Mortgage Glossary - R

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Rate Float - Assuming market risk on an interest rate in the hopes that it will go lower prior to closing.

Rate Lock - Choosing to have no change to a rate for a specific length of time.

Ratios - How a buyers housing expense and debt picture relates to their income.

Real Estate Settlement Procedures Act (RESPA) - RESPA is a federal law that allows consumers to review information on known or estimated settlement costs once after application and once prior to or at settlement. The law requires lenders to furnish information after application only.

Realtor - A real estate broker or an associate holding active membership in a local real estate board affiliated with the National Association of Realtors.

Rescission - The cancellation of a contract. With respect to mortgage refinancing, the law that gives the homeowner three days to cancel a contract in some cases once it is signed if the transaction uses equity in the home as security.

Recon / Reconveyance - A release of lien filed with the county recorder by the trustee.

Recording Fees - Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.

REFI - Slang for refinance, or a new mortgage on a property that does not change ownership.

Rehab / Renovation Loans - Rehab or Renovation Mortgage is a cost-effective and convenient way to combine home purchase or refinance with the cost of renovating or repairing your home in one loan with one closing. What's the benefit? Instead of financing the renovation with a second mortgage or home equity loan, you get the lower interest rates of a first mortgage and only have to pay for one mortgage closing. And with a HomeStyle Renovation Mortgage, you can borrow an amount based on the value of the home after the renovations are finished, so you know you will have the funds available to do the job right.

Key Features:

• You can select from a fixed-rate mortgage with a term of 15 to 30 years, or a 30-year adjustable rate mortgage (ARM) that has annual rate adjustments after the 3rd, 5th, 7th, or 10th year. Whichever term you choose, you have just one set of closing costs and can lock in the interest rates on the renovation and the permanent mortgage at the same time.

• The borrowed money can cover any renovations you want or need, as long as they are permanently part of the property and add value to it. Other costs related to a renovation are also covered. For example, you can even finance the rent on another home or apartment to live in while the renovations take place!

• For home purchases, the loan amount can be based on the costs of the renovation project or on the "as-completed" value of the home after the renovations are finished. That means you can borrow more than the home's current value, knowing its value will increase after the improvements are finished.

Request for Reconveyance - Verification given by the beneficiary to the trustee that the conditions of the lien have been fulfilled and request that the lien be canceled.

Reverse Annuity Mortgage (RAM) - A form of mortgage in which the lender makes periodic payments to the borrower using the borrower's equity in the home as security.

Right to Rescission
The legal right to void or cancel your mortgage contract in such a way as to treat the contract as if it never existed. Right of rescission is not applicable to mortgages made to purchase a home, but may be applicable to other mortgages such as home equity loans.