Glossary.
Plain-language meanings for the terms that come up when you split a house.
A
Appraisal
A written opinion of value from a licensed or certified appraiser. Review the report’s title and condition assumptions; it is not a title search or a guarantee against hidden defects.
Assumption
When one borrower takes over the existing loan, usually keeping its rate and terms. Not every loan allows it.
B
Borrower / co-borrower
The people who signed the promissory note and owe the lender.
BPO (broker price opinion)
A value estimate from a real estate agent, often ordered by a lender. Simpler than an appraisal.
C
CDFA (Certified Divorce Financial Analyst)
A financial professional who looks at the long-term money effects of a settlement.
Closing Disclosure
The final statement of your loan terms and closing costs.
CMA (comparative market analysis)
An agent's estimate of price, based on recent nearby sales.
Collaborative divorce
Both spouses and their attorneys agree to settle without going to court, often with a financial neutral and a coach.
Community property
In these states, most property and debt from the marriage is generally split equally. Includes Arizona, Idaho, and Washington.
D
Decree
The court's final order ending the marriage and dividing property and debt.
Deed
The document that shows who owns the home.
Deed of trust
The document that lets the lender use the house as security for the loan.
Discovery
The stage where both sides exchange financial records.
DTI (debt-to-income ratio)
Your monthly debt payments compared to your income. Lenders use it to decide how much you can borrow.
Due-on-sale clause
Loan language that lets a lender call the loan due if the house is transferred. Federal law limits this for transfers between spouses in a divorce.
E
Equitable distribution
In these states, property is divided fairly, which isn't always equally. Includes Oregon.
Equity
The home's value minus everything owed against it.
H
HELOC
A home equity line of credit. A credit line secured by your house that can be drawn on again unless it's frozen or closed.
L
Lien
A legal claim against the property for a debt.
LTV (loan-to-value)
The loan amount compared to the home's value. Lenders limit how much you can borrow against the house.
M
Marital balance sheet
A list of all assets and debts used to plan a fair split.
Mediator
A neutral person who helps both spouses reach agreement. Does not represent either one.
P
Payoff letter
The lender's exact amount needed to pay off the loan by a certain date.
Promissory note
The promise to repay the loan. It decides who owes the lender.
Q
QDRO (qualified domestic relations order)
A court order used to divide certain retirement accounts.
Quitclaim deed
Transfers whatever ownership interest the signer has, without guaranteeing title. It does not remove the signer from the loan.
R
Refinance
Replacing the current loan with a new one, sometimes to fund a buyout.
Release of liability
The lender's written agreement that a borrower no longer owes the loan.
S
Servicer
The company you send your mortgage payment to.
Settlement agreement
The written agreement dividing property and debt.
Soft / hard credit pull
A soft pull doesn't affect your score. A hard pull happens with a loan application and may lower it slightly.
T
Title search
A check of public records for ownership and recorded liens.
U
Underwriting
The lender's review of your income, credit, assets, and the property before approving a loan.
Bring any term you are unsure about to your attorney or mortgage professional before you sign.