The Land Buyer's Glossary of Terms

Adjustable Rate Mortgage: a broad term for a mortgage with rate and terms that can change. The "ARM" has become commonplace, with allowable ranges as to time intervals, percentage of increase or decrease, and total increases or decreases likely to change as market conditions change.

Amortization Schedule: a schedule that shows how much principal and interest are due at specific intervals and the unpaid balance of the mortgage after each payment.

Broker: one who acts as an intermediary between parties at a transaction.

Easement: a non-possessory property interest that one person has in land owned by another, entitling the holder of the interest to limited use or enjoyment of the other's land.

Earnest Money: the cash deposit -- including initial and additional deposits -- paid by the prospective buyer or real property as evidence of good-faith intention to complete the transaction.

Encumbrance: something that affects or limits title to a property, such as restrictions, mortgages, leases, etc.

Escrow: provides that a third party, acting for both buyer and seller, handles disbursement of funds for specific purposes.

Grantee: the person who receives a conveyance of real property from a grantor.

Grantor: the person transferring title, or an interest in real property, to a grantee.

Improved land: land with roads, utilities and structures, as opposed to 'raw land,' which has no physical improvements.

Lien: a claim by one person or institution on the property of another as security for a debt.

Mill: one-tenth of one cent. Some states use a mill rate to compute property taxes and sales taxes.

Origination Fee: a fee charged by a lender to prepare loan documents, make credit checks, inspect and/or appraise a piece of real estate. Generally, the fee constitutes a percentage of the face value of the loan.

Plat Map: a map of a town, section or subdivision indicating the location and boundaries of individual properties.

Prorate: to divide or distribute proportionately. With the exception of principal payments on a mortgage, most real estate expenses such as rent, insurance (which is frequently prepaid for several years of coverage) and the like are paid in advance.

Quit Claim Deed: a deed of conveyance that operates, in effect, as a release of whatever interest the grantor has in the property, sometimes called a 'release deed.'

Survey: the process by which boundaries are measured and land areas determined; the on-site measurement of lot lines, dimensions and positions of houses in a lot, including the determination of any existing encroachments, easements and compliance with setback requirements.

Title: documentary evidence of ownership, detailing the history of property ownership and transfers. Title can be bought, inherited, or obtained via foreclosure of a mortgage.

Title Insurance: a comprehensive indemnity contract under which a title insurance company warrants to make good any loss arising through defects in title to real estate, or any liens or encumbrances upon the property.

Variable Rate Mortgage: see "Adjustable Rate Mortgage" above.

Warranty Deed: a deed in which the grantor fully warrants good clear title to the premises; also called a General Warranty Deed.

Waterfront Property: real estate abutting on a body of water such as a canal, lake, river or ocean.