| 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). |
