| Term |
Definition |
| Rate |
In lending, the amount of
interest on the loan expressed as an interest rate or annual
percentage rate (APR) of the principal. |
| Rate Cap Insurance |
Rate cap insurance limits
how much the interest rate can increase during the float period
(usually no more than .5%). For example, if you get the insurance
when the rate is 7.5%, you will be guaranteed that the rate will not
go above 8%. This protects you from uncertainty in the market and
rising rates. With the insurance you will be told that you can
lock-in a rate, usually within 60 days of closing. You can also lock
if the rate goes lower. |
| Rate/Point Options |
These options are all the
combinations of interest rate and points that are offered on a
particular loan. Usually you will find that paying more points
lowers interest rates. |
| Real Estate Broker |
A middle man or agent who
buys and sells real estate for a company, firm, or individual on a
commission basis. The broker does not have title to the property,
but generally represents the owner. |
| Real Estate Settlement
Procedures Act (RESPA) |
RESPA is a federal law that
allows consumers to review information on known or estimated
settlement costs once after application and once prior to or at
settlement. The law requires lenders to furnish information after
application only. |
| Realtor |
A real estate broker or an
associate holding active membership in a local real estate board
affiliated with the National Association of Realtors. |
| Recision |
The cancellation of a
contract. With respect to mortgage refinancing, the law that gives
the homeowner three days to cancel a contract in some cases once it
is signed if the transaction uses equity in the home as security.
|
| Recording Fees |
Money paid to the lender
for recording a home sale with the local authorities, thereby making
it part of the public records. |
| Refinancing |
The process of the same
mortgagor paying off one loan with the proceeds from another loan.
|
| Renegotiable Rate
Mortgage (RRM) |
A loan in which the
interest rate is adjusted periodically. Sometimes referred to as
Adjustable Rate Mortgage. |
| Required Cash |
Required cash is the total
cash required for you to close the loan. This cash goes towards down
payment, points, and other charges paid to the lender. It also goes
towards up-front charges for things like mortgage insurance and
other settlement charges associated with the transaction such as
title insurance, taxes, etc. Your good faith estimate will show how
much cash you need for closing. |
| Reserves |
Verified liquid assets
remaining after the borrower pays downpayment and closing costs.
|
| Residential Mortgage
Credit Report (RMCR) |
Detailed account of the
credit, employment, and residence history, as well as public-record
information, concerning an individual. |
| Restrictive Covenants
|
Private restrictions
limiting the use of real property. Restrictive covenants are created
by deed and may "run with the land," binding all subsequent
purchasers of the land, or may be "personal" and binding only
between the original seller and buyer. The determination whether a
covenant runs with the land or is personal is governed by the
language of the covenant, the intent of the parties, and the law in
the State where the land is situated. Restrictive covenants that run
with the land are encumbrances and may affect the value and
marketability of title. Restrictive covenants may limit the density
of buildings per acre, regulate size, style or price range of
buildings to be erected, or prevent particular businesses from
operating or minority groups from owning or occupying homes in a
given area. (This latter discriminatory covenant is unconstitutional
and has been declared unenforceable by the U.S. Supreme Court.)
|
| Reverse Annuity
Mortgage (RAM) |
A form of mortgage in which
the lender makes periodic payments to the borrower using the
borrower's equity in the home as security. |
| Revolving Debt |
Debt that typically has a
variable interest rate, an open-ended term, and payments that are
based on a percentage of the balance. The debt has a set limit
agreed upon by the lender and borrower. |
| Risk Grade |
Assessment of a loan's
relative risk with respect to its probability of default. Risk Grade
Evaluation quantifies the risk by assigning a grade from RG1
(highest quality) to RG7 (lowest quality).
|
