FHA Loan and Mortgage Glossary - Terms Beginning with 'R'
- Radon: This is a gas that is found in some homes and may cause health problems for the occupants. This is tested for in the home before a sale can be completed.
- Rate: The annual interest rate on a mortgage loan.
- Rate Cap: The maximum interest rate that can be charged on a mortgage loan.
- Rate Lock-in: An agreement between a lender and a borrower for a specific interest rate as long as the loan closes within a certain amount of time.
- Real Estate Agent: This is a professional who helps buyers find a home they want, negotiate the offer for the price of the home, and finalize the details of the sale. For sellers they help with the same process, but the sellers of the home pay a commission for this service.
- Real Estate Settlement Procedures Act: Also known as RESPA. This is the law that protects consumers from predatory lending practices. It requires lenders to disclose a good faith estimate of the mortgage loan so that the borrower will know the terms and interest rate of the loan from the beginning.
- Recording fees: These are fees that are paid by the borrower so that the new record of ownership and title are recorded by the county in which the property is located.
- Rehabilitation Mortgage: This is a mortgage loan that allows for part of the loan to be used to fix the home.
- Refinancing: This is when a current mortgage loan holder gets a new mortgage loan to replace their existing loan. Borrowers want to refinance when their current loan conditions are not as favorable as they can get with a new loan, or if they need to take cash out of the equity in their home.
- Rescission: TThis is when a contract is cancelled by the borrower when they change their mind about taking the mortgage loan. According to law, borrowers get a 3 day cooling off period after they sign closing paperwork in order to change their mind.
- Reverse Mortgage: This is a mortgage loan that is for senior citizens who already own their home or only owe a little. This type of mortgage gives money out of the equity of the home to the homeowners and in exchange this principal loan plus interest is paid back to the lender once the owner moves out of the home, or the property is sold.