Rate
In lending, the amount of interest on the loan expressed as an interest rate or annual percentage rate (APR) of the principal.

Rate Cap
Insurance Rate cap insurance limits how much the interest rate can increase during the float period (usually no more than .5%). For example, if you get the insurance when the rate is 7.5%, you will be guaranteed that the rate will not go above 8%. This protects you from uncertainty in the market and rising rates. With the insurance you will be told that you can lock-in a rate, usually within 60 days of closing. You can also lock if the rate goes lower.

Rate/Point Options
These options are all the combinations of interest rate and points that are offered on a particular loan. Usually you will find that paying more points lowers interest rates.

Real Estate Broker
A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.
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.

Rebate
An incentive paid by the manufacturer to the customer as a way to increase sales of products. For example, slow-selling vehicles or previous-year models still in the dealer's inventory may feature this type of incentive to sell faster than they have been. Typically a rebate can be applied to the cost of the vehicle or received in cash by the customer. Instead of the rebate, the buyer is often offered special dealer financing. Often, taking the rebate is the better deal.

Recision
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.

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

Refinancing
The process of the same mortgagor paying off one loan with the proceeds from another loan.
Regulation M The Federal Reserve Board's Consumer Leasing Act, which requires full disclosure of all leasing costs. It took effect Jan. 1, 1998.

Renegotiable Rate Mortgage (RRM)
A loan in which the interest rate is adjusted periodically. Sometimes referred to as Adjustable Rate Mortgage.

Repossession
Due to a default on or failure to pay the loan, the lender, or someone acting on the lender's behalf, takes possession of the vehicle.

Required Cash
Required cash is the total cash required for you to close the loan. This cash goes towards down payment, points, and other charges paid to the lender. It also goes towards up-front charges for things like mortgage insurance and other settlement charges associated with the transaction such as title insurance, taxes, etc. Your good faith estimate will show how much cash you need for closing.

Reserves
Verified liquid assets remaining after the borrower pays downpayment and closing costs.
Residential Mortgage Credit Report (RMCR) Detailed account of the credit, employment, and residence history, as well as public-record information, concerning an individual.

Residual Value
The amount mutually agreed upon between lessor and leasee to represent the value of the car at the end of a lease. This value is usually determined by the amount of depreciation in the car's value predicted during the term of the lease.

Restrictive Covenants
Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and binding only between the original seller and buyer. The determination whether a covenant runs with the land or is personal is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area. (This latter discriminatory covenant is unconstitutional and has been declared unenforceable by the U.S. Supreme Court.)

Retail Blue Book Value
The resale value of an auto that is identified in the Kelley Blue Book. It's the amount of money that is commonly charged for a similar used vehicle by a dealership or private seller. See also black book value.

Retail Price
The amount the buyer pays to the dealership. Distinguished from wholesale price.
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.

Revolving Debt
Debt that typically has a variable interest rate, an open-ended term, and payments that are based on a percentage of the balance. The debt has a set limit agreed upon by the lender and borrower.

Risk Grade
Assessment of a loan's relative risk with respect to its probability of default. Risk Grade Evaluation quantifies the risk by assigning a grade from RG1 (highest quality) to RG7 (lowest quality).

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