Mortgage Glossary

Debt

An amount owed to another.

Debt-to-Income Ratio

The relationship between a borrower's total monthly debt payments (including proposed housing expenses) and his or her gross monthly income; this calculation is used in determining the mortgage amount that a borrower qualifies for.

Deed

The legal document conveying title to a property (i.e., transferring the ownership of real property from one party to another.)

Deed-in-Lieu of Foreclosure

The transfer of title from a borrower to the lender to satisfy the mortgage debt and avoid foreclosure. Also called a "voluntary conveyance."

Deed of Trust

A legal document that conveys title to real estate to a disinterested third party (a "trustee") who holds the title until the borrower has repaid the debt. In some states, this document is used in place of a mortgage.

Default

The failure to make a scheduled payment or otherwise comply with the terms of a mortgage loan or other contract.

Delinquency

Failure to make a payment when it is due. The condition of a loan when a scheduled payment has not been received by the due date, but generally used to refer to a loan for which payment is 30 or more days past due.

Discount Point

A fee paid by the borrower at closing to reduce the interest rate. A point equals 1 percent of the loan amount.

Down Payment

The amount of cash a buyer puts toward a purchase.

Due-on-sale Clause

A provision in a mortgage that allows the lender to demand repayment in full of the outstanding balance if the property securing the mortgage is sold.