This glossary is Alphabetical please choose your letter below.




A sum of money owed from one person or institution to another person or institution.


Debt Consolidation
Rolling short-term debt such as car loans and credit card debt into a home mortgage loan, either at the time of home purchase or later.


Debt Security
A security in which the issuing company generally agrees to repay the principal (typically, the original amount borrowed) and make interest payments according to an agreed schedule.


Debt-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her net effective income (FHA/VA) or gross monthly income (conventional). See Housing expenses-to-income ratio.


The legal document conveying title to a real property.


Deed in Lieu
To avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process doesn't allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.


Deed of Trust
In many states, this document is used in place of a mortgage to secure the payment of a note. It involves a third party, the trustee, who holds the deed to the property.


Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage. This can also mean failure to pay property taxes, maintain insurance on the property or even to maintain the interior and exterior of the property.


Deferred Interest
See Negative Amortization


Failure to make payments on time. This can lead to foreclosure. See default.


Demand Clause
A clause in the note that allows the lender to demand repayment at any time for any reason.


Deminimus PUD
A Planned Unit Development (PUD) in which the common property has less than a 2% influence upon the value of the premises. The 2% rule of thumb is calculated by dividing the dollar amount of amenities by the total number of units.


Department of Housing and Urban Development ( HUD )
A governmental entity responsible for the implementation and administration of housing and urban development programs. HUD was established by the Housing and Urban Development Act of 1965 to supersede the Housing and Home Finance Agency.


Department of Veterans Affairs ( VA )
A cabinet-level agency of the federal government. The Servicemen's Readjustment Act of 1944 authorized the agency to administer a variety of benefit programs designed to facilitate the adjustment of returning veterans to civilian life. Among the benefit programs is the VA Home Loan Guaranty program, which encourages mortgage lenders to offer long-term, no down payment financing to eligible veterans by partially guaranteeing the lender against loss upon foreclosure.


A sum of money given to bind a sale of real estate. Also known as earnest money or earnest deposit.


A loss of value in real property brought about by age, physical deterioration, functional or economic obsolescence.


A financial instrument which derives its value from an underlying security or notional amount.


Direct Lender
See lender


Information relevant to specific transactions that is required by law.


Discount Points
See Points.


Discount Rate
The interest rate a Federal Reserve Bank charges eligible financial institutions to borrow funds on a short-term basis. Unlike open market operations which interact with financial market forces to influence short-term interest rates, the discount rate is set by the boards of directors of the Federal Reserve Banks, and it is subject to approval by the Board of Governors.


Discretionary ARM
An adjustable rate mortgage on which the lender has the right to change the interest rate at any time subject only to advance notice. Not used in U.S.


Documentation Requirements
The set of lender requirements that specify how information about a loan applicant's income and assets must be provided, and how it will be used by the lender.


Down Payment
Money paid to make up the difference between the purchase price and the mortgage amount. Down payments usually are 10 to 20 percent of the sales price on a conventional loan. VA loans have no down payment but are only available to Veterans who have not used up their VA entitlement. FHA loans are often as low as 3% down payment. When the down payment is less than 20% the Lender will typically require PMI (Private Mortgage Insurance) on a conventional loan, or MIP (Mortgage Insurance Premium) on an FHA loan.


Dual Applicant
Also termed "dual apper", A dual applicant is a borrower who submits applications through two loan providers, usually mortgage brokers.


Dual Index Mortgage
A mortgage on which the interest rate is adjustable based on an interest rate index, and the monthly payment adjusts based on a wage and salary index.


Due-on-Sale Clause
A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.


The weighted-average life of the present value of all future cash flows, both principal and interest, of a security. It is used as a measure of the sensitivity of the value of a security to changes in interest rates.