Debt-to-income ratio
The ratio, expressed as a percentage, that results when a borrower’s monthly payment obligation on long-term debts is divided by monthly income.

Deed
A legal document that transfers a property from one owner to another. The deed contains a description of the property, and is signed, witnessed and delivered to the buyer at closing.

Deed of trust
Agreement to pledge property as security for a loan, used in many states in place of a mortgage. In this arrangement, the borrower transfers legal title to a trustee who holds the property in trust as security for the repayment of the debt. The deed of trust becomes void if the debt is repaid, but if the borrower defaults on the loan, the trustee may sell the property to pay the debt.

Default
Failure to meet legal obligations in a contract, including failure to make payments on a loan. A mortgage is generally considered to be in default when a payment is 30 or more days past due.

Deferred interest
Interest added to the balance of a loan when monthly payments are not sufficient to cover it. (See Negative amortization.)

Delinquency
Failure to make payments on time.

Deposit
Cash paid when a formal sales contract is signed. The deposit is usually held by a third party until the sale is complete.

Depreciation
When the value of property declines.

Discount points (or Points)
Money paid to a lender at closing in exchange for lower interest rates. Each point is equal to 1 percent of the loan amount.

Documentary stamps
A state tax, in the forms of stamps, required on deeds and mortgages when a real estate title passes from one owner to another.

Down payment
Money paid for a house from one’s own funds at closing. The down payment will be the difference between the purchase price and mortgage amount.

Due-on-sale clause
Provision in a mortgage or deed of trust allowing the lender to demand immediate payment of the loan balance upon sale of the property.