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Glossary of Mortgage and Home Equity Terms

To navigate through our glossary, click on the first letter of the word you’re looking for.
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Sales Contract
See Purchase Contract.
Satisfaction of Mortgage
The document issued by the lender verifying full payment of a mortgage debt.
Second Home (Vacation Home, Weekend Home)
A residence other than the borrower's primary residence which the borrower intends to occupy for a portion of each year. The residence must be occupiable year-round.
Second Mortgage
A mortgage that has rights that are subordinate to the rights of the first mortgage holder. Home equity loans are often referred to as second mortgages because the borrower typically is still paying off their home mortgage; if the home mortgage is paid off, the home equity loan is then considered to be a first mortgage.
Secondary Mortgage Market
A market where existing mortgages are bought and sold. It contrasts with the primary mortgage market, where mortgages are originated.
Section 203(k) Loan Program
HUD's primary program for the rehabilitation and repair of single-family properties. A 203(k) loan is a first mortgage that covers the costs of rehabilitation and purchase or refinance of an eligible property. The goals of the Section 203(k) loan program are community and neighborhood revitalization and expanded opportunities for homeownership for low- and moderate-income families.
Collateral or property given, deposited, or pledged to secure the repayment of a loan.
Security Instrument
Mortgage or Deed of Trust evidencing the pledge of real estate as collateral for the loan.
Security Interest
The interest of a creditor in the security acting as collateral for an investment.
Seller Contributions
Payment by the seller or any other interested party of some or all of the purchaser's usual closing costs. Investors and insurers sometimes limit the amount of seller contributions and require lenders to adjust the property's value if contributions exceed limitations. Undisclosed seller contributions (such as decorating allowances, appliances, or payment of moving expenses) are made to borrowers outside of closing and are also subject to investor and insurer restrictions.
Servicing Released
A stipulation in the agreement for the sale of mortgages in which the seller is not responsible for loan administration.
See Closing.
Settlement Costs
Money paid by borrowers and sellers to effect the closing of a mortgage loan, including payments for title insurance, survey, attorney fees, and such prepaid items as escrow for taxes and insurance.
Settlement Services
Services provided by the lender at the closing of a loan.
Settlement Sheet
The computation of costs payable at closing that determines the seller's net proceeds and the buyer's net payment.
Settlement Statement (HUD-1)
A form used at closing that gives an account of the funds received and paid at the closing, including the escrow deposits for taxes, hazard insurance, and mortgage insurance.
Site Value
The value of land without improvements, as if vacant.
Improved or unimproved land divided into a number of parcels for sale, lease, financing, or development.
To make subject or junior to. For example, a loan on vacant land is made subject to a subsequent construction loan. Also described as a Second Mortgage. See First Mortgage.
The measurement and description of land by a registered surveyor.
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