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Rate adjustment periods: With
most ARMs, any periodic adjustment in the interest rate changes the payment.
Adjustment periods tend to reflect the period of the index of the most
popular ARMs; currently, annual adjustments are the most common. You should
know the CAP on an adjustable rate loan.
Rate Lock: When
interest rates are volatile, many borrowers want to "lock in" an
interest rate and many lenders will oblige, setting a limit on the amount of
time the guaranteed interest rate is in effect.
Real Estate Settlement
Procedures Act (RESPA): Federal law designed to make sellers and buyers
aware of settlement fees and other related costs to their mortgage. Read
more on RESPA
Raw land: Unimproved land that remains in its natural state.
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Real property: Land, and generally whatever is erected or affixed to
the land that would be personal property if not attached
Recourse: The right of a lender, in the event of default by the
borrower, to recover against the personal assets of a party who is
secondarily liable for the debt.
Regulation Z (Reg - Z): The
federal code issued under the Truth-in-Lending Act which requires that a
borrower be advised in writing of all costs associated with the credit
portion of a financial transaction.
Rehab: Extensive renovation intended to cure obsolescence of a
building or project.
REIT (Real estate investment trust): A business trust or corporation
that combines the capital of many investors to acquire or provide financing
for real estate. A corporation or trust that qualifies for REIT status
generally does not pay corporate income tax to the IRS. Instead, it pays out
at least 90 percent of its taxable income in the form of dividends.
Renewal option: A clause giving a tenant the right to extend the term
of a lease
Rent: Compensation or fee paid for the occupancy and use of any
rental property, land, buildings, equipment, etc.
Rent commencement date: The date on which a tenant begins paying rent
Rental concession: What landlords offer tenants to secure their
tenancy. IT is a credit or reduction in rent. May be temporary or permanent.
Reverse Mortgage: Loan
available to equity-rich, older owners. Repayment is not necessary until the
borrower sells the property or moves into a retirement community.
Replacement cost: The estimated current cost to construct a building
with utility equivalent to the building being appraised, using modern
materials and current standards, design and layout
Resolution Trust Corp. (RTC): The RTC was established by Congress in
1989 to contain, manage and sell failed savings institutions and recover
taxpayer funds through the management and sale of the institutions' assets.
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