Reference
Glossary
- Home equity
- The market value of a property minus all debts secured against it; the share the owner holds outright.
- Appreciation
- An increase in a property’s market value over time, which raises equity without any payment.
- Principal
- The portion of a loan balance that is the borrowed amount itself, as distinct from interest.
- Loan-to-value (LTV)
- The ratio of a loan balance to the property’s value, expressed as a percentage.
- Combined loan-to-value (CLTV)
- The same ratio counting all loans secured by the property, used to cap total borrowing.
- Cash-out refinance
- Replacing a mortgage with a larger one and taking the difference as cash.
- Home equity loan
- A fixed-rate second loan paid as a lump sum, sitting behind the first mortgage.
- HELOC
- A home equity line of credit: a revolving, usually variable-rate line drawn on as needed.
- As-is sale
- A sale in which the seller makes no repairs; the buyer accepts current condition.
- Appraisal
- A licensed professional’s opinion of market value, relied on by lenders.
- Lien
- A legal claim against a property securing a debt, which must be cleared at sale.
- Net proceeds
- The cash a seller actually receives after paying off loans and transaction costs.