodic intervals as the construction work progresses.
When there are more than one owner for an immovable property, the status of the property is known to be of the Co-ownership type.
The reasons for a Co-ownership may come about due to various reasons. For example, when a person holding ownership dies without leaving a clear legally valid will and there are two or more legal heirs to the property, there is a case of Co-ownership.
A Co-owner can do whatever he wishes with his part of the property as long as he does not affect the share of the other Co-owners.
A clause in a mortgage that obligates or restricts the borrower on the use of land or promising certain acts and if violated, can result in legal action against a violator.
For example, homeowners' associations often enforce restrictive covenants governing the architectural controls (such as how the house is built and what the house can look like) and maintenance responsibilities. However, land could be subject to restrictive covenants even if there is no homeowner's association.
A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.
The ratio, expressed as a percentage, which results when a borrower's total monthly payment obligation on long-term debts is divided by his or her net effective income or gross monthly income (for conventional loans).
The legal document conveying title to a property.
Also called Constructive Possession, the actual physical possession is called Defacto Possession. The actual possession should be held without force or fraud.
When an immovable property is lent out, the Defacto Possession would be with the tenant and not the landlord. Likewise, if the property is mortgaged the Defacto Possession rests with the mortgagee and not the mortgagor. In both the cases the landlord would have the Dejure Possession of the property.
Failure to make mortgage payments on a timely basis or failure to comply with other requirements of the mortgage.
Also called Juridical Possession, it means possession in the eyes of the law. This may not be accompanied by Defacto Possession. Even when the property is lying locked, the Dejure possessor is the Defacto possessor of the property.
Failure to make mortgage payments when mortgage payments are due, but still within the period allowed before actual default is declared.
A sum of money given to bind the sale of Real Estate (earnest money), or a sum of money given to ensure payment or an advance of funds in the processing of a loan. Deposit could also be the deposit paid to a landlord as part of a rental transaction.
A decline in the value of property brought about by age, physical deterioration, functional or economic obsolescence, etc.
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
Earnest Money Deposit or EMD
A nominal sum of money given as a token to the vendor, signifying the assent to a contract of sale or the like, that the parties are in the earnest or have made up their minds.
A Real Estate appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.
Effective Gross Income
Normal annual income (before taxes) including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.
The physical intrusion of a structure or improvement on the land of another. For example, a neighbor's fence or construction that crosses over your property line.
Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements or restrictions.
A report issued by Registrar of Assurances or Sub-Registrar's office after due verification of the relevant documents certifying that the property in question is free from all encumbrances such as mortgages, leases, easements or restrictions.
The difference between the fair market value of the property and the amount still owed on its mortgage.
Funds and documents that are set aside and held in trust by a third party, usually for payment of taxes and insurance on real property.
For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premias when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of Real Estate.
The account in which a mortgage servicer holds the borrower's escrow payments prior to paying property expenses.
The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance and other bills when due.
Funds collected by the servicer and set aside in an escrow account to pay the borrower's property taxes, mortgage insurance, and insurance.
The use of escrow funds to pay Real Estate taxes, insurance, mortgage insurance, and other property expenses as they become due.
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, mortgage insurance, lease payments, and other items as they become due.
The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at the time time of death.
Examination of Title
The report on the title of a property usually made by a qualified advocate.
The concept of a farmhouse is nothing but the building appurtenant to the agricultural land. A farmhouse may be used for dwelling purposes, or as a storehouse or an out-house.
Farm Property is the general name given to the agricultural property.
Fair Market Value
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
Foreign Exchange Regulation Act came into force in 1973.
- For Individuals:
Pertaining to immovable property, it states that, ". . . no person who is not a citizen of India shall, except with the previous general or special permission of the Reserve Bank of India, acquire or hold or transfer or dispose of by sale, mortgage, lease exceeding five years, gift, settlement or otherwise, any immovable property situated in India".
- For Foreign Companies:
A foreign company herein is the one which has not been incorporated under any law in force in India or in which the non-resident interest is more than 40 percent.
According to the Gazette of India, dated 23-122-1986, foreign companies can acquire or hold any immovable property situated in India, provided such immovable property is necessary for or incidental to carrying on by such company any industrial activity for which the company has obtained a letter of intent/industrial license/certificate of registration from the Government and provided that such company files a declaration with the Reserve Bank of India not later than 90 days from the date of such acquisition or holding, in such a manner as may be required.
A mortgage that is the primary lien against a property and has priority over any subsequently recorded mortgages.
Fixed Rate Mortgage (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.
Foreclosure of Loan
Closure of a loan before the end of the actual loan tenure. Usually this carries a pre-payment penalty (normally 2% of the balance loan amount - however, this would vary from one HFI to another).
A property with clear titles, nil encumbrances and nil claims, which can be transacted freely. A freehold property, when sold, is transferred to the buyer entirely unlike leasehold property.
Fully Amortized ARM
An Adjustable Rate Mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balances, at the interest accrual rate, over the amortization term.
A written explanation signed by the individual giving the gift stating that it is a bona fide gift of money and there is no obligation to repay the money at any time.
Money paid to the landlord by the tenant in India (generally in much sought-after locations) when renting a property. Goodwill money, unlike Security Deposit, is not returnable to the tenant.
Gross Monthly Income
Your total monthly income earned before taxes are deducted, which is why it is also known as before-tax income.
Unit of measurement in certain parts of India. One Gunta is equal to 101.20 square meters and 1088.99 square feet.
The person who is the lawful obvious inheritor of an estate or a property.
The administrative jurisdiction of a revenue authority.
Homeowners' Association Dues
Fees imposed by condominium or homeowners' associations for maintenance of common areas.
Includes land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth or permanently fastened to anything which is attached to the earth, but not standing timber, growing crops not grass.
Any property used for a manufacturing purpose. Areas where industrial activity may be carried out are specified by the respective local authorities.
The percentage of a loan amount, which is paid for being allowed to use the loan amount for a specified time.
A construction loan made during construction of a building or a project. A permanent loan typically replaces the construction loan once the building is completed.
Real Estate owned with the intent of supplementing one's income and is not intended for owner occupancy (i.e. rental houses, apartment buildings, etc.).
Joint Ownership Agreement
An agreement between owners defining their rights, ownership, monetary obligations and responsibilities.
Two or more persons own a property. Joint tenants with common law right of survivorship means that the survivor inherits the property without reference to the deceased's will. Creditors may sue to have the property divided to settle claims against one of the owners.
Acknowledgement of occupation/ownership in the revenue records of the corporation of the city / town municipal corporation / council or similar authority.
Any person who has a valid and legal right, title and interest in the property.
Lease is where there are no two kinds of payments made to the landlord by the tenant unlike a rental transaction. A sum of money is paid to the landlord at the beginning of the lease tenure, which is repaid without interest when the tenure ends. No monthly payments are made.
Lease Hold Property
A property "bought" for a certain period of time. The "owner" of such a property will have "bought" the property from the original landlord and is entitled lawfully to rent, lease or "sell" the property to a third party during the period of leasehold. After the leasehold period, the property goes back into the original landlord's possession.
Loan-to-Value Ratio (LTV)
The ratio of the amount of your loan to the appraised value of the home. The LTV will affect loan programs available to the borrower and generally, the lower the LTV the more favorable the terms of the loan programs offered by lenders.
Long-term Capital Asset
This means a capital asset held by an assessee for nothing less than thirty six months immediately preceding the date of transfer.
Rate Lock Option. A written agreement guaranteeing the homebuyer a specified interest rate provided the loan is closed within a set period of time, usually within 60 days. The lock-in also usually specifies the number of points to be paid at closing.
The termination or due date on which final payment on a loan must be paid in full.
A legal document that pledges a property to the lender as security for payment of the loan.
Net Effective Income
The borrower's gross income after taxes have been deducted.
Note: A written agreement containing a promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand.
Any person who has a valid and legal right, title and interest in the property.
A property purchase transaction in which the property seller provides all or a part of the financing.
A revenue authority, which collects taxes and maintains revenue records of a particular village.
The outer limits of a city or the areas abutting the city borders.
An extra payment made on account of the goodwill of location and quality of purchase.
Principal, interest, taxes and insurance which are the components of a monthly mortgage payment.
The carpet area.
Those expenses of property which are paid in advance (and placed in escrow accounts) of their due date and will usually be prorated upon sale, such as taxes, insurance , etc.
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule.
A residence, which the borrower intends to occupy as the principle residence (where they will live most of the time).
The amount of debt, not including interest. The face value of a note or mortgage.
The preparation of a mortgage loan application and supporting documentation to be delivered to a lender for their consideration.
Means the authority, person or co-operative society as the case may be, by which, or who has constructed any multi-storeyed building.
Purchase Contract (Agreement or Offer)
An agreement between the buyer and the seller of the property, which sets forth the price and terms of the sale. Also known as a sales contract.
A restriction contained in a legal document which limits the rights of a person having an interest in the land but, by its wording envisages the possibility of removing the limitation on terms agreed between the parties eg. a covenant by a lessee not to assign or sublet without the landlord's written consent. In certain cases, such as the one quoted, statute law strengthens the applicant's position by importing such words as "such consent not to be unreasonably withheld".
A limit on how much the interest rate can change, either at each adjustment period or over the life of the loan on Adjustable Rate Mortgages (ARMs).
Real Estate or real property owned by an individual or business.
Short form of the term "Real Estate Agent".
The process of paying off one loan with the proceeds from a new loan using the same property as security.
A legal documenting and subsequent recognition of a transaction under the State. This can either be a rental or capital transaction and there is a fee attached to registering a transaction, which varies from state to state.
Rental arrangement essentially means, for a monthly fee, the property is let out by the landlord to a tenant. Most often than not, there is a Security Deposit that goes along with this arrangement. This may also be termed as Advance Rent. This is normally equivalent to 10 months, but may vary. The Security Deposit or Advance Rent is repayable to the tenant after the tenancy is terminated without interest.
Any property, which is used for residential purposes. These areas are specifically earmarked as such by the concerned local authority.
Secondary Residence (Second Home)
A residence other than the borrower's primary residence, which the borrower intends to occupy for a portion of each year and it must be suitable for year-round occupancy.
In lending, security refers to the collateral given, deposited or pledged to secure the payment of the loan.
Interest which is computed only on the principal balance.
A print, prepared by a registered surveyor, showing the measurements of the boundaries of a parcel of land, together with the location of all improvements on the land and sometimes its area and topography.
Super Built-up Area
Plinth area along with proportionate common areas' share makes up the Super Built-up area. The common areas include corridors, balconies, swimming pool, garden, etc.
When a property occupied by a tenant is sold or purchased, the Dejure Possession transfers to the new owner. The actual possession of the property cannot be given to the new owner and hence it is said that the possession is Symbolic Possession.
The holder of Defacto Possession should be informed about the transfer of ownership, for the tenants have to pay future rent to the new owner of the property.
Revenue authority or officer empowered to impose and collect revenue from a particular jurisdiction.
One who is not an owner but enjoys possession of a property from the owner on certain specified terms and conditions for a temporary period.
An undivided interest in property taken by two or more persons. The interest need not be equal and upon death of one or more persons, there is no right of survivorship, so if one dies, then his/her interest passes to his/her heirs and not necessarily to the co-owner(s).
The time limit within which a loan must be repaid.
The document that provides legal evidence that the person has the right to the possession of the land.
An investigation of public records into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear ownership.
Total Debt Ratio
Monthly debt and housing payments divided by gross monthly income. Also known as Obligations-to-Income Ratio or Back-End Ratio.
Any activity that leads to an exchange between two parties - buyer and seller/landlord and tenant etc.
A value of the property that is lesser than the fair market value. Registration fee for a property is based on the value of the property in case of capital transaction or rent in case of rental transaction.
Analysis of risk and setting of an appropriate rate and term for a mortgage on a given property for given borrowers.
Verification of Employment (VOE)
A document signed by the borrower's employer verifying his/her position and salary.
Willing Seller-Willing Buyer
An assumption sometimes made for valuation purposes that the owner of the property concerned is willing to dispose of his interest therein and that there is at least one genuine purchaser in the market for that interest, whether or not such is actually the case at the date of valuation.
It is a value at a given time, the result of making one or more annual of periodic deductions for depreciation against capital cost or worth.
No information available.
Give up possession, especially by the tenant at the end of a lease.
Parts of a city or town are allocated and categorized into zones, which in turn will have a bearing on factors like type of property that can be constructed, number of floors allowed for construction, etc.