| Abstract
of Title : |
| A
written history of ownership of a piece of land or real
property summarizing the ownership and any occurrence
of liens affecting the property |
| Acre
: |
| A
unit of measure for land, or 43,560 square feet. |
| Act
Of God : |
| An
event which causes damage by nature such as a flood,
earthquake, or winds; an occurrence which was not caused
by man. (Generally not covered by homeowners insurance.) |
| Addendum
: |
| An
agreement or exhibit that is added to a contract, agreement,
or other document. |
| Adjustable
Rate Mortgage (ARM) : |
| A
mortgage in which the interest rate is adjusted periodically,based
on a pre-selected index.This may
cause payments to go up or down accordingly. |
| Adjustment
Date : |
| The
date of periodic interest rate or payment adjustments
for ARM loans. |
| Adverse
Action : |
| When
a borrower is denied a loan in the amount or on the
terms they requested. |
| Affidavit
: |
| A
sworn statement in writing, usually requiring notarization.
Frequently required at loan closings. |
| Aggregate
Escrow Adjustment : |
| The
aggregate escrow adjustment (or aggregate accounting
adjustment) is a change/credit to the client and increases/decreases
the total amount of money for all escrows combined (e.g.,
taxes, hazard insurance, private mortgage insurance)
that must be placed in escrow at closing. The adjustment
ensures that the escrow account, when reaching its lowest
level during the year, will not contain more/less than
the allowable cushion selected by the lender (usually
two months). |
| Alimony
: |
| An
allowance for support made under court order from one
party to another usually after a legal separation or
divorce. |
| Amortization
: |
| Payments
consisting of both principal and interest which, when
collected as scheduled, will repay the principal amount
of a mortgage by the end of the loan term. |
| Amortization
Schedule: : |
| A
table showing the amounts of principal and interest
due at regular intervals for the term of the loan and
the unpaid principal mortgage balance after each payment
is applied. |
| Annual
Percentage Rate (APR) : |
| A
measure of the cost of credit, expressed as a yearly
rate. It includes interest as well as certain other
charges. Because all lenders follow the same rules to
ensure the accuracy of the annual percentage rate, it
provides consumers with a good basis for comparing the
cost of obtaining loans. |
| Appraisal
: |
| An
opinion or estimate of the value of a property. |
| Application
Fee : |
| A
fee required at the time of application to begin processing
the loan application |
| Appraiser
: |
| A
person qualified by education, training, and experience
to estimate the value of real and personal property. |
| Appreciation
: |
| An
increase in value for any reason except inflation. |
| Arrears
: |
| When
mortgage interest is paid at or after the end of the
accrual period. |
| Assessment
(Tax Assessment) : |
| A
value factor assigned to real property and used to determine
real property taxes. |
| Assessor
(Tax Assessor) : |
| A
local public official who appraises taxable property
to determine its assessed valuation for purposes of
calculating real estate taxes. |
| Asset
: |
| A
property or right owned, tangible or intangible, that
has monetary value. |
| Assignment
: |
| The
transfer of ownership, rights, or interests in property
(i.e., mortgage or deed of trust). |
| Association
: |
| The
group or board that has been elected or hired to manage
the affairs of a group of homeowners. Reviews and approves
all modifications and variances to the bylaws of the
group. Generally found in condominiums and planned unit
developments (PUD). |
| Association
Dues : |
| A
fee collected by the association (generally monthly)
to fund common interests and liabilities. Some of the
items that may be covered are maintenance, property
taxes on common areas, administrative costs, and etc. |
| Assumption
(Assumable) : |
| Taking
over another person's loan and becoming responsible
for its repayment. |
| Attached
Garden/Patio Home : |
| A
row house, in a city, on a small lot that has exterior
limits common to other similar units. Title to the unit
and lot is vested in the individual owner with a shared
interest in common areas, if any. |
| Average
rate of return : |
| The
return on an investment as calculated by averaging the
total cash flows over the years during which the cash
flows are received by the investor. |
| Balloon
Mortgage : |
| A
short term, fixed- or adjustable-rate mortgage that
has payments that do not fully amortize over the term
of the loan. The balance of the mortgage is due in a
lump sum at a specified date at the end of the term.
|
| Balloon
Payment : |
| A
scheduled payment on a mortgage that is larger than
other periodic payments, usually the unamortized final
payment; short-term, fixed- or adjustable-rate loan
that has small payments for a specified period of time
and one large payment for the remaining amount of principal
at a time specified in the promissory note. |
| Bankruptcy
: |
| A
provision of federal law that allows a debtor to surrender
assets to the bankruptcy court and be relieved of the
future obligation to repay unsecured debt. After bankruptcy,
the debtor is discharged and unsecured creditors may
not pursue further collection efforts. While bankruptcy
is pending, secured creditors (those holding collateral,
deeds of trust or judgment liens) continue to have security
interests in the property, but may not take other actions
to collect from the debtor. |
| Beneficiary
: |
| A
person who benefits from a will, contract, or deed of
trust. |
| Binder
(Earnest Money): : |
| A
preliminary agreement between a buyer and seller which
includes the price and terms of the fully executed contract
of sale. Also the commitment to issue a permanent insurance
policy. |
| Blanket
Mortgage : |
| A
mortgage that covers more than one piece of property
under one instrument. |
| Borrower
: |
| One
who receives funds in the form of a loan with the obligation
of repaying the loan in full with interest. The borrower's
name must appear on the mortgage and promissory note. |
| Bridge
Financing : |
| Financing
a home that is pending sale or under contract to obtain
funds needed to build or purchase a new home. |
| Buydown
: |
| Where
you pay an amount, generally a percentage of the loan,
to receive a lower rate and lower payments. |
| Buyer’s
Attorney Fee : |
| A
fee for the cost of having an attorney represent the
client at closing.Required in certain states. |
| Call
Provision : |
| The
clause in the loan note that allows the lender to demand
repayment of the balance of the loan in the event of
a breach of specified terms or conditions. |
| Capital
Gains Tax : |
| A
tax on the gain (income) from the sale of a capital
asset, such as a second home, property or securities.
The capital gains tax usually does not apply to the
sale of your homestead or primary dwelling. |
| Capital
Expenditures : |
| The
last three years records of capital expenditures, including
the items and the amounts required, for commercial loans. |
| Caps
(interest-rate caps) : |
| A
limit on the amount that an interest rate or monthly
payment may change at each adjustment or during the
life of the mortgage on an adjustable-rate mortgage.
|
| Cash
Down Payment : |
| The
money paid to make up the difference between the purchase
price and mortgage amount. Usually 10 to 20 percent
of the sales price on a conventional mortgage. |
| Cash
Management Account® (CMA): : |
| A
centralized asset account, combining checking, VISA®
card, money market funds and brokerage capabilities.
|
| Cash-Out
Refinancing : |
| When
the principal amount of a new mortgage involved in refinancing
is greater than the principal amount outstanding of
the existing mortgage being refinanced plus related
closing costs on the new mortgage. |
| Certificate
of Eligibility : |
|
Buyer program that includes issuance of a certificate
indicating the maximum loan amount for which you are
pre-qualified. |
| Certificate
of Occupancy : |
| Written
authorization given by a local municipality that allows
a newly completed or substantially renovated structure
to be inhabited. |
| Child
Support : |
| An
allowance, made under court order, from one person to
another to provide for the rearing of a child. |
| City
Taxes at Closing : |
| A
tax charged by certain cities based on the amount of
the home mortgage recorded |
| City/Tax
Stamps : |
| A
tax charged by certain states and counties based on
the amount of the home mortgage recorded. Stamps are
issued in the mortgage amount and are affixed to the
mortgage document prior to recording. |
| City/Township
Tax Escrow : |
| Depending
on the city/township in which the property is located,
this amount is collected by the lender at closing to
fund the city/township tax escrow account. The funds
collected at closing will be combined with the monthly
amount collected (1/12th of the annual bill amount)
to pay the client's city/township tax bill when it comes
due. |
| ClearTitle
: |
| Unencumbered
ownership of real property, free of liens or defects.
|
| Closed-End
Mortgage : |
| A
mortgage that does not allow the mortgagor to borrow
additional funds after the closing. |
| Closing
: |
| The
meeting between the buyer, seller and lender or their
agents where the property and funds legally change hands
and the mortgage documents are executed. |
| Closing
Costs : |
| Fees
paid to effect the closing of a mortgage, such as an
origination fee, title insurance fees and attorneys
fees. |
| Closing
Agent (a.k.a. Escrow Agent in CA and NV) : |
| The
person(s) who witness and facilitates the execution
of the loan closing documents. |
| Closing
Documents/Package: : |
| The
papers you sign at closing to perfect the lender's lien
on the property. |
| Closing
Fee : |
| This
fee covers the Lender's cost of preparing for closing.
This is a flat fee and not based on the loan amount.
|
| Closing
specialist : |
| An
employee who is responsible for loans at the time of
closing. This person schedules the closing and sends
the appropriate closing documents to the Closing Agent.
After closing, the Closing Specialist is responsible
for verifying that all closing conditions were met.
|
| CMA
Sub-account : |
| A
sub-account linked to the central CMA® account. For
example, the securities pledged for Mortgage 100SM would
be held in such an account. |
| CMT
(1-year Constant Maturity Treasury): : |
| The
weekly average yield on United States Treasury Securities
adjusted to a constant maturity of one year as published
by the Federal Reserve Board in publication number H.15.
|
| Co-borrower
: |
| A
second borrower who signs a mortgage loan with the borrower.
The co-borrower's income, assets, and debts are combined
with the borrower's for underwriting and ratio analysis
purposes. The co-borrowers name must appear on the mortgage
note. |
| Collateral
: |
| Property,
securities or capital pledged to secure a loan or line
of credit. |
| Color
Photographs : |
| Recent
color photographs (within the last 6 months) of the
property's interior and exterior which are required
to provide a preliminary overview of the characteristics
of the property. |
| Combined
Loan-to-Value (CLTV): : |
| The
ratio of mortgage amount for combined mortgage balances
to appraised value or sales price of real property;
combined balances of all mortgages versus the value
of your property. |
| Comparables
: |
| Properties
used for comparative purposes in the appraisal process
that have similar characteristics to the subject property.
|
| Commercial
Investment Property : |
| A
property zoned or used for commercial or business purposes,
as well as multi-family housing with more than four
units. |
| Commercially
: |
| Pertaining
to business, used for a business purpose when referring
to real estate |
| Commission
: |
| A
fee paid for services rendered. For salespeople generally
expressed as a percentage of sales or revenues for services
or products sold. |
| Commitment
Letter : |
| A
lender's written offer to grant a mortgage loan, which
outlines the loan terms, principal amount, interest
rate and any conditions that must be met prior to closing
the loan. |
| Commitment
Fee : |
| Fee
charged by a lender to cover the cost of handling the
application and credit investigation relating to a loan
application. The fee is often expressed as a percentage
of the face value of the loan |
| Community
Property : |
| A
form of ownership in some states under which property
acquired during a marriage is presumed to be owned jointly
unless; acquired as separate property of either spouse,
purchased prior to the marriage, received as a gift
or from an inheritance. |
| Conditional
Commitment : |
| An
agreement to lend money to a borrower subject to the
conditions set forth in the commitment |
| Condominium
: |
| A
system of individual, fee simple ownership of a unit
in a multi-unit structure, combined with joint ownership
of common areas. Each individual may sell or encumber
his/her own unit. |
| Conforming
Mortgage Loan : |
| A
mortgage loan which meets all requirements to be eligible
for securitization by federal agencies such as the Federal
National Mortgage Association (FNMA) and Federal Home
Loan Mortgage Corporation (FHLMC). |
| Construction
Loan Draw : |
| A
partial disbursement of a construction loan based on
the schedule of payments in the Construction Loan Agreement. |
| Construction-to-Permanent
Mortgage Program : |
| A
mortgage loan program that can fund the construction
phase and then convert to a permanent mortgage with
just one closing. |
| Contingency
: |
| A
clause in a contract that requires the completion of
a certain act or the occurrence of a certain event before
the contract is binding. |
| Contract
: |
| A
standardized agreement obligating two parties to a transaction
at a price and time specified. |
| Contract
of Sale: : |
| A
written document in which the purchaser agrees to buy
certain real estate or personal property and the seller
agrees to sell under stated conditions. |
| Contractor
: |
| A
person or company who agrees to do work for a contracted
price. The contractor often hires subcontractors to
perform specialized work. |
| Conventional
Financing : |
| Mortgage
financing which is not insured or guaranteed by a government
agency such as FHA or VA. |
| Conversion
Option : |
| A
provision in some adjustable-rate mortgages (ARMs) that
allows you to change the ARM index or even convert to
a fixed rate-loan at some point during the term. The
conversion to a fixed rate feature generally requires
an additional cost. |
| Conversion
Conditions : |
| A
pre-determined set of conditions that must be met to
allow the conversion from an adjustable-rate to a fixed-rate
loan, or to change the index upon which adjustable-rate
payments are based. |
| Convey
: |
| The
act of transferring title to real property from one
party to another. |
| Coop
Association : |
| The
group or board that has been elected to manage the affairs
of the coop building. Reviews and approves all prospective
buyers prior to completion of the sale of shares. |
| Cooperative
(Co-op) : |
| A
form of multiple ownership in which a corporation or
business trust holds title to a property (usually an
apartment complex) and grants occupancy rights to shareholder
tenants through proprietary leases. |
| Corporation
(C Corp.) : |
| A
corporation is considered an artificial person under
law. The debts of the corporation are paid out of the
assets of the corporation and neither the shareholders,
directors, nor officers of the corporation are personally
liable for the debts of the corporation. |
| Correspondent
: |
| A
specialized type of mortgage lender whose loans are
originated to sell to other mortgage bankers or investment
bankers. |
| Counter-Offer
: |
| When
the lender offers to grant credit other than in the
amount or on the terms requested by the applicant |
| County
Taxes At Closing : |
| A
tax charged by certain counties based on the amount
of the home mortgage recorded |
| County
Tax Escrow : |
| Depending
on the county in which the property is located, this
amount is collected by the lender at closing to fund
the county tax escrow account. The funds collected at
closing will be combined with the monthly amount collected
(1/12th of the annual bill amount) to pay the client's
county tax bill when it comes due |
| County
Tax/Stamps : |
| A
tax charged by certain states and counties based on
the amount of the home mortgage recorded. Stamps are
issued in the mortgage amount and are affixed to the
mortgage document prior to recording. |
| Credit
Report : |
| A
report to a prospective lender on the credit standing
of a prospective borrower, used to aid in determination
of creditworthiness. |
| Debt-to-Income
Ratio (DTI): : |
| A
percentage derived by dividing the borrower's monthly
payment obligations by his or her net or gross monthly
income. Also called obligation-to-income. |
| Deed
: |
| A
written document conveying real property from one party
to another. Once recorded at the courthouse, the original
piece of paper (deed) is not needed to convey title
in the future. |
| Deed-in-Lieu
: |
| A
deed given by a borrower to satisfy a debt and avoid
foreclosure. |
| Deed
of Trust : |
| A
type of security instrument in which the borrower conveys
title to real property to a third party (trustee) to
be held in trust as security for the lender. Typically,
includes a provision indicating the trustee shall re-convey
the title upon payment of the debt, and conversely,
has the right to sell the land and pay the debt in the
event of a default by the borrower. |
| Default
: |
| A
breach or failure to perform the terms of a note or
mortgage. |
| Defeasance
: |
| When
the borrower posts risk-free collateral (in the form
of direct, non-callable securities backed by the full
faith and credit of the United States government) that
will provide sufficient cash flow to make the remaining
loan payments, including any balloon payment. Enables
the lender to release the lien against the mortgaged
property prior to the agreed upon maturity date. |
| Delinquency
: |
| Failure
to make monthly payments on time per the loan note.
This can lead to foreclosure. |
| Depreciation
: |
| A
decline in value of real estate, resulting from age,
physical wear, and economic or functional obsolescence |
| Developer
: |
| A
person or entity who prepares raw land for building
sites or rehabilitates existing buildings. |
| Disbursements
: |
| Periodic
payments of monies. Used to describe construction loan
draws. |
| Disclosure
: |
| Information
relevant to specific transactions that is required by
law. |
| Discount
Points : |
| Upfront
fee equal to a percentage of the principal loan amount
which enables a borrower to buy down the interest rate.
|
| Dividend
: |
| A
stockholder's share of profits of a corporation. |
| Document
Preparation Fee : |
| This
fee is charged to cover the cost for the preparation
of all closing documentation required to perfect the
lien to ensure the collateral for the loan. |
| Down
Payment : |
| The
money paid to make up the difference between the purchase
price and mortgage amount. Usually 10 to 20 percent
of the sales price on a conventional mortgage. |
| Draw
: |
| Periodic
advances of funds according to the schedule of payments
in a construction loan. |
| Due
on Sale Clause (Non-assumption clause): : |
| A
mortgage clause that forbids the assumption of the mortgage
by another party without the lender's approval. |
| Earnest
Money : |
| A
sum of money given to bind a sale of real estate (a
deposit). |
| Effective
Age : |
| For
purposes of an appraisal, the physical age given to
a building based on its present condition, which may
differ from the actual age. |
| Endorsements
: |
| A
provision added to an existing title policy to modify
or clarify its coverage. |
| Equity
: |
| The
value an owner has in real estate over and above the
obligation against the property. For example, if you
had a home valued at $100,000 and owed $30,000 on the
mortgage loan, you would have equity of $70,000. Net
ownership. |
| Endorser
: |
| To
acknowledge or give approval of by signing. |
| Escrow
(a.k.a. reserves or impounds) : |
| An
item of value (money) deposited with a third party to
be delivered upon fulfillment of a condition. For example
the deposit by a borrower with a lender of funds to
pay taxes and insurance premiums when they become due.
|
| Escrow
Account : |
| The
account in which funds collected by the lender in advance,
usually on a monthly basis for the payment of real estate
taxes and/or insurance are held. (In CA and NV see impounds)
|
| Escrow
Agent : |
| A
person or entity who has a fiduciary responsibility
to both the buyer and seller (or lender and borrower)
to see the terms of the loan are carried out. |
| Escrow
Fee : |
| Amount
collected by the escrow agent for serving as trustee
for the funds and documents necessary to complete the
transaction until such time as the contingencies of
the agreement have been met. The escrow fee is normally
based on the size and complexity of the transaction. |
| Estimated
Market Value : |
| What
a person believes his/her house is worth. This estimate
is used to determine the initial loan-to-value ratio.
The appraised value or sales price is generally considered
the real market value. |
| Expected
Return on Investments : |
| Your
estimated average rate of return for your investments
over the Holding Period. Simulate an expected rate of
return to show how investing monthly payment savings
and/or down payment can potentially increase net worth.
Assume a 0% rate of return if you will not invest savings
in an investment vehicle. |
| Explain
any engineering or environmental issues : |
| associated
with the property or the immediate area. Describe any
plans for renovations or addressing deferred maintenance
items. Is there a "story" that goes with the property's
economics? If so, please provide it. If this is an acquisition,
please state the purchase price, deal contingencies
and enclose a copy of the applicable purchase agreement.
|
| Fair
Market Value : |
| The
price agreed upon by a buyer and seller to transfer
real property, neither being under any compulsion to
sell. |
| Federal
Home Loan Mortgage Corporation (FHLMC): : |
| A
corporation created by Congress to support the secondary
market in mortgages on residential property, also called
Freddie Mac. |
| Federal
Housing Administration (FHA) : |
| A
federal agency that provides mortgage insurance for
residential mortgages and sets underwriting standards. |
| Federal
National Mortgage Association (FNMA): : |
| A
corporation established by Congress to support the secondary
market in mortgages on residential property, also called
Fannie Mae. |
| Fee
Simple : |
| The
greatest possible interest a person can hold in real
estate providing them the right to sell the property
or pass it on to their heirs. |
| Fiduciary
: |
| Acting
in the trust or confidence of another. |
| Final
Inspection Fee : |
| A
fee associated with an inspection of the property to
verify completion as described. Usually associated with
new construction. |
| Finance
Charge : |
| A
term defined in the federal Truth in Lending Act which
generally includes all charges payable as a result of
an extension of a loan. |
| First
Mortgage : |
| A
mortgage in first lien position which has rights over
all other liens on the real property. |
| Fixed-Rate
Mortgage : |
| A
mortgage loan with a set interest rate and payment amount
for the entire term of the loan. |
| Fixed-to-Adjustable-Rate
Mortgage : |
| A
fully amortized 30-year adjustable-rate mortgage with
an initial fixed-rate period of 3, 5, 7, or 10 years.
The 5-, 7-, and 10-year fixed-to-adjustable-rate mortgages
are available with interest only or amortizing payments
during the fixed-rate period. |
| Flexible
Credit : |
| An
account that allows you to borrow against existing investments
and Certificates of Deposit (CDs). This account allows
the borrower to access funds while eliminating the need
to liquidate the collateral. |
| Flood
Certification : |
| A
certification that a property is or is not located in
a flood plain. The certificate is issued by Flood Data
Services Incorporated (FDSI) and is required by law
for a mortgage. |
| Flood
Insurance : |
| Coverage
that provides compensation to the insured in case of
property loss or damage from rising water. |
| Flood
Insurance Escrow : |
| The
amount collected by the lender at closing to fund the
escrow account. The funds collected at closing will
be combined with the monthly amount collected (1/12th
of the annual bill amount) to pay the client’s flood
insurance premium when it comes due |
| Flood
Insurance Premium : |
| Premium
for coverage that provides compensation to the insured
in case of property loss or damage from rising water.
|
| Foreclosure
: |
| A
legal procedure terminating all rights of the mortgagor
in the property covered by a mortgage generally as a
result of default. The property is then sold to repay
the mortgage debt. |
| Fully
Executed Contract of Sale : |
| A
written document in which the purchaser agrees to buy
certain real estate or personal property and the seller
agrees to sell under stated conditions, which has been
signed by all parties involved and notarized if required.
|
| Funding
: |
| The
actual disbursement of funds that generally takes place
at the loan closing |
| Future
Capital Contributions : |
| The
requirement of a shareholder/partner to provide additional
funds towards a business entity. Sometimes based on
a contractual commitment (e.g., an investor guarantees
to pay $10,000 per year for five years until the business
is up and running). |
| General
Contractor : |
| The
person or company that is responsible for supervising
the construction or development of a property based
on the terms of the construction contract. The general
contractor often uses subcontractors to do specialized
work |
| General
Partner : |
| The
partner(s) in a partnership who is liable for all debts
and obligations of the partnership. The general partner
usually controls the operations of the business and
can take actions on behalf of the partnership |
| Gifting
: |
Providing
funds as a gift to satisfy part of the cash requirement
for closing; only allowed when the donor (giver) is a
relative. A relative is defined as the borrower's spouse,
child or dependent, or any other individual related to
the borrower by blood, marriage, adoption, or legal guardianship.
The gift must be evidenced by a letter which is signed
and dated by the donor, and must include the following:
- The
specific dollar amount of the gift and the date
the funds were transferred.
- The
donor's name, address, telephone number and relationship
to the applicant/borrower.
- The
donor's statement that no repayment is expected.
|
| Good
Faith Deposit : |
| A
fee required at the time of application to begin processing
the loan application. |
| Good
Faith Estimate (GFE): : |
| An
estimate provided to the borrower that details closing
costs and fees required to secure the mortgage, such
as points, related fees and costs for third-party reports,
such as flood determination or tax service fees. |
| Grace
Period : |
| The
time allowed after your monthly payment is due before
assessing a late fee. |
| Ground
Lease : |
| A
lease of land only. The person living in the home may
own the home but has a lease for the property on which
the home sits that extends beyond the term of the mortgage |
| Guarantee
Amount : |
| The
amount of eligible securities designated as additional
collateral for any amount exceeding the standard maximum
loan-to-value with Mortgage 100 or Parent Power. |
| Hazard
Insurance Escrow : |
| The
amount collected by the lender at closing to fund the
escrow account. The funds collected at closing will
be combined with the monthly amount collected (1/12th
of the annual bill amount) to pay the clients hazard
insurance premium when it comes due. |
| Hazard
Insurance : |
| Coverage
that provides compensation to the insured in case of
property loss or damage. |
| Hazard
Insurance Reserves : |
| The
amount collected by the lender at closing to fund the
escrow account. The funds collected at closing will
be combined with the monthly amount collected (1/12th
of the annual bill amount) to pay the clients hazard
insurance premium when it comes due. |
| Holding
Period : |
| The
length of time you intend to live in the subject property
or hold the mortgage on the subject property. |
| Home
Equity Line of Credit (HELOC) : |
| A
revolving line of credit secured (collateralized) by
your home. |
| Homeowners
Association : |
| The
group or board that has been elected or hired to manage
the affairs of a group of homeowners. Reviews and approves
all modifications and variances to the bylaws of the
group. Generally found in condominiums and planned unit
developments (PUD). |
| Homeowners
Policy : |
| Insurance
available to owners of private dwellings which covers
the dwelling and its contents. |
| Homestead
Exemption : |
| An
allowance offered to homeowners for their primary residence
in some states that affords a break on property taxes.
|
| HUD-1
Settlement Statement : |
| A
financial disclosure giving an account of all funds
received and disbursed at closing, including escrow
deposits for taxes and hazard insurance, and mortgage
insurance |
| Hypothetical
Interest Rate : |
| With
the Mortgage Comparison Calculator you may compare the
initial interest rate of another company's mortgage
product. If you have an existing mortgage, run comparisons
using your current interest rate and applicable loan
amount. |
| Immediate
Family: |
| A
person's spouse, parents, children, siblings, mothers-
and fathers-in-law, sons- and daughters-in-law, and
brothers- and sisters-in-law. It also includes any person
who during the period in question was, but no longer
is, a member of your immediate family. |
| Impounds
: |
| Funds
collected by the lender in advance, usually on a monthly
basis for the payment of real estate taxes and/or insurance.
Also known as escrow or reserves. |
| Improvements
: |
| Additions
to land or dwellings that improve their value. |
| Income
: |
| The
amount of money received over a period of time in exchange
for labor or services rendered. |
| Index
: |
| A
published interest rate, such as the prime rate, London
Interbank Offered Rate (LIBOR), or 1-year Constant Maturity
Treasury (CMT). |
| Ingress
and Egress : |
| The
right to enter and exit land, respectively. |
| Initial
Truth In Lending Statement: : |
| Full,
written disclosure of credit terms and conditions including;
the finance charge, annual percentage rate, and other
charges incurred in the loan contract provided to the
borrower as required by Regulation Z. |
| Insured
Closing Protection Letter : |
| A
letter issued by the title insurance company that protects
the mortgagee against embezzlement or failure to follow
the conditions for closing set forth by the lender. |
| Interest
: |
| Consideration
in the form of money paid for the use of money, usually
expressed as a percentage. Also a right or share in
a property. |
| Interest
Rate : |
| An
agreed upon sum, usually expressed as a percentage,
to be paid in the form of money for the use of funds.
|
| Interest-only
: |
| A
feature of some Mortgage and Credit programs that allows
the borrower to pay only the interest on a loan, without
paying down the principal with each monthly payment. |
| Investor
: |
| A
person or company that commits money or capital to gain
future profit or interest. |
| Irrevocable
Trust : |
| A
Trust that was established with a clause that makes
it incapable of being revoked or withdrawn. |
| Joint
Tenancy : |
| Form
of ownership where the owners have equal shares or rights
in the property including the right of survivorship.
|
| Jointly
Owned Property : |
| Title
is held in the name of more than one person. |
| Judgment
: |
| A
final court determination as to the rights and claims
of the parties to an action. |
| Judgment
Lien : |
| A
judgment that results in a lien upon property of the
debtor until restitution is made. |
| Jumbo
Loan : |
| A
loan that is larger than the limits set by the Federal
National Mortgage Association and the Federal Home Loan
Mortgage Corporation. Jumbo loans may carry a higher
interest rate than loans below this limit. |
| Late
Fee : |
| The
fee charged to the borrower if the lender has not received
the agreed upon monthly payment by the last day of the
agreed upon grace period. |
| Lawsuit
: |
| A
case brought before a court for judgement. |
| Lease
: |
| A
written agreement containing the terms for the possession
and use of real property for a set period of time. |
| Legal
Description : |
| Property
description recognized by law. Generally consists of
a metes and bounds, description or reference to a subdivision
plat, which enables the property to be located without
oral testimony. |
| Lender
: |
| The
entity that offers the mortgage loan, also called the
mortgagee or creditor. |
| Lender's
Attorney Fee : |
| These
fees are paid to attorneys for legal services rendered
in connection with the mortgage transaction. |
| LIBOR
(London Interbank Offered Rate) : |
| The
rate at which foreign banks lend dollars to one another.
Considered one of the most important barometers of the
international cost of money. This rate can be based
on a one- or six-month index and is published daily
in The Wall Street Journal "Money Rates" table. |
| Lien
: |
| A
legal hold or claim of a creditor against the property
of another as security for a debt. |
| Lien
Waiver : |
| A
waiver of mechanic's lien rights which states the firm
has been compensated for its work. Generally required
when a lender finances a property after construction
has begun. |
| Lifetime
Cap : |
| The
highest interest rate of an adjustable-rate mortgage
(ARM). Generally, your initial rate plus a margin disclosed
in your mortgage note. |
| Limited
Partnership : |
| A
form of business entity that has one or more general
partners, who are fully liable, and one or more limited
partners, who have liability only for the amount of
their investment |
| Limited
Liability Company (LLC): : |
| Is
an entity formed under state law and is owned by members
who are not personally liable for the companies debts
or obligations. An LLC can be classified as a partnership
for federal tax purposes and file form 1065 returns.
Generally a holder of real estate. |
| Liquidate
: |
| To
convert an asset into cash. For example, to sell real
estate or stocks. |
| Liquidity
: |
| The
amount of assets or investments that may readily be
converted to cash |
| Listing
: |
| A
fully executed agreement authorizing an agent to offer
real estate for sale. |
| Listed
for Sale : |
| A
property which is currently on the open market for sale.
Generally a realtor has a signed agreement to show the
property to interested parties. |
| Loan
Administration : |
| The
department responsible for servicing the loan after
it is closed. This includes services such as collection
of payments, management of escrow accounts and interest
rate adjustments. |
| Loan
Closing : |
| The
meeting between the lender and the borrower, or their
agents, where the funds legally change hands. |
| Loan
Consultant : |
| A
specialist whose job is to help you decide which Home
Financing Solution is right for you. They can help you
complete an application over the phone and begin the
Loan Approval process. When possible, they will conditionally
approve your loan over the telephone and forward it
to a Loan Counselor for further processing. |
| Loan
Counselor : |
| A
dedicated specialist who works with you through the
processing and closing of your loan. |
| Loan
Guarantee : |
| The
amount of eligible securities designated as additional
collateral for any amount exceeding the standard maximum
loan-to-value with Mortgage 100SM
or Parent Power SM . |
| Loan
Servicing : |
| The
department responsible for servicing the loan after
it is closed. This includes services such as collection
of payments, management of escrow accounts and interest
rate adjustments. |
| Loan-to-Value
Ratio (LTV) : |
| The
relationship, expressed as a percentage, between the
principal amount of a loan and the appraised value or
sales price (whichever is lower) of the asset securing
the loan. For example, a $50,000 loan on a $100,000
house would have a loan-to-value ratio of 50 percent.
|
| Lock-in
Period : |
| The
length of time the lender will hold or reserve a specific
rate if the loan is closed within this period. See also
rate lock. |
| Loss
Draft : |
| A
draft from an insurance company to reimburse the insured
for damage to property. Generally made out to the both
the borrower and the lender. |
| Loss
Payee Clause : |
| The
clause required by lenders to be placed on borrowers'
homeowner's insurance to protect the lender's interest
in case of property damage. |
| Lot
: |
| A
piece of land having identified boundaries. |
| Maintenance
Call : |
| A
request for the deposit of additional Eligible Securities
when a Pledge Account drops below the Pledge Maintenance
Level. |
| Maintenance
Tax : |
| A
tax charged by local government. |
| Managing
Agent : |
| A
person or company hired by the owner(s) of a property
to maintain and manage the property on behalf of the
owner. |
| Mansion
Tax : |
| A
tax of 1% of the purchase price payable to New York
State on homes exceeding $1 million |
| Manufactured
Home : |
| Factory-built
or pre-fabricated homes (includes mobile homes) |
| Margin
: |
| (1)
In mortgages, the amount (spread) the lender adds to
the index to establish the ARM interest rate. (2) In
stock transactions, the amount or cushion required to
be maintained in your account when borrowing against
your current asset account to purchase additional securities.
Usually expressed as a percentage of the purchase price
or market value. |
| Margin
Call : |
| A
request for the deposit of additional funds or collateral
to offset trading losses on an outstanding position
in an asset account that is subject to margin |
| Market
Value : |
| The
highest price that a buyer will offer and the lowest
price that a seller will accept, neither one being compelled
to buy or sell. |
| Maturity
Date : |
| The
agreed upon date when the term of a loan ends. |
| Mechanics
Lien : |
| A
lien filed by a construction contractor to secure payment
for work performed. |
| Metes
and Bounds : |
| A
legal description of boundaries for a parcel of land
defined by direction and distance. |
| Modification
Agreement : |
| An
agreement between the borrower and the lender to change
the terms of the mortgage loan. |
| Modification
and Consolidation (Mod & Consod) : |
| An
agreement between the borrower and the lender to change
the terms of an existing mortgage loan to incorporate
the terms of a new one, including the advance of additional
principal. |
| Monthly
Alimony : |
| The
monthly portion of alimony received annually (e.g.,
if a person receives $1200 annual alimony they receive
$100 in monthly alimony). |
| Monthly
Child Support : |
| The
monthly portion of the allowance, made under court order,
from one person to another to provide for the rearing
of a child (e.g., if a person receives $1200 annual
child support they receive $100 in monthly child support).
|
| Monthly
Rental Income : |
| The
monthly portion of rent received annually (e.g., if
a person receives $1200 annual rental income they receive
$100 in monthly rental income). |
| Monthly
Salary : |
| The
monthly portion of salary received annually (e.g., if
a person receives $12,000 annual salary they receive
$1,000 in monthly salary). |
| Mortgage
: |
| A
pledge of property as security for a debt in the form
of a lien placed on the borrower's property, as collateral
for a loan. If the borrower defaults on the loan the
lender has the ability to sell the property to satisfy
the loan. |
| Mortgage
Balance : |
| The
unpaid balance of a loan, excluding interest. |
| Mortgage
Broker : |
| An
individual or corporation who matches borrowers and
lenders for a commission. |
| Mortgage
Insurance (MI) : |
| Insurance
protecting the lender against loss in the event of nonpayment
by the borrower. This protection enables lenders to
make loans on purchase transactions with lower down
payments. |
| Mortgage/Intangible
Tax : |
| A
tax assessed by certain states, cities or counties on
newly recorded mortgages. The amount of tax is based
on the mortgage amount |
| Mortgagee
: |
| The
lender in a transaction secured by a mortgage. |
| Mortgage
Tax : |
| The
tax assessed by certain counties and certain states
on recorded mortgage balances. |
| Mortgagor
: |
| The
borrower in a transaction secured by a mortgage. |
| Multi-family
(2-4 units) : |
| A
residential property that has more than one unit, each
designed as a single housing unit containing a kitchen
and bathroom. (i.e., duplex, triplex). |
| Negative
Amortization : |
| A
loan where the required payments do not cover the interest
due on the loan. When the remaining interest is added
to the principal balance, the loan amount increases. |
| Net
Rental Income : |
| The
remaining income from rents after all expenses have
been deducted. |
| Net
Worth : |
| The
value of all of your assets, including cash, minus your
total liabilities. |
| Non-Retirement
Securities : |
| Publicly
traded stocks, bonds, mutual funds, money markets, and
CDs that are not part of a retirement account,
such as a 401(k), IRA, Roth IRA or Keogh. |
| Notary
Fee : |
| The
fee required to have a legal document notarized by a
Notary Public. |
| Note
(promissory or mortgage note) : |
| A
legal document agreed to by the borrower and lender
acknowledging the debt and outlining the terms for repaying
the loan to the lender on specified dates. A promise
to pay. |
| Obligation
to Income Ratio (OTI) : |
| A
percentage derived by dividing a borrower's monthly
payment obligations by his or her net or gross monthly
income. Also called debt-to-income. |
| Obsolescence
: |
| Loss
of value from lack of features common to the area (e.g.,
no central heat in a northern city where it is common).
|
| Occupancy
Rate : |
| The
percentage of units occupied. |
| Open-End
Mortgage : |
| A
mortgage where it is agreed the loan amount may be increased
or reused. |
| Origination
Fee : |
| Fee
charged by a lender to cover the cost of handling the
application and credit investigation relating to a loan
application. The fee is often expressed as a percentage
of the face value of the loan. |
| Other
Fee : |
| A
fee that is assessed based on either business-specific
or state-specific requirements that does not fit into
the existing line items on the Good Faith Estimate of
Settlement Costs. A further explanation may be obtained
from your Loan Counselor. |
| Other
Tax Escrow : |
| Lender
will collect taxes in advance to ensure that there is
enough money in the escrow account to pay the taxes
in full when due. The amount collected at closing depends
on where the property is located and which month the
loan closes. |
| Over-Improvement
: |
| When
a property is remodeled or renovated to a disproportionate
size, or at a cost that is disproportionate to the value
of comparable properties in a neighborhood. |
| Owner-Occupied
: |
| A
property where the owner maintains at least one unit
of the property for his or her personal use. |
| Owners
Policy : |
| Title
insurance for the owner of the property, rather than
the lien holder. |
| Partnership
: |
| An
arrangement between two or more persons to carry on
a business together sharing the profits and losses.
Partners have no separate interests in any partnership
assets. |
| Pension
: |
| A
sum of money paid regularly as a retirement benefit. |
| Per
diem Interest : |
| The
daily interest that accrues from the date of settlement
(closing) until the last day of that month. To arrive
at the per diem figure, multiply the mortgage amount
by the interest rate, and then divide that number by
360 days. Round up to the closest penny. EXAMPLE: Loan
amount x Interest Rate / 360 days $200,000 x 7.5% /
360 = $41.667 Per Diem or $41.67. |
| Periodic
Rate Cap : |
| The
maximum amount a rate can adjust from one adjustment
period to the next. |
| Permanent
Loan : |
| Typically
referring to the permanent phase of a construction-to-permanent
loan. |
| Personal
Property : |
| Property,
other than real estate, that is owned by an individual. |
| PITI
: |
| An
acronym for a mortgage payment that consists of Principal,
Interest, Taxes, and Insurance. |
| Pest
Inspection : |
| A
fee to cover the cost of termite, fungus, water, septic
or other required pest inspections. |
| Planned
Unit Development (PUD) : |
| A
subdivision of homes that share common areas and have
a covenants and restrictions agreed upon by the owners
to maintain the look and feel of the development. |
| Plans
and Specifications : |
| Architectural
and engineering drawings for construction of a dwelling.
They generally include a list of materials to be used
in the construction. |
| Pledge
: |
| An
account containing eligible securities held in a account
and used to collateralize a loan or credit account. |
| PMI
Premium(Private Mortgage Insurance) : |
| The
fee is paid to a private insurance company for insurance
that protects the mortgage lender against financial
loss if the borrower defaults on the mortgage loan.
It must be obtained in the event the LTV is above 80%
on most conventional loans. |
| Points
: |
| Upfront
fee equal to one percent of the principal loan amount,
which is charged by the lender. A "discount point" enables
a borrower to buy down the interest rate. |
| Power
of Attorney : |
| A
legal document authorizing one person to act on behalf
of another. |
| Preliminary
Title Report (PTR) : |
| The
initial title search that allows a title insurance company
to issue a title binder or commitment. |
| Prepaid
Interest : |
| Interest
collected at closing to cover the interest from the
date of closing through the end of the month in which
the closing takes place. |
| Prepaying
: |
| To
pay down the principal balance of your mortgage before
the agreed upon payment schedule. |
| Prepayment
Penalty : |
| Fee
paid to a lender for the privilege of paying off or
paying down a loan before maturity. It is intended to
compensate the lender for lost future income caused
by early principal reductions. |
| Primary
Residence : |
| A
property where one unit is occupied by the owner for
the majority of the year. This unit generally would
not provide income to the owner and is the property
that is used for Federal Tax reporting. |
| Prime
Rate : |
| The
prime rate as published daily in The Wall Street
Journal "Money Rates" table |
| PrimeFirst®
Mortgage : |
| A
twenty-five year, adjustable-rate mortgage with interest-only
payments for the first ten years, and amortizing payments
for the remaining fifteen-year term. Available with
a one-month or six-month adjustment period based on
the LIBOR index. For more information on the costs associated
with this product, please view our Important Loan-cost
disclosures. |
| Principal
: |
| The
amount of money borrowed, excluding interest. Also the
unpaid balance of a loan, excluding interest. |
| Principal
and Interest (P & I): : |
| A
mortgage payment generally consists of a portion of
the payment going to repay the principal balance of
the loan and the remaining amount going towards the
interest amount due for use of funds. (Commonly referred
to as a P&I payment.) |
| Property
Address : |
| The
street/mailing address of the property that will be
reviewed for a mortgage. |
| Processing
Fee : |
| A
fee that covers the costs of the completion of a mortgage
application and supporting documents for underwriting
associated with processing the application. This is
a flat fee and not based on the loan amount. |
| Property
Tax : |
| A
tax levied against the owner of real property by the
local or state government. |
| Property
Tax Reserves : |
| The
amount collected by the lender at closing to fund the
escrow account. The funds collected at closing will
be combined with the monthly amount collected (1/12th
of the annual bill amount) to pay the client's property
tax(es) when it (they) comes due. |
| Property
Type : |
| An
industry recognized designation of a property's primary
use, such as residential, commercial, owner-occupied,
condominium or co-op. |
| Property
Value : |
| The
value of real property. Generally determined by the
amount a buyer and seller agree upon at the time of
sale with neither being under duress. |
| Proprietary
Lease : |
| A
lease used in a co-op that defines the shareholder's
rights. |
| Purchase
Agreement : |
| A
written agreement between a buyer and seller of real
property, setting forth the price and terms of the sale
(sales contract.) |
| Purchase
Price : |
| The
agreed upon amount in a fully executed purchase and
sale agreement, between a buyer and seller for the exchange
of real property. |
| Quitclaim
Deed : |
| A
legal document transferring ownership of real property
without representatives or warranties. |
| Radon
: |
| An
invisible odorless gas that enters dwellings through
cracks or holes in basement floors. |
| Rate
Lock : |
| An
agreement to "lock in" or freeze an interest rate for
a set period of time prior to the loan closing. The
lock remains in effect even if interest rates go up
or down during the agreed upon lock period. The agreed-upon
rate will be in effect at closing provided the closing
takes place prior to the expiration of the agreed upon
lock period. |
| Real
Estate Settlement Procedures Act (RESPA) : |
| The
federal statute that governs real estate lending practices
and certain disclosures. For example, RESPA requires
a Good Faith Estimate of closing costs and the HUD settlement
booklet be provided to a client within three days of
application. |
| Real
Property : |
| Land
and objects permanently attached to it. |
| Realtor
: |
| A
person licensed to sell and/or lease real property,
acting as an agent for others, and who holds an active
membership in a local real estate board affiliated with
the National Association of Realtors (NAR). "Realtor"
is a registered trademark of the NAR. |
| Recording
Fees : |
| A
third party fee collected by the lender at the loan
closing used for recording the mortgage with the local
authorities or recording office, thereby making it part
of the public records. |
| Recourse
Loan : |
| A
loan where the lender's ability to collect in the event
of default extends beyond the property to reach the
borrower's personal assets. |
| Refinancing
: |
| The
repayment of an existing loan debt through the proceeds
of a new loan using the same property as collateral. |
| Release
of Lien : |
| A
legal document to discharge an existing lien. |
| Rental
Income : |
| Funds
received from allowing third party use of real estate.
Generally the owner receives money from the third party
in exchange for use of the property. |
| Required
Closing Documents : |
| Documents
that the lender requires you sign at closing to protect
the security interest on real property and promise to
re-pay the debt. |
| Rescission
Period : |
| The
period of time when the borrower may cancel a refinance
or junior lien mortgage transaction on his/her primary
residence. The normal rescission period is three days. |
| Residential
Investment Property : |
| A
residential property rented out or considered a primary
or secondary residence for anyone other than the owner. |
| Revocable
Trust : |
| A
Trust that is established with a clause that allows
the grantor to withdraw the trust. |
| Revolving
Credit Line : |
| A
line of credit set up to provide funds as needed from
time to time. The line of credit is replenished as principal
reductions are made. Funds may be accessed throughout
the revolving term provided the client has not utilized
the entire credit line balance. |
| Right
of Survivorship : |
| The
right of one joint tenant to inherit sole title to real
estate upon the death of the other joint tenant. |
| Satisfaction
of Mortgage : |
| The
legal document prepared by the lender when a note is
paid in full to remove their lien against the property.
The legal document prepared by the lender when a note
is paid in full to remove their lien against the property.
|
| School
Tax : |
| A
tax charged by local government to support the school
system. |
| School
Tax Escrow : |
| Depending
on the school district in which the property is located,
this amount is collected by the lender at closing to
fund the school tax escrow account. The funds collected
at closing will be combined with the monthly amount
collected (1/12th of the annual bill amount) to pay
the client's school tax bill when it comes due. |
| Score
: |
| An
overall rating (shown as a percentage) derived through
user input to the CreditAdvisor tool. The score indicates
the ability of the product or program to meet your expressed
need given the answers provided to questions asked throughout
the program. |
| Second
Home / Vacation Home : |
| a
seasonal or vacation home for personal use that is not
rented out. |
| Second
Mortgage : |
| A
mortgage made after another mortgage on the same property.
The lien of the second mortgage is subordinate to the
first one. |
| Securities-Based
Credit : |
| Credit
collateralized with eligible securities. |
| Securities
Pledge : |
| Use
of investments as collateral with Mortgage 100SM,
Parent Power ® or Omega account
SM . |
| Securitization
: |
| The
process of selling mortgages on the secondary market
in groups of loans called pools or REMICS (Real Estate
Mortgage Investment Conduit). |
| Security
Interest : |
| A
lien against real property or assets as collateral for
a loan. Assets may be forfeited if a borrower doesn't
meet the obligations set forth in the agreement with
the lender. |
| Separate
Maintenance : |
| An
allowance for support generally made under court order
from one party to another usually after a legal separation. |
| Settlement
: |
| The
closing of a mortgage loan. |
| Settlement/Closing
Fee : |
| This
is a fee charged by the closing agent, attorney or title/escrow
company for services rendered in connection with the
closing. |
| Share
: |
| Any
of the equal parts into which the capital stock of a
corporation or company are divided. |
| Simple
Interest : |
| Interest
computed only on the outstanding principal balance from
time to time. |
| Social
Security Payments : |
| A
government benefit paid to the disabled or elderly in
a monthly sum. Financed by Social Security withholdings
from corporate payroll. |
| Sponsor
: |
| One
who pledges assets as additional collateral for the
benefit of another. Must be a blood relative of the
person for whom they are pledging assets. |
| State
Tax/Stamps : |
| A
tax charged by certain states and counties based on
the amount of the home mortgage recorded. Stamps are
issued in the mortgage amount and are affixed to the
mortgage document prior to recording. |
| Subchapter
S Corporation : |
| A
corporate entity with less than 35 shareholders. Each
shareholder must be a natural person not a corporation,
trust, estate, etc. Established to avoid double federal
income taxes. There is no federal income tax at the
corporate level. |
| Subordination
: |
| When
a lender allows another lender to take a lien position
ahead of their lien. This is common when refinancing
a first mortgage lien and leaving your second mortgage
lien in place. The holder of the second mortgage lien
would need to subordinate to the new first mortgage. |
| Subsequent
Monthly Payment : |
| The
first payment amount after the fixed rate or interest-only
period of a loan. |
| Survey
: |
| A
measurement and description of land prepared by a licensed
surveyor. The survey shows the location of any structures
on the land in relation to the property's boundaries.
|
| Tax
Lien : |
| A
lien against the property for unpaid taxes. |
| Tax
Search : |
| A
part of a title search which determines if there are
any unpaid taxes or assessments which may be a lien
against the subject property. |
| Tax
Service Fee : |
| A
fee charged by a lender to annually verify if all taxes
are current on real property. Protects the lender from
unexpected tax liens that may be filed against the property.
|
| Term
: |
| The
period of time between the commencement date and termination
date of a note, mortgage, legal document, or contract. |
| Tax
Pro-Ration : |
| Tax
money owed to, or due from the seller for tax bills
already paid or taxes already incurred. |
| Tax
Deductibility : |
| The
ability to deduct interest and/or charges from federal
income tax. You should consult a tax adviser regarding
the deductibility of interest expense. |
| Tenancy
in Common : |
| An
undivided ownership in real estate by two or more persons.
The interests need not be equal, and in the event of
death of one of the owners, no right of survivorship
in the other owner's exists. |
| Third
Party Doc Prep Fee : |
| A
fee charged by the closing agent, attorney or title
agency for preparing any additional loan or title related
documents for closing. |
| Title
: |
| Written
evidence of the right to or ownership in real property.
In the case of real estate, the documentary evidence
of ownership is the title deed that specifies in whom
the legal estate is vested and the history of ownership
and transfers. The records of title are generally held
in the local county recorders office or courthouse. |
| Title
Examination : |
| A
fee charged by an attorney or title agency to examine
title abstract/report, other public records and survey
and to determine insurability and/or marketability on
behalf of a title insurance company. |
| Title
Insurance : |
| Insurance
that provides an indemnity against loss or damage as
a result of a 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. |
| Title
Insurance Binder : |
| A
fee charged by the title insurance agency for preparing
the title insurance commitment. |
| Title
Report : |
| The
report prepared after a title search to notify the lender
who has title to the property and whether any liens
or judgments are held against it. |
| Title
Search : |
| A
review of legal records to check the validity and completeness
of the title to the property. This search will uncover
any liens or other claims against the property. |
| Town
house : |
| A
row house on a small lot which has exterior limits common
to other similar units. Title to the unit and lot is
vested in the individual owner with a shared interest
in common areas, if any. |
| Transfer
Tax : |
| Taxes
imposed by certain counties and states on the conveyance
of title for real estate from one person to another. |
| Treasury
Index : |
| The
one-year Constant Maturity Treasury is the weekly average
yield on United States Treasury Securities adjusted
to a constant maturity of one year as published by the
Federal Reserve Board in publication number H.15. |
| Trust
: |
| When
legal title to property is transferred to a trustee
with the intention that the title will be held by the
trustee for the benefit of another. |
| Trustee
: |
| Person
who holds legal title to property for the benefit of
another. |
| Trust
Fund : |
| A
fund established for the beneficiary(ies) of the trust.
Trusts may encompass real property or monetary funds.
A trust is managed by a trustee. |
| Trust
Fund Income : |
| The
beneficiary of a trust generally receives income from
the trust on a pre-arranged payment plan. This income
is generally paid out monthly or annually. The beneficiary
may have access only to the scheduled payments or may
also be able to withdraw principal from the trust. |
| Truth
in Lending Statement (TIL) : |
| Full,
written disclosure of credit terms and conditions, including
the finance charge, annual percentage rate, and other
charges incurred in a loan transaction as required by
the Truth-in-Lending Act (Regulation Z). |
| Under
Construction : |
| Real
property that is still in process of being built. This
designation remains intact until the property is 100%
complete and has received a Certificate of Occupancy. |
| Under
Renovations : |
| Real
property which is currently being re-modeled or renovated.
(Generally would not include small changes like re-carpeting
or re-painting.) |
| Underwriting
: |
| The
analysis of the risk involved in making a mortgage loan
to determine whether the risk is acceptable to the lender.
Underwriting involves the evaluation of the property
as outlined in the appraisal report, and of the borrower's
ability and willingness to repay the loan. |
| Underwriting
Fee : |
| A
fee charged to analyze the risk involved in the lending
decision which covers the underwriting of the credit
report, appraisal, collateral and title to ensure the
borrower's willingness and ability to repay the loan. |
| Unexercised
Stock Options : |
| Options
to buy stock in a corporation that have not been used.
Unexercised options are not considered an asset until
they have been exercised and the person actually has
shares of stock. |
| Usury
: |
| The
legal limit that is placed on the maximum rate of interest
that a lender may charge. |
| Village
Tax : |
| A
tax charged by local government. |
| Village
Tax Escrow : |
| Depending
on the county, city, or district in which the property
is located, this amount is collected by the lender at
closing to fund the village tax escrow account. The
funds collected at closing will be combined with the
monthly amount collected (1/12th of the annual bill
amount) to pay the client's village tax bill when it
comes due. |
| Warranty
Deed : |
| A
deed used in many states to convey fee title to real
property. |
| Water
Tax : |
| A
tax charged by local government. |
| Zoning
: |
| The
local government classifications for use of property
in a given area. |
