ExpertGlossary

These indexes are computed by the investment firm Morgan Stanley's Capital International group (MSCI).

They track stocks traded in international stock markets, and are considered the benchmarks for international stock investments and mutual fund portfolios.

The strong performance of the Europe and Australasia Far East Equity Index (EAFE) between 1982 and 1996 is often credited with generating increased US interest in investing overseas. The index was considered especially strong compared to the well-known Standard & Poor's 500-stock Index (S&P 500).

Morningstar, Inc., offers a broad range of investment information, research, and analysis online, in software products, and in print.

For example, the company rates open- and closed-end mutual funds and variable annuities, as well as other investment products, using a system of one to five stars, with five being the highest rating.

The Morningstar system is a risk-adjusted rating that brings performance, or return, and risk together into one evaluation.

In addition, Morningstar produces analytical reports on the funds and variable annuities it rates, as well as on stocks sold in US and international markets.

A mortgage, or more precisely a mortgage loan, is a long-term loan used to finance the purchase of real estate.

As the borrower, or mortgager, you repay the lender, or mortgagee, the loan principal plus interest, gradually building your equity in the property.

The interest may be calculated at either a fixed or variable rate, and the term of the loan is typically between 10 and 30 years.

While the mortgage is in force, you have the use of the property, but not the title to it. When the loan is repaid in full, the property is yours. But if you default, or fail to repay the loan, the mortgagee may exercise its lien on the property and take possession of it.

• First mortgage: A mortgage having priority over all other voluntary liens against the property. A first mortgage gives the lender a first claim against the owner's rights in the property if the owner fails to meet the required payments on the mortgage.
• Second mortgage: A junior mortgage that ranks after a first mortgage in priority. Properties may have two, three, or more mortgages, deeds of trust, or land contracts, as liens at the same time. Legal priority would determine whether they are called a first, second, third, etc. lien.
• Deed of trust: An instrument used in many states in place of a mortgage. The difference between a mortgage and a deed of trust is that a deed of trust involves a third party, known as the trustee, who has technical title to the property. Trust deeds, trusts, mortgage bonds, and vendor's liens are similar terms used in various parts of the country.
• Contract to purchase: An arrangement for the sale of real estate whereby the buyer may use, occupy, and enjoy land, but no deed is given by the seller (and no title passes) until all or a specified part of the sale price has been paid. A purchaser who is buying the property by means of a contract to purchase may not consider himself/herself to be the owner since the seller actually has the title. However, for this survey, the purchaser is considered to be the owner. Contract for deed, land contract, purchase agreement, agreement of sale, and assumption agreement are similar terms used frequently in some areas of the country.
• Home equity line of credit: Allows the property owner to borrow against the equity in the home from time to time without reapplying for a loan.