Rate Caps
For an adjustable-rate mortgage loan, the maximum interest rate that may be charged, either at the time of each adjustment date or over the life of the loan.
Rate Lock
An agreement in which a lender “locks in” or guarantees an interest rate for a specified period of time prior to closing.
• See also “Lock-in”
Real Estate Settlement Procedures Act (RESPA)
A federal law that requires lenders to provide home mortgage borrowers with information about transaction-related costs prior to settlement, as well as information during the life of the loan regarding servicing and escrow accounts. RESPA also prohibits kickbacks and unearned fees in the mortgage loan business.
Real Property
Land and anything permanently affixed thereto — including buildings, fences, trees, and minerals.
Recorder
The public official who keeps records of transactions that affect real property in the area. Sometimes known as a “Registrar of Deeds” or “County Clerk.”
Recording
The filing of a lien or other legal documents in the appropriate public record.
Refinance Transaction
The process of paying off one loan with the proceeds from a new loan using the same property as security.
Rehabilitation Mortgage
A mortgage loan made to cover the costs of repairing, improving, and sometimes acquiring an existing property.
Remaining Term
The original number of payments due on the loan minus the number of payments that have been applied.
Repayment Plan
An arrangement by which a borrower agrees to make additional payments to pay down past due amounts while still making regularly scheduled payments.
Rescission
The cancellation or annulment of a transaction or contract by operation of law or by mutual consent. Borrowers may have a right to cancel certain mortgage refinance transactions within three business days after closing, or for up to three years in certain instances.
Revolving Debt
Credit that is extended by a creditor under a plan in which (1) the creditor contemplates repeated transactions; (2) the creditor may impose a finance charge from time to time on an outstanding unpaid balance; and (3) the amount of credit that may be extended to the consumer during the term of the plan is generally made available to the extent that any outstanding balance is repaid.
Right of First Refusal
A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
Rural Housing Service (RHS)
An agency within the U.S. Department of Agriculture (USDA), which operates a range of programs to help rural communities and individuals by providing loan and grants for housing and community facilities. The agency also works with private lenders to guarantee loans for the purchase or construction of single-family housing.