F

Fee Simple - The highest and best form of ownership recognized by law. Owner is entitled to the entire property with unconditional power to sell it.

First Mortgage - A real estate loan that creates a primary lien against real property.

Fixtures - Improvements or personal property so attached to the land as to become part of the real estate. For example, a porch would be considered a fixture, whereas a ceiling fan may just be personal property.

Foreclosure - A termination of all rights of a mortgagor in the property covered by a Mortgage. Statutory foreclosure is effected without recourse to courts but must conform to applicable laws.

Forfeiture - The loss of money or anything else of value because of failure to perform under contract. For example, because the prospective Purchaser failed to keep up payments under the land contract, he or she forfeited all of his or her rights to the property.

Free and Clear Title - Title to a property without encumbrances. It is generally used to refer to a property free of mortgage debt.

G

Grace Period - The period during which one party may fail to perform without being considered in default.

Grantee - The person to whom an interest in property is conveyed. For example, in a land contract sale the Grantee is most often referred to as the Purchaser.

Grantor - The person conveying an interest in property. For example, in a land contract sale the Grantor is most often referred to as the Seller.

Guaranty - A written promise by one party to pay a debt or perform an obligation contracted by another in the event that the original obliger fails to pay or perform as contracted. For example, a parent may guarantee payments owed by a son or daughter.

H

Hazard Insurance - A type of insurance bought to insure property against losses due to fire, theft, vandalism, etc. Most land contracts require the Purchaser to carry hazard insurance at all times to protect the Seller from insurable losses.

Heir - One who inherits property.

Hereditaments - Any property, whether real or personal, tangible or intangible, that may be inherited.

Homeowner's Policy - An insurance policy designed especially for homeowners. Usually protects an owner from losses by common disasters, theft, etc.

I

Improvements - Those additions to undeveloped land such as buildings, streets, sewers, etc., that tend to increase its value.

Installments - Parts of the same debt, payable at successive periods as agreed; payments made to reduce a mortgage.

Insurance Premium - The amount paid for the purchase of insurance.

Interest Rate - The percentage of money charged for its use. For example, a Seller may charge a Purchaser 10% interest on the unpaid balance of a mortgage, trust deed or land contract.

J

Judgment - A decree of a court stating that one individual is indebted to another for a certain fixed amount.

Judgment Lien - A lien upon the property of a debtor resulting from the decree of a court

Judicial Foreclosure - Having a defaulted debtor's property sol at a price the court approves.

L

Land Contract - A real estate installment sale arrangement whereby the buyer may use, occupy, and enjoy land, but no deed given by the Seller (so no title passes) until all or a specified part of the sale price has been paid.

Late Charge - An additional fee charged to a person for a payment that is delinquent. The most common methods of charging late fees are to charge a fixed dollar amount or a percentage of the payment.

Lease - A contract in which, for a payment called rent, the one entitled to the possession of real property transfers those right to another for a specified period.

Legal Description - A property description recognized by law which is sufficient to locate and identify the property. A typical legal description will identify the county, township, and septic of the township where the land is located.

Legatee - One who receives property by a will.

Lessee - One who receives property by a lease. Lessor - One who leases property to a lessee.

Liability - A debt or financial obligation.

Liable - Responsible or obligated. For example, one who borrowed on a mortgage generally becomes personally liable for i repayment.

Lien - A charge against property making it security for the payment of a debt, judgment, mortgage or taxes. A lien is a type of' encumbrance. A specified lien is against certain property only. General lien is against all of the property owned by the debtor.