HOMEBUYER EDUCATION GLOSSARY

Debt: A sum of money owed from one person or institution to another person or institution.

Debt-to-Income Ratio: The percentage of gross monthly income that goes toward paying for your monthly housing expense, installment debts, alimony, child support, car payments, and payments on revolving or open-ended accounts such as credit cards.

Deed: The legal documents conveying title to a property

Deed of Trust: A legal document in which the borrower conveys the title to a 3rd party (trustee) to hold as security for the lender. When the loan is paid in full the trustee reconveys the deed to the borrower. If the borrower defaults on the loan the trustee will sell the property and pay the lender the mortgage debt.

Default: Failure to perform a legal obligation; a default includes failure to pay on a financial obligation, but may also be a failure to perform some action or service that is nonmonetary.

Deposit: The amount of money you put down on a house to hold it.

Depreciation: A decline in the value of a house due to changing market conditions, decline of a neighborhood or lack of upkeep on a home.

Down Payment: A portion of the price of a home, usually between 3-20%, not borrowed and paid up front.