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Abstract: An abbreviation of all of the
recorded deeds, mortgages, leases and the instruments affecting
the title to a particular piece of land.
Abut: To touch or border upon. A piece of land bordering
on a street or an adjoining property is said to abut such street
or property.
Adjustable-rate mortgage:(ARM) A mortgage whose
interest rate changes over time based on an index.
Amortization: The gradual repayment of a mortgage by
installments.
Amortization schedule: A timetable for payment of a mortgage
showing the amount of each payment applied to interest and principal
and the remaining balance.
Annual percentage rate (APR): The total yearly
cost of a mortgage stated as a percentage of the loan amount;
includes the base interest rate, primary mortgage insurance, and
loan origination fee (points).
Appraise: To estimate the value of real estate.
Appraisal: A professional opinion of the market value
of a property.
Assessed Valuation: The estimated value of property for
tax purposes usually determined by the tax assessor for the particular
municipality.
Assessed value The valuation placed upon property
by a public tax assessor for purposes of taxation.
Closing :The occasion where
a sale is finalized; the buyer signs the mortgage, and closing
costs are paid. Often referred to as "settlement". The process
of completing a real estate transaction during which deeds, mortgages,
leases or other required instruments are signed or delivered.
Additionally, the accounting between parties is made, monies disbursed
and recording of all pertinent documents prepared.
Closing costs: Expenses (over and above the price of
the property) incurred by buyers and sellers in transferring ownership
of a property. Also called "settlement costs."
Commitment letter: A written agreement in which the lender
agrees to lend money if the borrower meets certain conditions.
Conventional mortgage: Any mortgage that is not insured
or guaranteed by the federal government.
Convertible ARM: An adjustable-rate mortgage
that can be converted to a fixed-rate mortgage under specified
conditions.
Conveyance: The transfer of title to property from one
person to another.
Deed: The formal written document
which transfers real property ownership rights from
the seller to the buyer. It contains an accurate, specified legal
description of the property
and is delivered at closing.
Easement: A right held by a person to
enjoy or make limited use of another's real property.
Eminent Domain: The right of a government to take privately
owned property for public purposes under condemnation proceeding
upon payment of its reasonable value.
Encumbrance: A claim, right, or lien upon the title to
real estate held by someone other than the real estate owner.
Endorsement: Rider to mortgage title insurance
required for certain types of property, I.E. condos, planned developments.
Encroachment: The extension of a structure from the real
estate to which it belongs across a boundary line and onto adjoining
property.
Escrow: The depositing of money or documents
from a real estate transaction with a neutral third party (escrow
agent), to be disbursed to the rightful party when all conditions
of the transaction have been met. Also, an account held by the
lender into which a homeowner pays money for taxes and insurance.
FHA loan: A mortgage that
is insured by the Federal Housing Administration.
Fiduciary: A person who bears a special relationship of
trust, confidence and responsibility to others, such as a trustee
or agent.
Filing: The delivery of real estate documents to a county/city
recorder for recording.
First Mortgage: A mortgage having a priority first lien
position over any other mortgage or lien on the same property.
Fixed-rate mortgage: A mortgage in which the
interest rate does not change during the entire term of the loan.
Grant: A transfer of real estate between individuals
by deed.
Hazard insurance
Insurance to protect the homeowner and the lender against physical damage to a
property from fire, wind, vandalism, or other hazards.
Homestead: Property designated by the head of a family
as his home and primary residence. Also defined as land claimed
by a settler under the National Homestead Act.
HUD: A summary of the financial portion of the real estate
transaction required by the Department of Housing and Urban Development.
Indemnity: Insurance against possible loss
or damage. A title insurance policy is a contract of indemnity.
Indenture: A deed or other real estate contract
executed between two or more parties.
Interest rate cap A provision
of an ARM limiting how much interest rates may increase per adjustment
period.
Lender's Title Insurance: An insurance policy,
which protects the lender against claims, and losses that may arise
if the title is unmarketable or defective.
Lien: The liability of real estate as security for payment
of a debt. Such liability may be created by contract, such as
a mortgage or by operation of law, such as a mechanic's lien.
Lock-in: A written agreement guaranteeing the home buyer
a specified interest rate provided the loan is closed within a set
period of time. The lock-in also usually specifies the number of
points to be paid at closing.
Marketable Title Property
is said to have marketable title when the title, or rights to
a property, has no problems or errors.
Marketable Title: A title, which a court of equity considers
to be so free of material defects and liens that it will force
acceptance by a purchaser. Also known as a merchantable title.
Market Value: The average between the highest price which
a buyer is willing to pay and the lowest price a seller is willing
to accept.
Mechanic's Lien: A lien on real estate, created by operation
of law which secures the payment of debts due to persons who perform
labor or services or furnish materials incident to the construction
of buildings and improvements on the real estate.
Mortgage broker A company that for a fee matches
borrowers with lenders.
Mortgage note A legal document
obligating a borrower to repay a loan at a stated interest rate during a specified period
of time; the agreement is secured by a mortgage.
Origination fee A fee paid to
a lender for processing a loan application; it is stated as a
percentage of the mortgage amount, or points.
Owner's Title Insurance: A policy of title insurance usually
insuring an owner of real estate against loss occasioned by defects
in, liens against or other conditions rendering the owner's title
to the property unmarketable.
Points: A one-time charge by
the lender to increase the yield of the loan; a point is 1 percent
of the amount of the mortgage.
Pre-qualification: The process of determining
how much money a prospective home buyer will be eligible to borrow
before a loan is applied for.
Principal: The amount borrowed or remaining unpaid;
also, that part of the monthly payment that reduces the outstanding
balance of a mortgage.
Purchase contract: A contract in which the buyer
agrees to purchase specific property and the seller agrees to sell
under stated conditions. Also called sales contract, binder, earnest
money contract.
Quit Claim Deed: A deed which does not imply that the
grantor hold title, but which surrenders and gives to the grantee
any possible interest or rights which the grantor may have in
the property.
Real Estate: Land, including all inherent natural attributes
and man-made improvements of a permanent nature placed thereon.
Record
Restrictions: Often called restrictive covenants. Provisions
in a deed or other instrument whereby an owner of land prohibits
or restricts certain use, occupation and improvement of the land.
Search: Exploration: of public records in an effort to
find all recorded instruments related to a particular chain of
title.
Second Mortgage: A mortgage ranking in priority immediately
below a first mortgage.
Survey: The map or plot drawing of a property.
Settlement fee: Charge
for processing of closing documents and attendance at closing
one time fee at closing.
Survey: A drawing showing the legal boundaries of a property.
Title: Title can refer
to two things: 1) the rights of ownership and possession of a
particular property. 2) the documents that show evidence to those
rights.
Title: A legal right to own, posses, use, control, enjoy
and dispose of real estate or an inheritable right or interest
therein.
Title: The aspects of title, which appear in the public
records, as distinguished from unrecorded title aspects and interests.
Title company A company that specializes in insuring title to
property.
Title Insurance Insurance to protect the lender (lender's
policy) or the buyer (owner's policy) against loss arising from
disputes over ownership of a property.
Title search A check of the title records to ensure that
the seller is the legal owner of the property and that there are
no liens or other claims outstanding.
VA loan A loan that is guaranteed by
the Veterans Administration.
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