Debt-to-Income Ratio (DIR)
Used as one of the primary considerations for a loan approval, a borrower's debt-to-income ratio is expressed as a percentage of the total amount of monthly payment obligations for secured and unsecured debt compared to total gross monthly income. The ratio of debt to income is 50% or less in order to qualify for a loan in most circumstances.

Deed
A written document by which title to real property is transferred from one owner to another. The deed should contain an accurate description of the property being conveyed, should be signed and witnessed according to the laws of the State where the property is located, and should be delivered to the buyer at closing.

Deed of Trust
An instrument used in many states (including California) in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary) and re conveyed upon payment in full.

Deed Restriction
A clause in a deed that limits the use of land. Example: A deed might require that a road cannot be built on the land.

Default
Failure to make the mortgage payment within a specified period of time. For first mortgages or first trust deeds, if a payment has still not been made within 30 days of the due date, the loan is considered to be in default.

Defective Title
Any recorded instrument that would prevent a grantor/seller from giving a clear title. Example: The seller has a lien on the property that was filed when he failed to pay a contractor for work performed. The seller may obtain clear title by paying the contractor and removing the lien.

Deficiency Judgment
Personal claim against the debtor when the sale of foreclosed property does not yield sufficient proceeds to pay off the mortgages, accrued interest, legal fees, etc.

Delinquency
A loan payment that is overdue but within the period allowed before actual default is declared.

Deposit
A sum of money given to bind a sale of real estate. Also known as earnest money.

Depreciation
A loss of value in real property brought about by age, physical deterioration, functional or economic obsolescence.

Discount Point
Fees paid to a lender to reduce the interest rate. One point is equal to one percent of the loan amount.

Discounted Loan
When the note rate on a loan is less than the market rate, the lender requires additional points to raise the yield on the loan to the market rate.

Documentary Tax Stamp
Stamp affixed to a deed showing the amount of transfer tax.

Down Payment
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

Dragnet Clause
A provision in a mortgage that pledges other properties as collateral. A default in the mortgage could lead to foreclosure proceedings on any of the properties in the dragnet.

Due-On-Sale Provision
A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.