← Glossary
Buying and selling
Homestead exemption
A program that lowers property taxes, and sometimes protects equity from creditors, on a primary residence. You often must apply, and rules vary by state.
Also called: homestead
Related terms
Property tax
A yearly tax set by local governments based on a property's assessed value. Lenders usually collect it monthly through escrow, and rates vary widely by location.
Primary residence
The home you live in most of the year. Loans, tax breaks, and insurance are often better for a primary residence than for a second home or rental.
Assessed value
The value a local tax assessor assigns to a property to calculate property taxes. It often differs from market value and is not a reliable guide to price.