Rate Cap
The maximum interest rate charge allowed on the monthly payment of an adjustable rate mortgage during an adjustment period.

Rate-Improvement Mortgage
A loan with a clause that entitles a borrower to a one-time interest rate cut without going through refinancing.

Real Estate Owned (REO)
Property acquired by a lender through foreclosure and held in inventory.

Real Property
The rights to use real estate.

Recourse Loan
The ability of lender to make claims against borrower personally in addition to the collateral.

Redemption Period
Period during which a former owner can reclaim foreclosed property.

Process of a borrower paying off one loan with the proceeds from another.

The principle that the value of a better-quality property is adversely affected by the proximity of a lesser-quality property.

Regulation Z
Federal regulation requiring creditors to provide full disclosure of the terms of a loan.

Residential Service Contract
Home warranty or insurance contract, generally for one year, covering plumbing, electrical, and mechanical systems of the home.

Value or income remaining after deducting an amount necessary to meet fixed obligations.

Reverse Mortgage
A type of mortgage designed for elderly homeowners with substantial equity by which a lender pays a periodic payment to the borrower; the loan balances increase with interest and payments causing negative amortization.

Right of First Refusal
Opportunity of a party to match the terms of a proposed contract before the contract is executed.