Underwater (or Upside Down)
When you owe more on your mortgage than your home is worth.

Delinquent
Your mortgage is considered delinquent the moment you miss a payment—even by a day.

Default
After a few missed payments (typically 90+ days), your loan may be considered in default, which often triggers foreclosure proceedings.

Foreclosure
The legal process your lender uses to take back your home after prolonged missed payments. You lose ownership, your credit takes a major hit, and any equity you had may be wiped out.

Loan Modification
A formal agreement with your lender to adjust your mortgage terms to make it more affordable (often a temporary fix).

Short Sale
Selling your home for less than what you owe—requires lender approval, but it avoids foreclosure.

Deferred Maintenance
Repairs or upkeep that have been delayed—think leaky roofs, old furnaces, or peeling paint. Over time, these issues often cost more to fix.

Major Systems
Refers to the home’s core components: roof, HVAC, plumbing, electrical. If any of these fail, you’re looking at a pricey repair bill.

Full Gut Rehab
Taking a home down to the studs—new plumbing, electrical, drywall, flooring, kitchen, bath, etc. Usually required when a home has severe damage or hasn’t been updated in decades.

As-Is Condition
Selling the property in its current state, with no repairs made by the seller. Common in distressed or cash-offer transactions.

Closing Costs
Fees paid at the end of a real estate transaction—can include title fees, transfer taxes, agent commissions, escrow charges, and more. Usually around 2–5% of the home’s price.

Title Company
A third party that handles the paperwork, ensures ownership is transferred legally, and issues title insurance to protect buyers.

Novation Agreement
A creative strategy where a buyer (like an investor) steps in, renovates the property, finds a new buyer, and pays off the original mortgage—all without the homeowner needing to bring cash to the table.

Earnest Money
A good-faith deposit from the buyer to show they’re serious. It’s typically held in escrow until closing.

Property Taxes
Local taxes based on your home’s value. If you’re behind, these can add liens to your property and complicate a sale.

Utility Liens
Unpaid gas, water, or electric bills that can become public records—and follow the property, not the person.

Special Assessments
Charges from the city or HOA for improvements like sidewalks, sewers, or street lights. These can show up suddenly and become the seller’s responsibility.

Equity
The difference between what your home is worth and what you still owe. Equity is your financial cushion—and foreclosure can erase it overnight.

If you’re behind on your mortgage, facing foreclosure, or dealing with a house that needs major work, understanding these terms helps you make smarter decisions—and act before it’s too late.

Time is always working against you in these situations. But the more informed you are, the better chance you have of protecting your equity, avoiding unnecessary fees, and selling your home on your terms.

Need to get out from under your upside down mortgage, need to sell an inherited home or have a house that just need too many repairs… don’t worry, Hotdoors is here to help!