RATE REDUCTION OPTION

A fixed-rate mortgage that includes a provision that gives the borrower an option to reduce the interest rate (without refinancing) at a later date. It is similar to a prearranged refinancing agreement, except that it does not require re-qualifying.

RATE LOCK

A commitment issued by a lender to a borrower guaranteeing a specified interest rate for a specified period of time. See lock-in.

REAL ESTATE AGENT

A person who is normally licensed by the state and who, for a commission or a fee, assists in negotiating a real estate transaction.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA )

A consumer protection law that, among other things, requires advance disclosure of settlement costs to home buyers and sellers, prohibits certain types of referral and other fees, sets rules for escrow accounts, and requires notice to borrowers when servicing of a home loan is transferred.

REAL PROPERTY

Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.

REALTOR ®

A real estate broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.

RECORDED PLAT

A subdivision map filed with the county recorder's office that shows the location and boundaries (lot and block number) of individual parcels of land.

RECORDING

The act of entering in the public records, the written record of title to real property, thereby giving constructive notice to the public

REDUCED DOCUMENTATION

A method used to determine income when qualifying a borrower(s) for a loan. Borrower(s) provide their income, however no verification documentation is typically required.

RESCISSION

The act of cancellation or annulment of a transaction or contract by the operation of a law. Borrowers usually have the option to cancel certain credit transactions, including a refinance or home equity transaction, within three business days after consummation (when the consumer becomes contractually obligated by, for example, signing the loan documents).

RECORDER

The public official who keeps records of transactions that affect real property in the area. Sometimes known as a "Registrar of Deeds" or " County Clerk ."

RECORDING

The noting in a book of public record of the terms of a legal document affecting title to real property, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage.

REFINANCE TRANSACTION

The process of paying off one loan with the proceeds from a new loan, typically using the same property as security for the new loan.

REHABILITATION MORTGAGE

A mortgage created to cover the costs of repairing, improving, and sometimes acquiring an existing property.

RELEASE

To relinquish an interest or claim to a piece of property .

REMAINING BALANCE

The amount of principal that has not yet been repaid. See Principal Balance .

REMAINING TERM

The original amortization term minus the number of payments that have been applied.

RENT WITH OPTION TO BUY

See lease-purchase mortgage loan.

REPAYMENT PLAN

An arrangement made to repay delinquent installments or advances. Lenders' formal repayment plans are often called "relief provisions."

REVOLVING LIABILITY

A credit arrangement, such as a credit card or HELOC, that allows a customer to borrow against a predetermined line of credit when purchasing goods and services. The borrower makes payments on the amount that is actually borrowed plus any interest due.

REQUEST FOR NOTICE OF DEFAULT

A recorded document that obligates the holder of the first mortgage lien to notify subordinate lien holders in the event of default by the borrower.

RESPA

Real Estate Settlement Procedures Act is a federal law which deals with the procedures to be followed in a real estate closing, and is intended to make borrowers more knowledgeable about possible costs and charges.

RIGHT OF FIRST REFUSAL

A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.

RIGHT OF INGRESS OR EGRESS

The right to enter or leave designated premises.

RIGHT OF SURVIVORSHIP

In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.

RURAL HOUSING SERVICE (RHS )

An agency within the Department of Agriculture. This agency provides financing to farmers and other qualified borrowers buying property in rural areas who are unable to obtain loans elsewhere. Funds are borrowed from the U.S. Treasury.