The Learning Center

Glossary

Debit

In a closing statement or settlement, an item that is charged to a buyer or seller. Compare with credit.

Debt

An obligation to pay another.

Debt Consolidation

Refinancing a property or obtaining a home equity loan to obtain funds that are used to pay off other debts.

Deed

The written instrument that conveys a property from the seller to the buyer. The deed is recorded at the local courthouse so that the transfer of ownership is part of the public record.

Deed of Trust

This document, referred to as a mortgage in some states, pledges a property to a lender or trustee as security for the repayment of a debt.

Deed Stamp

A tax that is required in some municipalities if a property changes hands. The amount of this tax can vary with each state, city and county.

Deed-in-lieu

A process that allows a borrower to transfer the ownership of a property to the lender in order to avoid loss of the property through foreclosure.

Default

A breech of the agreement with a lender such as the failure to make loan payments in a timely manner.

Delinquency

The failure to make payments on debts when they are due.

Delivery Fee

A fee charged generally by the title company or attorney for the delivery of documents to your lender.

Department of Veterans Affairs (VA)

An agency of the federal government that provides services and guarantees residential mortgages made to eligible veterans of the military services.

Deposit

Funds required by a lender in advance of the processing of a loan request. Generally a deposit is collected to cover the costs of an appraisal and credit report and may or may not be refundable.

Depreciation

A decline in the value of real or personal property. The opposite of appreciation.

Desktop Underwriter

A computer system supported by Fannie Mae that evaluates characteristics of loan applications, such as the borrowers financial and credit history, as well as information about the property to assist in determining if the application should be approved. Generally this process can occur within seconds.

Devise

A gift of real property by will or last testament.

Disburse

To pay out on the loan.

Disclosures

Information, typically required by state or federal law, that must be given to consumers in connection with a financial transaction.

Discount Points

Fees that are collected by the lender in exchange for a lower interest rate. Each discount point is 1% of the loan amount. Sometimes referred to as "points".

Discount Rate

The interest rate that the Federal Reserve charges member banks for loans, using government securities or eligible paper as collateral. This provides a floor on interest rates, since banks set their loan rates a notch above the discount rate.

Document Preparation Fee

Lenders will prepare some of the legal documents that you will be signing at the time of closing, such as the mortgage, note, and truth-in-lending statement. This fee is charged by some lenders and covers the expenses associated with the preparation of these documents.

Documentary Stamp

A tax levied by some local or state governments at the time the deeds and mortgages are entered into public record.

Dower

A widow's portion of her husband's assets that were acquired during the course of their marriage. The dower, usually amounting to one third, applies even if the deceased husband wills her a portion less than this.

Down Payment

The portion of the purchase price of a property that the borrower will be paying in cash rather than included in the mortgage amount.

Draw Period

Generally associated with home equity lines of credit, the draw period is the period of time that you can access funds from the line. After the draw period expires, a repayment period generally follows.

Due-on-sale Clause

A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the loan.