| Abstract (Of Title) |
| A summary of the public records relating to the title
to a particular piece of land. If there are any title
defects they must be cleared before a buyer can purchase
clear, marketable, and insurable title. |
| Acceleration Clause |
| Allows the lender to speed up the rate
at which your loan comes due or even to demand immediate
payment of the entire balance of the loan should you default
on you loan. |
| Adjustable Rate Mortgage (ARM) |
| A mortgage in which the interest rate is adjusted periodically
based on an index. Also known as the renegotiable rate
mortgage, the variable rate mortgage or the Canadian rollover
mortgage. |
| Adjustment Interval |
| On an adjustable rate mortgage, the time between changes
in the interest rate and/or monthly payment, usually one,
three or five years. |
| Agreement of Sale |
| Known by various names, such as contract of purchase,
purchase agreement, or sales agreement according to location
or jurisdiction. A contract in which a seller agrees to
sell and a buyer agrees to buy, under specific terms spelled
out in writing and signed by both parties. |
| Amortization |
| Loan payment calculated to pay off the debt at the end
of a fixed period, including interest on the outstanding
balance. |
| Annual Percentage Rate (APR) |
| The cost of credit as a yearly rate. The percentage
results from an equation considering the total amount
financed, the finance charges, and the term of the loan.
Usually not the same as the interest rate. |
| Appraisal |
| An estimate of the value of property, made by a professional
appraiser. |
| Appraisal Fee |
| The charge for estimating the value of property. |
| Asset |
| Property that can be used to repay debt, such as stocks
and bonds or a car. |
| 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. |
| Automated Teller Machines (ATMs) |
| Electronic terminals through which customers may make
deposits, withdrawals, or other transactions as they would
through a bank teller. |
| 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
specific time. |
| Binder or "Offer to Purchase" |
| A preliminary agreement, secured by the payment of earnest
money, between a buyer and seller as an offer to purchase
real estate. A binder secures the right to purchase real
estate upon agreed terms for a limited period of time.
If the buyer changes his mind or is unable to purchase,
the earnest money is forfeited unless the binder expressly
provides that it is to be refunded. |
| Billing Error |
| Any mistake in your monthly statement as defined by
the Fair Credit Billing Act. |
| Broker |
| An individual in the business of assisting in arranging
funding or negotiating contracts for a client but who
does not loan the money himself. |
| Building Line or Setback |
| Distances from the ends and/or sides of the lot beyond
which construction may not extend. The building line may
be set by a filed plat of subdivision, by restrictive
covenants in deeds or leases, by building codes, or by
zoning ordinances. |
| Business Days |
| Find out from your institution to find out what days
it counts as business days under the Truth in Lending
and Electronic Fund Transfer Acts. |
| Buydown |
| When
the lender and/or the home builder subsidizes 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. |
| Caps (Interest) |
| Consumer
safeguards which limit the amount the interest rate on
an adjustable rate mortgage may change per year and/or
the life of the loan. |
| Caps (Payment) |
| Consumer
safeguards which limit the amount monthly payments on
an adjustable rate mortgage may change. |
| Certificate of Title |
| A
certificate issued by a title company or a written opinion
by an attorney that the seller has good marketable and
insurable title to the property which he is offering for
sale. A certificate of title offers no protection against
any hidden defects in the title which an examination of
the records could not reveal. The issuer of a certificate
of title is liable only for damages due to negligence. |
| Closing |
| The
meeting between the buyer, seller and lender where the
property and funds legally change hands. Also called settlement. |
| Closing Costs |
| Includes
a loan origination fee, points, appraisal fee, title search
and insurance, survey, taxes, deed recording fee, credit
report charge and other costs assessed at settlement.
The closing costs usually are about 2 percent to 6 percent
of the mortgage amount. |
| Closing Day |
| The
day on which the formalities of a real estate sale are
finished. The certificate of title, abstract, and deed
are generally prepared for the closing by an attorney
and this cost charged to the buyer. The buyer signs the
mortgage, and closing costs are paid. The final closing
merely reiterates the original agreement reached in the
agreement of sale. |
| Cloud (On Title) |
| An
outstanding claim which negatively affects the marketability
of title. |
| Collateral |
| Property
offered to support a loan that can be seized if you default. |
| Commission |
| Money
paid to a real estate agent or broker by the seller as
compensation for finding a buyer and completing the sale. |
| Commitment |
| An
agreement, often in writing, between a lender and a borrower
to loan money at a future date subject to the stated conditions. |
| Condemnation |
| A
determination by a governmental agency that a particular
building is unsafe or unfit for use. |
| Condominium |
| Individual
ownership of a unit and an individual interest in the
common areas and facilities which serve the project. |
| Construction Loan |
| A
short term interim loan for financing the cost of construction.
The lender advances funds to the builder as the work progresses. |
| Contractor |
| A
person who contracts to erect buildings. There are also
contractors for each phase of construction: heating, electrical,
plumbing, air conditioning, road building and others. |
| Conventional Loan |
| A
mortgage not insured by FHA or guarantee by the VA or
Farmers Home Administration (FmHA). |
| Cooperative Housing |
| An
apartment building or a group of dwellings owned by a
corporation, the stockholders of which are the residents
of the dwellings. It is operated for their benefit by
their elected board of directors. In a cooperative, the
corporation or association owns title to the real estate.
A resident purchases stock in the corporation which entitles
him to occupy a unit in the building or property owned
by the cooperative. While the resident does not own his
unit, he has an absolute right to occupy his unit for
as long as he owns the stock. |
| Cosigner |
| Another
person who signs your loan and assumes equal responsibility
for it. |
| Credit |
| The
right granted by a creditor to pay in the future in order
to buy or borrow in the present; also, a sum of money
owed to a person or business. |
| Credit Bureau |
| An
agency that keeps your credit record. |
| Credit Card |
| Any
card used from time to time to borrow money or buy goods
or services on credit. |
| Credit History |
| The
record of how you've borrowed and repaid debts. |
| Credit 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 net income (FHA/VA loans) or
gross monthly income (Conventional loans). See Housing
Expenses-to-Income Ratio. |
| Credit-related Insurance |
| Health,
life, or accident insurance designed to pay the outstanding
balance of debt. |
| Credit Scoring System |
| A
statistical system used to rate credit applicants according
to various characteristics relevant to creditworthiness. |
| Creditor |
| A
person or business from whom you borrow or to whom you
owe money. |
| Creditworthiness |
| Past
and future ability to repay debts. |
| Debit Card (EFT Card) |
| A
plastic card, looks similar to a credit card, that consumers
may use to make purchases, withdrawals, or other types
of electronic fund transfers. |
| Deed |
| A
formal written instrument by which title to real property
is transferred from one owner to another. The deed should
contain an accurate description of the property being
conveyed, should be signed and witnessed according to
the laws of the State where the property is located, and
should be delivered to the purchaser at closing day. There
are two parties to a deed: the grantor and the grantee.
(See also deed of trust, general warranty deed, quitclaim
deed, and special warranty deed.) |
| Deed of Trust |
| In
many states, this document is used in place of a mortgage
to secure the payment of a note. |
| Default |
| Failure
to repay a loan or otherwise meet the terms of your credit
agreement. |
| Deferred Interest |
| See
Negative Amortization. |
| Delinquency |
| Failure
to make payments on time. This can lead to foreclosure. |
| Department of Veterans Affairs (VA) |
| An
independent agency of the federal government which guarantees
long-term, low- or no-down payment mortgages to eligible
veterans. |
| Depreciation |
| Decline
in value of a house due to wear and tear, adverse changes
in the neighborhood, or any other reason. |
| Disclosures |
| Information
that must be given to consumers about their financial
dealings. |
| 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). |
| Documentary Stamps |
| A
State tax, in the forms of stamps, required on deeds and
mortgages when real estate title passes from one owner
to another. The amount of stamps required varies with
each State. |
| Down Payment |
| Money
paid to make up the difference between the purchase price
and mortgage amount. Down payments usually are 10 percent
to 20 percent of the sales price on Conventional loans,
and no money down up to 5 percent on FHA and VA loans. |
| Due-On-Sale Clause |
| A
provision in a mortgage or deed of trust that allows the
lender to demand immediate payment of the balance of the
mortgage if the mortgage holder sells the home. |
| Earnest Money |
| Money
given by a buyer to a seller as part of the purchase price
to bind a transaction or assure payment. |
| Easement Rights |
| A
right-of-way granted to a person or company authorizing
access to or over the owner's land. An electric company
obtaining a right-of-way across private property is a
common example. |
| Elderly Applicant |
| As
defined in the Equal Credit Opportunity Act, a person
62 or older. |
| Electronic Fund Transfer (EFT) Systems |
| A
variety of systems and technologies for transferring funds
electronically rather than by check. |
| Encroachment |
| An
obstruction, building, or part of a building that intrudes
beyond a legal boundary onto neighboring private or public
land, or a building extending beyond the building line. |
| Encumbrance |
| A
legal right or interest in land that affects a good or
clear title, and diminishes the land's value. It can take
numerous forms, such as zoning ordinances, easement rights,
claims, mortgages, liens, charges, a pending legal action,
unpaid taxes, or restrictive convenants. An encumbrance
does not legally prevent transfer of the property to another.
A title search is all that is usually done to reveal the
existence of such encumbrances, and it is up to the buyer
to determine whether he wants to purchase with the encumbrance,
or what can be done to remove it. |
| 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. |
| Escrow |
| Refers
to a neutral third party who carries out the instructions
of both the buyer and seller to handle all the paperwork
of settlement or "closing." Escrow may also
refer to an account held by the lender into which the
homebuyer pays money for tax or insurance payments. |
| Fannie Mae |
| See
Federal National Mortgage Association. |
| Farmers Home Administration (FmHA) |
| Provides
financing to farmers and other qualified borrowers who
are unable to obtain loans elsewhere. |
| Federal Home Loan Mortgage Corporation (FHLMC) |
| Also
called Freddie Mac, is a quasi-governmental agency that
purchases conventional mortgages from insured depository
institutions and HUD-approved mortgage bankers. |
| Federal Housing Administration (FHA) |
| A
division of the Department of Housing and Urban Development.
Its main activity is the insuring of residential mortgage
loans made by private lenders. FHA also sets standard
for underwriting mortgages. |
| Federal National Mortgage Association (FNMA) |
| Also
known as Fannie Mae. A tax-paying corporation created
by Congress that purchases and sells conventional residential
mortgages as well as those insured by FHA or guaranteed
by VA. This institution, which provides funds for one
in seven mortgages, makes mortgage money more available
and more affordable. |
| FHA Loan |
| A
loan insured by the Federal Housing Administration open
to all qualified home purchasers. While there are limits
to the size of FHA loans, they are generous enough to
handle moderate-priced homes almost anywhere in the country. |
| FHA Mortgage Insurance |
| Requires
a small fee (up to 3 percent of the loan amount) paid
at closing or a portion of this fee added to each monthly
payment of an FHA loan to insure the loan with FHA. On
a 9.5 percent $75,000 30-year fixed-rate FHA loan, this
fee would amount t o either $2,250 at closing or an extra
$31 a month for the life of the loan. In addition, FHA
mortgage insurance requires an annual fee of 0.5 percent
of the current loan amount, the more years the fee must
be paid. |
| Finance Charge |
| The
total dollar amount credit will cost. |
| Fixed-Rate Mortgage |
| A
mortgage on which the interest rate is set for the term
of the loan. |
| Foreclosure |
| A
legal procedure in which property securing debt is sold
by the lender to pay a defaulting borrower's debt. |
| Freddie Mac |
| See
Federal Home Loan Mortgage Corporation. |
| General Warranty Deed |
| A
deed which conveys not only all the grantor's interests
in and title to the property to the grantee, but also
warrants that if the title is defective or has a "cloud"
on it (such as mortgage claims, tax liens, title claims,
judgments, or mechanic's liens against it) the grantee
may hold the grantor liable. |
| Ginnie Mae |
| See
Government National Mortgage Association. |
| Government National Mortgage Association (GNMA) |
| Also
known as Ginnie Mae, provides sources of funds for residential
mortgages, insured or guaranteed by FHA or VA. |
| Graduated Payment Mortgage (GPM) |
| A
type of flexible-payment mortgage where the payments increase
for a specified period of time and then level off. This
type of mortgage has negative amortization built into
it. |
| Grantee |
| That
party in the deed who is the buyer or recipient. |
| Grantor |
| That
party in the deed who is the seller or giver. |
| Gross Monthly Income |
| The
total amount the borrower earns per month, before any
expenses are deducted. |
| Guarantee |
| A
promise by one party to pay a debt or perform an obligation
contracted by another if the original party fails to pay
or perform according to a contract. |
| Hazard Insurance |
| A
form of insurance in which the insurance company protects
the insured from specified losses, such as fire, windstorm
and the like. |
| Home Equity Line of Credit |
| A
form of open end credit in which the home serves as collateral. |
| Housing Expenses-to-Income Ratio |
| The
ratio, expressed as a percentage, which results when a
borrower's housing expenses are divided by his/her net
effective income (FHA/VA loans) or gross monthly income
(Conventional loans). |
| HUD |
| U.S.
Department of Housing and Urban Development. Office of
Housing/Federal Housing Administration within HUD insures
home mortgage loans made by lenders and sets minimum standards
for such homes. |
| Impound |
| That
portion of a borrower's monthly payments held by the lender
or service to pay for taxes, hazard insurance, mortgage
insurance, lease payments, and other items as they become
due. Also known as reserves. |
| 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. |
| Interest |
| A
charge paid for borrowing money. |
| Interest Rate |
| The
annual rate of interest on the loan, expressed as a percentage
of 100. |
| Investor |
| Money
source for a lender. |
| Joint Account |
| A
credit account held by two or more people so that all
can use the account and all assume legal responsibility
to repay. |
| Jumbo Loan |
| A
loan which is larger (more than $203,150) 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. |
| Late Payment |
| A
payment made later than agreed upon in a credit contract
and on which additional charges may be imposed. |
| Lessee |
| A
person who signs a lease to get temporary use of property. |
| Lessor |
| A
company that provides temporary use of property usually
in return for periodic payment. |
| Liability on an Account |
| Legal
responsibility to repay debt. |
| Lien |
| A
claim upon a piece of property for the payment or satisfaction
of a debt or obligation. |
| Loan-To-Value Ratio |
| The
relationship between the amount of the mortgage loan and
the appraised value of the property expressed as a percentage. |
| Lock Term |
| A
lender's guarantee of an interest rate for a set period
of time. The time period is usually that between loan
application approval and loan closing. The lock-in protects
you against rate increases during that time. |
| Margin |
| The
amount a lender adds to the index on an adjustable rate
mortgage to establish the adjusted interest rate. |
| 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. |
| Marketable Title |
| A
title that is free and clear of objectionable liens, clouds,
or other title defects. A title which enables an owner
to sell his property freely to others and which others
will accept without objection. |
| Mortgage |
| A
lien or claim against real property given by the buyer
to the lender as security for money borrowed. Under government-insured
or loan-guarantee provisions, the payments may include
escrow amounts covering taxes, hazard insurance, water
charges, and special assessments. Mortgages generally
run from 10 to 30 years, during which the loan is to be
paid off. |
| Mortgage Commitment |
| A
written notice from the bank or other lending institution
saying it will advance mortgage funds in a specified amount
to enable a buyer to purchase a house. |
| Mortgage Insurance |
| Money
paid to insure the mortgage when the down payment is less
than 20 percent. See Private Mortgage Insurance or FHA
Mortgage Insurance. |
| Mortgage Insurance Premium |
| The
payment made by a borrower to the lender for transmittal
to HUD to help defray the cost of the FHA mortgage insurance
program and to provide a reserve fund to protect lenders
against loss in insured mortgage transactions. In FHA
insured mortgages this represents an annual rate of one-half
of one percent paid by the mortgagor on a monthly basis. |
| Mortgage Note |
| A
written agreement to repay a loan. The agreement is secured
by a mortgage, serves as proof of an indebtedness, and
states the manner in which it shall be paid. The note
states the actual amount of the debt that the mortgage
secures and renders the mortgagor personally responsible
for repayment. |
| Mortgage (Open-End) |
| A
mortgage with a provision that permits borrowing additional
money in the future without refinancing the loan or paying
additional financing charges. Open-end provisions often
limit such borrowing to no more than would raise the balance
to the original loan figure. |
| Mortgagor |
| The
borrower or homeowner. |
| MSRP |
| Stands
for Manufacturer's Suggested Retail Price. It represents
the manufacturer's recommended selling price for a vehicle
and each of its options. |
| 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 homebuyer ends up
owing more than the original amount of the loan. |
| Net Effective Income |
| The
borrower's gross income minus federal income tax. |
| Non-Assumption Clause |
| A
statement in a mortgage contract forbidding the assumption
of the mortgage without the prior approval of the lender. |
| Open-End Credit |
| A
line of credit that may be used over and over again, including
credit cards, overdraft credit accounts, and home equity
lines. |
| Open-End Lease |
| A
lease which may involve a balloon payment based on the
value of the property when it is returned. |
| Origination Fee |
| The
fee charged by a lender to prepare loan documents, make
credit checks, inspect and sometimes appraise a property;
usually computed as a percentage of face value of the
loan. |
| Overdraft Checking |
| A
line of credit that allows you to write checks or draw
funds by means of an EFT card for more than your actual
balance, with an interest charge on the overdraft. |
| PITI |
| Principal,
interest, taxes, and insurance. Also called monthly housing
expense. |
| Plat |
| A
map or chart of a lot, subdivision or community drawn
by a surveyor showing boundary lines, buildings, improvements
on the land, and easements. |
| Points |
| See
Discount Points. |
| Point-of-Sale (POS) |
| A
method by which consumers can pay for purchases by having
their deposit accounts debited electronically without
the use of checks. |
| Power of Attorney |
| A
legal document authorizing one person to act on behalf
of another. |
| Prepaids |
| Expenses
necessary to create an escrow account or to adjust the
seller's existing escrow account. Can include taxes, hazard
insurance, private mortgage insurance and special assessments. |
| Prepayment |
| A
privilege in a mortgage permitting the borrower to make
payments in advance of their due date. |
| Prepayment Penalty |
| Money
charged for an early repayment of debt. Prepayment penalties
are allowed in some form (but not necessarily imposed)
in 36 states and the District of Columbia. |
| Principal |
| The
amount of debt, not counting interest, left on a loan. |
| Private Mortgage Insurance (PMI) |
| In
the event that you do not have a 20 percent down payments,
lenders will allow a smaller down payment-as low as 5
percent in some cases. With the smaller down payments
loans, however, borrowers are usually required to carry
private mortgage insurance. Private mortgage insurance
will require an initial premium payment of 1.0 percent
to 5.0 percent of your mortgage amount and may require
an additional monthly fee depending on your loan's structure.
On a $75,000 house with a 10 percent down payments, this
would mean either an initial premium payment of $2,025
to $3,375, or an initial premium of $675 to $1,130 combined
with a monthly payment of $25 to $30. |
| Q-form |
| A
Q-form is series of questions that you complete in order
to request a loan. What does the Q stand for? You choose
- quality, quick, qualification, questionnaire. Our unique
Q-forms have been designed by LendingTree specifically
for the Internet to make your experience as easy as possible. |
| Quitclaim Deed |
| A
deed which transfers whatever interest the maker of the
deed may have in the particular parcel of land. A quitclaim
deed is often given to clear the title when the grantor's
interest in a property is questionable. By accepting such
a deed the buyer assumes all the risks. Such a deed makes
no warranties as to the title, but simply transfers to
the buyer whatever interest the grantor has. |
| Real Estate Broker |
| A
middle man or agent who buys and sells real estate for
a company, firm, or individual on a commission basis.
The broker does not have title to the property, but generally
represents the owner. |
| Real Estate Settlement Procedures
Act (RESPA) |
| RESPA
is a federal law that allows consumers to review information
on known or estimated settlement costs once after application
and once prior to or at settlement. The law requires lenders
to furnish information after application only. |
| Realtor |
| A
real estate broker or an associate holding active membership
in a local real estate board affiliated with the National
Association of Realtors. |
| 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. |
| Refinancing |
| The
process of the same mortgagor paying off one loan with
the proceeds from another loan. |
| Renegotiable Rate Mortgage (RRM) |
| A
loan in which the interest rate is adjusted periodically.
See Adjustable Rate Mortgage. |
| Restrictive Covenants |
| Private
restrictions limiting the use of real property. Restrictive
covenants are created by deed and may "run with the
land," binding all subsequent purchasers of the land,
or may be "personal" and binding only between
the original seller and buyer. The determination whether
a covenant runs with the land or is personal is governed
by the language of the covenant, the intent of the parties,
and the law in the State where the land is situated. Restrictive
covenants that run with the land are encumbrances and
may affect the value and marketability of title. Restrictive
covenants may limit the density of buildings per acre,
regulate size, style or price range of buildings to be
erected, or prevent particular businesses from operating
or minority groups from owning or occupying homes in a
given area. (This latter discriminatory covenant is unconstitutional
and has been declared unenforceable by the U.S. Supreme
Court.) |
| Reverse Annuity Mortgage (RAM) |
| A
form of mortgage in which the lender makes periodic payments
to the borrower using the borrower's equity in the home
as security. |
| Security |
| Property
pledged to the creditor in case of a default on a loan;
see collateral. |
| Security Interest |
| The
creditor's right to take property or a portion of property
offered as security. |
| Service Charge |
| A
component of some finance charges, such as the fee for
triggering an overdraft checking account into use. |
| Servicing |
| All
the steps and operations a lender perform to keep a loan
in good standing, such as collection of payments, payment
of taxes, insurance, property inspections and the like. |
| Settlement Costs |
| See
Closing Costs. |
| Shared Appreciation Mortgage (SAM) |
| A
mortgage in which a borrower receives a below-market interest
rate in return for which a lender (or another investor
such as a family member or other partner) receives a portion
of the future appreciation in the value of the property.
May also apply to mortgages where the borrower shares
the monthly principal and interest payments with another
party in exchange for a part of the appreciation. |
| Special Assessments |
| A
special tax imposed on property, individual lots or all
property in the immediate area, for road construction,
sidewalks, sewers, streetlights, etc. |
| Special Lien |
| A
lien that binds a specified piece of property, unlike
a general lien, which is levied against all one's assets.
It creates a right to retain something of value belonging
to another person as compensation for labor, material,
or money expended in that person's behalf. In some localities
it is called "particular" lien or "specific"
lien. Also see lien. |
| Special Warranty Deed |
| A
deed in which the grantor conveys title to the grantee
and agrees to protect the grantee against title defects
or claims asserted by the grantor and those persons whose
right to assert a claim against the title arose during
the period the grantor held title to the property. In
a special warranty deed the grantor guarantees to the
grantee that he has done nothing during the time he held
title to the property which has, or which might in the
future, impair the grantee's title. |
| Survey |
| A
measurement of land, prepared by a registered land surveyor,
showing the location of the land with reference to known
points, its dimensions, and the location and dimensions
of any building. |
| Tax |
| As
applied to real estate, an enforced charge imposed on
persons, property or income, to be used to support the
State. The governing body in turn utilizes the funds in
the best interest of the general public. |
| Term |
| The
period of time between the beginning loan date on the
legal documents and the date the entire balance of the
loan is due. |
| Term Mortgage |
| See
Balloon Payment Mortgage. |
| Title |
| A
document that gives evidence of an individual's ownership
of property. |
| Title Insurance |
| A
policy, usually issued by a Title Insurance company, which
insures a homebuyer against errors in the title search.
The cost of the policy is usually a function of the value
of the property, and is often borne by the purchaser and/or
seller. |
| Title Search |
| An
examination of municipal records to determine the legal
ownership of property. Usually is performed by a title
company. |
| Trustee |
| A
party who is given legal responsibility to hold property
in the best interest of or "for the benefit of"
another. The trustee is one placed in a position of responsibility
for another, a responsibility enforceable in a court of
law. |
| Truth-in-Lending |
| A
federal law requiring disclosure of the Annual Percentage
Rate to homebuyers shortly after they apply for the loan. |
| Two-Step Mortgage |
| A
mortgage in which the borrower receives a below-market
interest rate for a specified number of years (most often
seven or 10 years), 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 within 30 days notice at the end of seven
or 10 years. Also called "Super Seven" or "Premier"
mortgage. |
| Underwriting |
| The
decision whether to make a loan to a potential homebuyer
based on credit, employment, assets, and other factors
and the matching of this risk to an appropriate rate and
term or loan amount. |
| 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. |
| VA Mortgage Funding Fee |
| A
premium of up to 2 percent (depending on the size of the
down payment) paid on a VA-backed loan. On a $75,000 30-year
fixed-rate mortgage with no down payment, this would amount
to $1,406 either paid at closing or added to the amount
financed. |
| 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 |
| A
document signed by the borrower's employer verifying his/her
position and salary. |
| Wraparound |
| Results
when an existing assumable loan is combined with a new
loan, resulting in an interest rate somewhere between
the old rate and the current market rate. The payments
are made to a second lender or the previous homeowner,
who then forwards the payments to the first lender after
taking the additional amount off the top. |
| Zoning Ordinances
|
| The acts of an authorized local government
establishing building codes, and setting forth regulations
for property land usage. |
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