- ABSTRACT
-
The
notes made by a title examiner based on his examination of the land
records. These notes are a concise summary of the transactions
affecting the property. The title agency produces a BINDER
from the information in the abstract.
- ACCELERATION
CLAUSE
-
A
condition in a real estate financing instrument giving the lender
the power to declare all sums owing lender immediately due and
payable upon the happening of an event, such as the sale of the
property, or a delinquency in the repayment of the note.
- ACCRETION
-
The
buildup of land from natural forces such as wind or water.
- ACKNOWLEDGEMENT
-
As
a verb, the confirmation by a party executing a legal document that
this is his signature and voluntary act. This confirmation is made
to an authorized officer of the Court or notary public who signs a
statement also called an acknowledgment.
- ACRE
-
43,560
square feet of land.
- Adjustment
interval
-
On
an adjustable rate mortgage, the time between changes in the
interest rate and/or monthly payment, typically one, three or five
years, depending on the index.
- ADMINISTRATOR
-
A
person appointed by the Court to settle the estate of a person who
dies without a will. The feminine form is Administratrix. Compare, EXECUTOR.
- ADVERSE
POSSESSION
-
A
claim made against land titled in another person based on open,
notorious and hostile possession and use of the land to the
exclusion of the titled owner.
- AGENCY
-
A
relationship in which the agent is given the authority to act on
behalf of another person (Principal).
- AGREEMENT
-
A
meeting of minds.
-
A
change to the correct or alteration to the original
document/agreement without changing its principal essence.
- AMORTIZED
LOAN
-
A
loan to be repaid, interest and principal, by a series of regular
payments that are equal or nearly equal, without any special balloon
payment prior to maturity.
- AMORTIZATION
-
The
periodic principal pay down of a loan.
- ANNUAL
PERCENTAGE RATE (A.P.R.)
-
Is
a interest rate reflecting the cost of a mortgage as a yearly rate.
This rate is likely to be higher than the stated note rate or
advertised rate on the mortgage, because it takes into account point
and other credit cost. the APR allows home buyers to compare
different types of mortgages based on the annual cost for each loan.
- APPRAISAL
-
An
estimate of the value of property, made by a qualified professional
called an "appraiser". Most states require licenses.
Various lenders have their own lists of approved appraisers.
- APPROVED
ATTORNEY
-
An
attorney authorized by a title insurance company to handle closings
and render title opinions.
- APPURTENANCE
-
Anything
attached to the land or used with it passing to the new owner.
- ASSESSMENT
-
A
local tax levied against a property for a specific purpose, such as
a sewer or street lights.
- CONDITION
-
-
"What you see is what you get". Seller does not make any
guarantees or warrantees as to the physical condition of the
property.
- ASSIGN
-
To
transfer interest.
- ASSIGNEE
-
One
who receives an assignment or transfer of rights. An assignment of a
contract transfers the right to buy property.
- ASSIGNOR
-
The
one who assigns to another person.
- ASSUMPTION
-
The
agreement between buyer and seller where the buyer takes over the
payments on an existing mortgage from the seller. Assuming a loan
can usually save the buyer money since this is an existing mortgage
debt, unlike a new mortgage where closing cost and new, possibly
higher, market-rate interest charges will apply.
- ATTACHMENT
-
Seizure
of property through Court process to repay a debt.
- ATTORNEY
IN FACT
-
A
type of agency relationship where one person holds a POWER
OF ATTORNEY allowing him to execute legal documents on behalf of
another. Decisions made by the attorney in fact are binding on the
principal.
- BALLOON
(payment) mortgage
-
Usually
a short-term fixed-rate loan which involves small payments for a
certain period of time and one large payment for the remaining
amount of the principal at a time specified in the contract.
- BANKRUPTCY
-
A
provision of Federal Law whereby a debtor surrenders his assets to
the Bankruptcy Court and is relieved of the future obligation to
repay his unsecured debts. A Trustee in Bankruptcy administers the
assets, selling them to pay as much of the debt as possible. If your
seller is in bankruptcy, the Trustee in Bankruptcy owns the property
and is the party to sign the contract and make decisions. After
bankruptcy, the debtor is discharged and his unsecured creditors may
not pursue further collection efforts against him. Secured
creditors, those holding deeds of trust or judgment liens, continue
to be secured by the property but they may not take other action to
collect from the debtor.
- BENCHMARK
-
A
permanent reference mark for surveyors.
- BENEFICIARY
-
A
person named to receive a benefit from a TRUST.
A contingent beneficiary has conditions attached to his rights,
usually someone else must die first.
- BID
-
An
offer.
- BINDER
-
A
title insurance binder is the written commitment of a title
insurance company to insure title to the property subject to the
conditions and exclusions shown on the binder.
- BLANKET
MORTGAGE
-
A
mortgage covering at least two pieces of real estate as security for
the same mortgage. This sort of loan is more common for commercial
property or "special case" loans.
- BOND
-
An
amount of money, often posted with the Court, to guarantee against
loss as a result of a possible claim. For example, if there is a LIEN
against the property, the owner may post a bond and the lien is
removed from the property and the parties argue over the money
rather than the property.
- BREACH
OF CONTRACT
-
Failure
to perform provisions of a contract.
- BROKER.
-
An
individual in the business of assisting in arranging funding or
negotiating contracts for a client buy who does not loan the money
himself. Brokers usually charge a fee or receive a commission for
their services.
- BUILDING
RESTRICTION LINE
-
A
required set-back a certain distance from the road within which no
building may take place. This restriction may appear in the original
plat of subdivision, restrictive covenants or by building codes and
zoning ordinances.
- BUY-DOWN
-
When
the lender and/or the home builder subsidized the mortgage by
lowering the interest rate during the first few years of the loan.
While the payments are initially low, they will increase when the
subsidy expires. These are sometimes used to qualify borrowers for a
loan amount that they would not otherwise qualify for but will be
able to pay in subsequent years as their income increases.
- BY-LAWS
-
Rules
and regulations governing an association orcorporation.
- CAPITAL
GAINS
-
Profit
earned from a sale of real estate.
- CAPITALIZATION
-
A
method used to estimate value of a property based on the rate of
return on investment.
- CASHFLOW
-
The
amount of cash derived over a certain period of time from an
income-producing property. The cash flow should be large enough to
pay the expenses of the income producing property (mortgage payment,
maintenance, utilities, etc.)
- CAVEAT
EMPTOR
-
Buyer
beware. The buyer must inspect the property and satisfy himself it
is adequate for his needs. The seller is under no obligation to
disclose defects but may not actively conceal a known defect or lie
if asked.
- CERTIFICATE
OF ELIGIBILITY
-
The
document given to qualified veterans which entitles them to VA
guaranteed loans for homes, business, and mobile homes. certificates
of eligibility may be obtained by sending DD-214 (Separation Paper)
to the local VA office with VA form 1880 (request for Certificate of
Eligibility)
- CERTIFICATE
OF OCCUPANCY
-
A
certificate issued by a local governmental body stating that the
building is in a condition to be occupied.
- CERTIFICATE
OF SATISFACTION
-
A
document signed by the Noteholder and recorded in the land records
evidencing release of a DEED
OF TRUST, MORTGAGE
or other lien on the property.
- CERTIFICATE
OF TITLE
-
A
written opinion by an attorney setting forth the status of title to
the property as shown on the public records. The certificate does
not certify as to matters not of record and affords no protection
unless the author was negligent. Compare, TITLE
INSURANCE.
- CHAIN
OF TITLE
-
The
series of transactions from GRANTOR
to GRANTEE
as evidenced in the land records.
- CHATTEL
-
Personal
property.
- CLASS
ACTION
-
A
claim brought up on behalf of a group of people.
- CLOSING
-
The
meeting between the buyer, seller and lender or their agents where
the property and funds legally change hands. Also called settlement.
closing costs usually include an origination fee, discount points,
appraisal fee, title search and insurance, survey, taxes, deed
recording fee, credit
- CLOUD
ON TITLE
-
An
evidence of encumbrances.
- CONDEMNATION
-
A
judicial proceedings through which a governmental body takes a
private property for a public use.
- CC&R's
-
Covenants,
conditions, and restrictions.
-
The
basic rules establishing the rights and obligations of owners of
real property within a subdivision or other tract of land in
relation to other owners within the same subdivision or tract and in
relation to an association of owners organized for the purpose of
operating and maintaining property commonly owned by the individual
owners.
- COINSURANCE
-
When
more than one insurance company shares the risk of a particular
transaction or series of transactions. Lenders may require
co-insurance on large commercial projects.
- COLLATERAL
-
Property
pledged to secure a loan.
- CONDEMNATION
-
Taking
of private property for a public use through exercise of the power
of EMINENT
DOMAIN. The Constitution protects against taking without fair
compensation.
- CONDOMINIUM
-
A
system of individual FEE
SIMPLE ownership of portions (units) in a multi-unit structure,
combined with joint ownership of common areas. Each individual may
sell or encumber his own unit. Compare, COOPERATIVE.
- CONSERVATOR
-
Also
called a Committee or Guardian, a person designated by the Court to
protect and preserve the property of someone who is not able to
manage their own affairs. Examples include the mentally incompetent,
minors and incarcerated persons.
- CONSTRUCTION
LOAN
-
A
short term interim loan to pay for the construction of buildings or
homes. These are usually designed to provide periodic disbursements
to the builder as he progresses. These are generally done by lenders
with offices local to the site of the construction. This enables the
lender or their agent to monitor the progress of the construction.
- CONTRACT
-
A
legally enforceable agreement between two parties.
- CONTRACT
FOR DEED
-
Also
known as a Land Contract or Land Installment Contract. A method of
financing where title remains in the Seller's name until the Buyer
has paid the full purchase price. A Contract for Deed will normally
trigger the DUE
ON SALE CLAUSE in a DEED
OF TRUST or MORTGAGE
but Veterans Administration regulations specifically allow Contracts
for Deed without invoking the DUE
ON SALE CLAUSE.
- CONVENTIONAL
LOAN
-
A
mortgage not insured by FHA or guaranteed by the VA.
- COOPERATIVE
-
A
system of individual ownership of stock in a corporation that in
turn, owns the structure. Each owner has an exclusive right to use
his individual unit and must pay his portion of the debt encumbering
the entire building. Compare, CONDOMINIUM.
- COST
APPROACH
-
A
method used by an appraiser to estimate replacement cost of
improvements less depreciation.
- COTENANCY
-
Ownership
in the same land by more than one person. See, TENANTS
IN COMMON, JOINT
TENANTS, TENANTS
BY THE ENTIRETY.
- COVENANT
-
A
written agreement or restriction on the use of land or promising
certain acts. Homeowner Associations often enforce restrictive
covenants governing architectural controls and maintenance
responsibilities. However, land could be subject to restrictive
covenants even if there is no homeowner's association.
- CREDIT
REPORT
-
A
report documenting the credit history and current status of a
borrower's credit standing.
- DEBT-TO-INCOME
RATIO
-
The
ratio, expressed as a percentage, which results when a borrower's
monthly payment obligation on long-term debts is divided by his or
her gross monthly income. See housing expenses-to-income ratio.
- DEED
-
The
written document conveying real property. The Deed must be executed
(signed), ACKNOWLEDGED,
and DELIVERED
to the Grantee. Once recorded at the Courthouse, the original piece
of paper is not needed to convey title in the future.
- DEED
OF TRUST
-
A
voluntary lien to secure a debt deeding the property to Trustees who
foreclose, sell the property at public auction, in the event of
default on the Note the Deed of Trust secures. Compare, MORTGAGE.
- DEFAULT
-
Failure
to meet legal obligations in a contract, specifically, failure to
make the monthly payments on a mortgage.
- DEFERRED
INTEREST
-
When
a mortgage is written with a monthly payment that is less than
required to satisfy the note rate, the unpaid interest is deferred
by adding it to the loan balance. Seenegative amortization
- DEFICIENCY
JUDGMENT
-
If
the foreclosure sale does not bring sufficient proceeds to pay the
costs of sale and the note in full, the holder of the note may
obtain a judgment against the maker for the difference.
- DELIVERY
-
The
final, unconditional and absolute transfer of a DEED
to the Grantee so that the Grantor may not revoke it. A Deed, signed
but held by the Grantor, does not pass title.
- DOWER
-
A
spouse's interest in the property of a deceased spouse.
- DOWN
PAYMENT
-
Money
paid to make up the difference between the purchase price and the
mortgage amount.
- DUAL
AGENCY
-
Representation
of opposing parties (buyer and seller) at the same time in the same
transaction. This situation most often refers to cases where the
Realtor is the agent for both parties.
- DUE
ON SALE CLAUSE
-
A
clause in the MORTGAGE
that makes the loan non-assumable by providing the noteholder may
call the loan immediately due and payable upon a sale or conveyance
of an interest in the property. The FNMA/FHLMC form provides that a
lease of more than three years or a lease with an option to buy also
triggers this provision.
- EARNEST
MONEY
-
A
good faith deposit.
- EASEMENT
-
The
right to use the land of another for a specific limited purpose.
Examples include utility lines, driveways, and INGRESS
AND EGRESS. Easements can be temporary or permanent.
- EMINENT
DOMAIN
-
The
power of the state to take private property for public use upon
payment of just compensation.
- ENCROACHMENT
-
The
physical intrusion of a structure or improvement on the land of
another. Examples include a fence or driveway over the property
line.
- ENCUMBRANCE
-
Any
lien, liability or charge against a property.
- EQUAL
CREDIT OPPORTUNITY ACT (ECOA)
-
Is
a federal law that requires lenders and other creditors to make
credit equally available without discrimination based on race,
color, religion, national origin, age, sex, marital status or
receipt of income from public assistance programs.
- EQUITY
-
The
difference between the fair market value and current indebtedness,
also referred to as the owner's interest. The value an owner has in
real estate over and above the obligation against the property.
- EQUITY
SHARING
-
A
form of joint ownership between an owner/occupant and an
owner/investor. The investor takes depreciation deductions for his
share of the ownership. The occupant receives a portion of the tax
write-offs for interest and taxes and a part of his monthly payment
is treated as rent. The co-owners divide the profit upon sale of the
property. Compare, JOINT
OWNERSHIP AGREEMENT.
- ESCHEAT
-
Property
that reverts to the state when an individual dies without heirs and
without a will.
- ESCROW
-
A
disinterested third party holds funds or documents on behalf of
others and subject to their instructions.
- EXECUTOR
-
A
person named in a will to carry out its terms and administer the
estate. The feminine form is Executrix. Compare, ADMINISTRATOR.
- FEE
SIMPLE
-
The
absolute total interest in real property. Compare, LIFE
ESTATE, REVERSION.
- FEDERAL
HOME LOAN MORTGAGE CORPORATION
-
A
affiliate of the Federal Home loan Bank which creates a secondary
money market in conventional residential loans and in FHA and VA
loans by purchasing mortgage loans from members of the Federal
Reserve System and the Federal Home Loan Bank Systems.
- FIDUCIARY
RELATIONSHIP
-
A
relationship of trust and confidence between principal and agent;
lawyer and client; doctor and patient; etc..
- FINANCING
STATEMENT
-
Lenders
record financing statements to evidence personal property, such as a
new furnace, siding or windows, is subject to a lien.
- FIXTURE
-
An
item of personal property attached to real property so that it can
not be removed without damage to the real property. A
FIXTURE becomes part of the real property.
- FORECLOSURE
-
The
process by which a lender sells property securing a loan in order to
repay the loan. Under a DEED
OF TRUST, foreclosure is by public auction after appropriate
advertisement. A MORTGAGE
may require the lender to obtain Court approval prior to sale.
- FULLY
INDEXED NOTE RATE
-
As
related to adjustable rate mortgages, the index value at the time of
application plus the gross margin stated in the note.
- GENERAL
WARRANTY DEED
-
The
Grantor warrants title against all claims.
- GRANTEE
-
The
person receiving an interest in property. Compare, GRANTOR
- GRANTOR
-
The
person granting, selling or giving up an interest in property.
Compare, GRANTEE.
- GRADUATED
PAYMENT MORTGAGE (GPM)
-
A
type of flexible-payment mortgage where the payments increase for a
specified period of time and then level off.
- GROSS
INCOME
-
Income
before expenses
- GROSS
MARGIN
-
With
regard to an adjustable rate mortgage, an amount expressed as
percentage points, stated in the note which is added to the current
index value on the rate adjustment date to establish a new note
rate.
- GROUND
LEASE
-
The
owner grants a long term lease of the land (usually 99 years) and
allows the lessee to build and use the land as agreed. At the end of
the term, the land and all improvements revert to the owner.
- GUARDIAN
-
One
appointed by the Court to administer the affairs of a minor. A
guardian ad litem is appointed to protect one's interest in a
particular legal action. See, CONSERVATOR.
- GROSS
INCOME
-
Income
before expenses.
- HAZARD
INSURANCE
-
A
form of insurance in which the insurance company protects the
insured from specified losses, such as fire, windstorm and the like.
- HIATUS
-
A
gap or space left between two parcels of land and not included in
the legal description of either parcel. Similar terms are Gaps and
Gores.
- HOMESTEAD
DEED
-
A
declaration filed in the land records that an individual is
asserting his homestead exemption. That exemption allows one to
protect some assets (amount varies by state) against the claims of
creditors.
- HOUSING
RATIO
-
The
ratio, expressed as a percentage, which results when a borrower's
housing expenses are divided by his/her gross monthly income. See
debt-to-income ratio.
- IMPOUND
-
That
portion of a borrower's monthly payments held by the lender or
servicer to pay for taxes, hazard insurance, mortgage insurance,
lease payments, and other items as they become due. Also known as
reserves.
- INCOME
APPROACH
-
A
method used by an appraiser to estimate the value of a property by
calculating it's generated income.
- INDEMNITY
-
A
protection against actual loss or damage as a result of the matter
mentioned. An indemnity is not an absolute guarantee that something
won't happen, it states the terms under which an actual loss will be
compensated.
- INDEX
-
A
published interest rate against which lenders measure the difference
between the current interest rate on an adjustable rate mortgage and
that earned by other investments (such as one- three-, and five-year
U.S. Treasury security yields, the monthly average interest rate on
loans closed by savings and loan institutions, and the monthly
average costs-of-funds incurred by savings and loans), which is then
used to adjust the interest rate on an adjustable mortgage up or
down.
- INGRESS
AND EGRESS
-
Applied
to EASEMENTS, meaning the right to go in and out over a piece of
property but not the right to park on it.
- INSURABLE
TITLE
-
Title
subject to a defect or claim which a title insurance company is
willing to insure against. Compare, MARKETABLE
TITLE.
- INSURED
CLOSING LETTER
-
An
Indemnity given to a lender from a title insurance company, agreeing
to be responsible if the closing agent does not follow the lender's
instructions or misappropriates the loan proceeds. Lender's usually
require an insured closing letter be on file for each settlement.
- INTERIM
FINANCING
-
A
construction loam made during completion of a building or a project.
A permanent loan usually replaces this loan after completion.
- INITIAL
NOTE RATE
-
With
regard to an adjustable rate mortgage, the note rate upon
origination. This rate may differ from and is usually less than the
fully indexed rate.
- INTESTATE
-
An
estate without a Will. Compare, TESTATE
- JOINT
OWNERSHIP AGREEMENT
-
An
agreement between owners defining their rights, ownership, monetary
obligations and responsibilities. This could be between and investor
and an occupant or the occupants. If an investor is involved, the
investor does not take depreciation deductions and none of the
occupant's payment is deemed rent for tax purposes. Compare, EQUITY
SHARING.
- JOINT
TENANTS
-
Two
or more persons own a property. Joint tenants with the common law
right of survivorship means the survivor inherits the property
without reference to the decedent's will. Creditors may sue to have
the property divided to settle claims against one of the owners.
Compare, TENANTS
IN COMMON, TENANTS
BY THE ENTIRETY.
- JUDGMENT
LIEN
-
A
judgment is a lien against all real property owned by the judgment
debtor in the county where the judgment is docketed (recorded).
- JUMBO
LOAN
-
a
loan which is larger (more than $207,000 as of 1/1/96) than the
limits set by the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation. Because jumbo
loans cannot be funded by these two agencies, they usually carry a
higher interest rate.
- JUNIOR
MORTGAGE
-
Mortgage
of lesser priority than the prior recorded mortgage.
- LAND
CONTRACT
-
See,
CONTRACT
FOR DEED.
- LEASE
HOLD ESTATE
-
Tenants
right of possession for a specific period of time under a lease
agreement. (Common in Hawaii.)
- LIEN
-
A
claim or charge against property. Property is said to be encumbered
by a lien and the lien must be removed to clear title.
- LIFE
CAP
-
With
regard to an adjustable rate mortgage, a ceiling the note rate
cannot exceed over the life of the loan.
- LIFE
ESTATE
-
The
right to use, occupy and own for the life of an individual. Compare,
FEE
SIMPLE.
- LOAN-TO-VALUE
RATIO (LTV)
-
The
relationship between the amount of the mortgage loan and the
appraised value of the property expressed as a percentage.
- LIS
PENDENS
-
Recorded
document showing a pending litigation filed in the court. These show
up on the preliminary title report and must be dealt with when
transferring ownership or refinancing.
- LOAN
APPLICATION
-
The
loan application is the source of information on which the lender
bases a decision to make the loan; defines the term of the loan,
gives the name(s) of the borrower(s) , place of employment, salary,
bank accounts and credit references, and describes the real estate
that is to be mortgaged. It also stipulates the amount of the loan
being applied for and the repayment terms.
- MAJORITY
-
The
age at which a person may handle his own affairs.
- MARGIN
-
The
amount a lender adds to the index on an adjustable rate mortgage to
establish the adjusted interest rate.
- MARKETABLE
TITLE
-
Title
without defects or claims so as to be readily accepted without fair
or reasonable doubt. Compare, INSURABLE
TITLE.
- MARKET
VALUE
-
The
highest price that a buyer would pay and the lowest price a seller
would accept on a property. Market value may be different from the
price a property could actually be sold for at a given time.
- MECHANIC'S
LIENS
-
The
right of an unpaid contractor, laborer or supplier to file a lien
against property to recover the value of his work
- METES
AND BOUNDS
-
A
means of describing land by directions and distances rather than
reference to a lot number. Generally used when land has not been
subdivided into lots.
- MORTGAGE
-
A
voluntary lien filed against property to secure a debt, usually a
loan. To foreclose, the lender must often institute a court action
and the borrower may have the right to reclaim the property after
foreclosure. Compare, DEED
OF TRUST.
- MORTGAGOR
-
The
borrower or homeowner
- NEGATIVE
AMORTIZATION
-
Occurs
when your monthly payments are not large enough to pay all the
interest due on the loan. This unpaid interest is added to the
unpaid balance of the loan. the danger of negative amortization is
that the home buyer ends up owing more than the original amount of
the loan.
- NET
EFFECTIVE INCOME
-
The
borrower's gross income minus federal income tax.
- NET
WORTH
-
The
difference between total assets and total liabilities.
- NON
ASSUMPTION CLAUSE
-
A
statement in a mortgage contract forbidding the assumption of the
mortgage without the prior approval of the lender. Note: The signed
obligation to pay a debt, as a mortgage note.
- NOTE
-
A
written promise to pay a certain sum of money at a certain time. A
negotiable note starts"Pay to the order of" and is
transferable by endorsement similar to a check.
- NOTARY
PUBLIC
-
One
authorized by law to acknowledge and certify documents and
signatures.
- OFFER
-
A
proposal; after acceptance it becomes a contract.
- OPTION
-
A
right given for a consideration to keep an offer to purchase or
lease open for specific time.
- PARTITION
-
The
forced division of land among parties who were formerly co-owners. A
partition suit may ask to divide the land or if that is not
practical, sell the land and divide the proceeds.
- PAT-OFF
AMOUNT
-
A
total balance, mount of a full payment on existing loan or lien.
- PLAT
-
A
map showing the division of piece of land with lots, streets and, if
applicable, common area.
- PIPESTEM
LOT
-
A
lot connected to a public street by a narrow strip of land. Usually
several adjacent pipestems are combined to form one driveway with
each owner having a mutual-reciprocal easement to use and maintain
the driveway to the street.
- PITI
-
Principal,
Interest, Taxes and Insurance. Also called monthly housing expense.
- POINTS
(loan discount points)
-
Prepaid
interest assessed at closing by the lender. Each point is equal to 1
percent of the loan amount (e.g., two points on a $100,000 mortgage
would cost $2,000).
- POWER
OF ATTORNEY
-
A
written document authorizing another to act on his behalf as an ATTORNEY
IN FACT. One does not need to be a licensed attorney to act as
an attorney in fact but, power of attorney forms are powerful legal
documents that should be used only under advice of a licensed
attorney at law.
- PREPAYMENT
PENALTY
-
An
additional charge imposed by the lender for paying off a loan before
the due date.
- PRIME
RATE
-
The
most favorable interest rate charged by lenders on a short term
loans to qualified customers.
- PRIVATE
MORTGAGE INSURANCE (PMI)
-
In
the event that you do not have a 20 percent down payment, lenders
will allow a smaller down payment - as low as 3 percent in some
cases. With the smaller down payment loans, however, borrowers are
usually required to carry private mortgage insurance. Private
mortgage insurance will usually require an initial premium payment
and may require an additional monthly fee depending on you loan's
structure.
- PROBATE
-
Court
process to prove a valid will.
- PROMOSSORY
NOTE
-
A
written unsecured note promising to pay a specified amount of money
on demand, transferable to a third party.
- PUBLIC
SALE
-
Sale,
auction open to the public.
- PURCHASE
MONEY MORTGAGE (PMM)
-
Seller
financing as a part of the purchase price.
- QUIET
TITLE
-
A
suit brought to remove a claim or objection on title.
- QUITCLAIM
DEED
-
A
deed releasing whatever interest you may hold in a property but
making no warranty whatsoever. Compare, SPECIAL
WARRANTY DEED and GENERAL
WARRANTY DEED
- REALTOR
-
A
member of National Association of Realtors.
- RESISSUE
RATE
-
A
discounted rate for title insurance when the title was previously
insured with an owner's title insurance policy issued within the
last ten years.
- 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.
- REFINANCE
-
Obtaining
a new mortgage loan on a property already owned. Often to replace
existing loans on the property.
- REMAINDER
-
An
interest in land that is postponed until the termination of some
other interest such as a LIFE
ESTATE. Compare, FEE
SIMPLE.
- RESPA
-
short
for the Real Estate Settlement Procedures Act. RESPA is a federal
law that allows consumers to review information on known or
estimated settlement cost once after application and once prior to
or at a settlement. The law requires lenders to furnish the
information after application only.
- REVERSION
-
A
provision in a conveyance that the land will return to the grantor
upon the happening of an event or contingency. Compare, FEE
SIMPLE.
- RIPARIAN
RIGHTS
-
The
rights of an owner of land adjacent to water.
- SBA
-
Small
Business Administration.
- SECONDARY
MARKET
-
A
market for the purpose of purchase and sale of existing mortgages
usually at discounted prices to provide greater liquidity to the
mortgagee/lender.
- SECOND
MORTGAGE
-
A
mortgage recorded after a First mortgage, ranks second in priority.
- SPECIAL
ASSESSMENT
-
Additional
tax imposed by the local government for public improvements such as
new streets, etc..
- SPECIAL
WARRANTY DEED
-
The
seller warrants he has done nothing to impair title but makes no
warranty before his ownership. Compare, GENERAL
WARRANTY DEED and QUITCLAIM
DEED.
- SPECIFIC
PERFORMANCE
-
A
legal action to complete the performance of a contract.
- STATUTE
OF LIMITATIONS
-
The
time period to file a law suit to enforce a claim or it is barred by
law.
- SUBDIVISION
-
Dividing
land into lots and streets. The owner signs a PLAT
and Deed of Resubdivision which is recorded among the land records.
The state and county have strict requirements for subdivision of
land.
- SUBJECT
TO
-
Taking
title to property with a lien but not agreeing to be personally
responsible for the lien. If the holder who forecloses the lien can
take the property but may not collect any money from the owner who
took "subject to." Compare, ASSUMPTION.
- TENANTS
BY THE ENTIRETY
-
A
husband and wife own the property with the common law right of
survivorship so, if one dies, the other automatically inherits. One
may not sue the other to PARTITION
the property. A creditor of one may not claim the property or the
proceeds of sale. Compare, TENANT
IN COMMON, JOINT
TENANTS.
- TENANTS
IN COMMON
-
Two
or more persons own the property with no right of survivorship. If
one dies, his interest passes to his heirs, not necessarily the
co-owner. Either party, or a creditor of one, may sue to PARTITION
the property. Compare, TENANTS
BY THE ENTIRETY, JOINT
TENANTS.
- TESTATE
-
To
die with a Will. Compare, INTESTATE.
- TESTATOR
-
One
who makes out a last will and testament. The feminine form is
Testatrix.
- TITLE
-
a
document that gives evidence of an individual's ownership of
property.
- TITLE
INSURANCE
-
Insurance
that provides an INDEMNITY
against loss or damage as a result of defect in title ownership to a
particular piece of property. Title insurance covers mistakes made
during a TITLE
SEARCH as well as matters which could not be found or discovered
in the public records such as missing heirs, mistakes, fraud and
forgery. Compare, CERTIFICATE
OF TITLE.
- TITLE
SEARCH
-
An
examination of the public records, including court decisions, to
disclose facts concerning the ownership of real estate. The title
examiner prepares an ABSTRACT
and the title agent prepares a BINDER
but decisions regarding the legal sufficiency of title or questions
requiring legal interpretation must be resolved by a licensed
attorney at law.
- TRUST
-
A
right to or in property held for the benefit of another. A trust may
be written or implied. An implied trust is called a Constructive
Trust.
- TRUSTEE
-
One
who holds property in Trust for another.
- TRUTH-IN-LENDING
-
a
federal law requiring disclosure of the Annual Percentage Rate to
home buyers shortly after they apply for the loan. Also known as
Regulation Z.
- TWO-STEP
MORTGAGE
-
a
mortgage in which the borrower receives a below-market interest rate
for a specified number of years (most often five or 7), and then
receives a new interest rate adjusted (within certain limits) to
market conditions at that time. the lender sometimes has the option
to call the loan due with 30 days notice at the end of five or 7
years.
- UNDERWRITING
-
the
decision whether to make a loan to a potential home buyer based on
credit, employment, assets, and other factors and the matching of
this risk to an appropriate rate and term or loan amount.
- USURY
-
Charging
more than the maximum legally permitted rate of interest.
- VA
Loan
-
a
long-term, low-or no-down payment loan guaranteed by the Department
of Veterans Affairs. Restricted to individuals qualified by military
service or other entitlements.
- VARIABLE
RATE MORTGAGE (VRM)
-
see
adjustable rate mortgage
- VERIFICATION
OF DEPOSIT (VOD)
-
a
document signed by the borrower's financial institution verifying
the status and balance of his/her financial accounts.
- VERIFICATION
OF EMPLOYMENT (VOE)
-
a
document signed by the borrower's employer verifying his/her
position and salary.
- WAIVER
-
Relinquishment
of a right.
- WARRANTY
DEED
-
A
deed conveying the title to a property with a warranty of clean,
clear marketable title
- WRAPAROUND
-
The
debt secured includes an existing debt already on the property. The
payments made to the holder of the wraparound include payments due
on the existing loan and the holder must forward the appropriate
portion of each payment to the existing noteholder. Often used to
avoid a PREPAYMENT
PENALTY or a DUE
ON SALE CLAUSE. Can refer to a wraparound DEED
OF TRUST or
CONTRACT FOR DEED.
- ZONING
-
Regulation
of private land use and development by local government.