Accredited Buyer's
Representative (ABR)
|
A real estate designation indicating a higher level of
training for representing buyers.
|
Abstract
|
A history of all transactions shown in the public
records affecting a particular tract of land.
|
Acceleration clause
|
A clause in a mortgage that allows the lender to demand
payment of the outstanding loan balance for various reasons. The most
common reasons for accelerating a loan are if the borrower defaults on
the loan or transfers title to another individual without informing the
lender.
|
Adjustable Rate Mortgage
(ARM)
|
Mortgage loans under which the interest rate is
periodically adjusted, in accordance with some market indicator, to
more closely coincide with the current rates. The extent and number of
these adjustments are agreed to at the inception of the loan.
|
Adverse Possession
|
The possession, by one person, of land belonging to
another in a manner deemed adverse to the interest of the owner. Inmost
states, by operation of law, title to the land becomes vested in such
person after a fixed number of years if the owner fails to assert his
or her rights.
|
Affidavit
|
A written statement made under oath before a notary
public or other judicial officer
|
ALTA (American Land
Title Association)
|
The trade association of the title insurance industry,
which has adopted certain insurance policy, forms to standardize
coverage on a national basis.
|
Amortization
|
Payment to reduce the principal of a debt in regular,
periodic installments.
|
Amortization schedule
|
A table which shows how much of each payment will be
applied toward principal and how much toward interest over the life of
the loan. It also shows the gradual decrease of the loan balance until
it reaches zero.
|
Annual percentage rate
(APR)
|
This is not the note rate on your loan. It is a value
created according to a government formula intended to reflect the true
annual cost of borrowing, expressed as a percentage. It works sort of
like this, but not exactly, so only use this as a guideline: deduct the
closing costs from your loan amount, then using your actual loan
payment, calculate what the interest rate would be on this amount
instead of your actual loan amount. You will come up with a number
close to the APR. Because you are using the same payment on a smaller
amount, the APR is always higher than the actual note rate on your loan.
|
Appraisal
|
A report from an independent third party detailing the
estimated value of real estate
|
Appraised value
|
An opinion of a property's fair market value,based on an
appraiser's knowledge, experience, and analysis of the property. Since
an appraisal is based primarily on comparable sales,and the most recent
sale is the one on the property in question, the appraisal usually
comes out at the purchase price.
|
Appraiser
|
An individual qualified by education, training,and
experience to estimate the value of real property and personal
property. Although some appraisers work directly for mortgage
lenders,most are independent.
|
Appreciation
|
The increase in the value of a property due to changes
in market conditions, inflation, or other causes.
|
Appurtenance
|
A right or privilege that is a part of the ownership of
property, such as a right of way to a highway across the land of
another. Water rights are also an example.
|
Assessed value
|
The valuation placed on property by a public tax
assessor for purposes of taxation.
|
Assessment
|
(1) The valuation of real estate for purpose of taxes or
special improvement charges. (2) The amount of taxes or special
improvement charges. Special improvement charges are usually for the
costs of streets, sidewalks, sewers, etc.
|
Assessor
|
A public official who establishes the value of a
property for taxation purposes
|
Asset
|
Items of value owned by an individual. Assets that can
be quickly converted into cash are considered "liquid assets."These
include bank accounts, stocks, bonds, mutual funds, and so on. Other
assets include real estate, personal property, and debts owed to an
individual by others.
|
Assignment
|
(1) The act of transferring an interest, such as a loan
secured by a mortgage, from one person to another. (2) The instrument
or paper by which one person transfers such ownership to another.
|
Assumable mortgage
|
A mortgage that can be assumed by the buyer when a home
is sold. Usually, the borrower must "qualify" in order to assume the
loan.
|
Attorney's Opinion
|
A statement by an attorney as to the validity of a title
arrived at after investigation of the history of the title as recorded
in the public records.
|
Bill of Sale
|
A written document that transfers title to personal
property. For example, when selling an automobile to acquire funds
which will be used as a source of down payment or for closing costs,
the lender will usually require the bill of sale (in addition to other
items) to help document this source of funds.
|
Binder
|
Sometimes called "preliminary certificate"
or"commitment." (1) A preliminary report as to the condition of a title
and a commitment to issue a title insurance policy in a certain manner
when certain conditions are met. (2) A deposit in escrow of a small
part of the purchase price of real estate as evidence of good faith and
to bind an agreement to purchase.
|
Broker
|
Broker has several meanings in different situations.
Most Realtors are "agents" who work under a "broker." Some agents are
brokers as well, either working form themselves or under another
broker. As a normal definition, a broker is anyone who acts as an
agent, bringing two parties together for any type of transaction and
earns a fee for doing so.
|
Celebrity
Realtor
|
A realtor who is very well known and is believed to
possess special powers. They do a lot of business because they get a
lot of business and usually charge full commission.
|
Certificate of Title
|
A certificate issued by a title examiner stating the
condition of a title.
|
Chain
|
In real estate measurements (surveying), a chain is 66
feet long or 100 links, each link being 7.92 inches. The measurement
may change when used in fields other than surveying
|
Chain of Title
|
The successive ownerships or transfers in the history of
title to a tract of land
|
Certified Home
Marketing Specialist (CHMS)
|
A real estate
designation indicating special training for marketing homes.
|
Claim
|
An adverse right or interest asserted by one party
against another or against an insurer or indemnitor. Claims may arise
from unpaid debts or taxes, as well as from hidden title defects such
as fraud, forgery, missing heirs, etc.
|
Clear Title
|
Real property ownership free of liens,
defects,encumbrances or claims.
|
Closing
|
Also called "settlement." A meeting of all parties
involved in a property transaction during which the transaction is
consummated
|
Closing Costs
|
Closing costs are separated into what are
called"non-recurring closing costs" and "pre-paid items." Non-recurring
closing costs are any items which are paid just once as a result of
buying the property or obtaining a loan. "Pre-paids" are items which
recur over time, such as property taxes and homeowners insurance. A
lender makes an attempt to estimate the amount of non-recurring closing
costs and prepaid items on the Good Faith Estimate which they must
issue to the borrower within three days of receiving a home loan
application.
|
Clouded Title
|
An irregularity, possible claim or encumbrance that, if
valid, would adversely affect or impair the title
|
commission
|
Most salespeople earn commissions for the work that they
do and there are many sales professionals involved in each transaction,
including Realtors, loan officers, title representatives,attorneys,
escrow representative, and representatives for pest companies, home
warranty companies, home inspection companies,insurance agents, and
more. The commissions are paid out of the charges paid by the seller or
buyer in the purchase transaction. Realtors generally earn the largest
commissions, followed by lenders, then the others.
|
Comparable Sales
|
Recent sales of similar properties in nearby areas and
used to help determine the market value of a property. Also referred to
as "comps."
|
Condemnation
|
(1) The taking of private property for a public purpose,
with compensation to the owner under the right of eminent domain.
Governmental units, railroads and utility companies have the right to
condemn and take private property. (2) The destruction by government of
private property that imperils the life, health or safety of the public.
|
Contingency
|
A condition that must be met before a contract is
legally binding. For example, home purchasers often include a
contingency that specifies that the contract is not binding until the
purchaser obtains a satisfactory home inspection report from a
qualified home inspector.
|
Contract
|
An oral or written agreement to do or not to do a
certain thing.
|
Conventional Loan
|
A loan secured by a mortgage or deed of trust for which
the loan-to-value ratio is within an acceptable range for a particular
lending institution.
|
Conveyance
|
The transfer of title to property from one person to
another
|
Cooperating Commission |
The
commission paid by the seller to the real estate agent that delivers
the buyer. |
Courtesy
|
A right that a husband has in his wife's property at her
death. It does not exist in all states.
|
Covenant
|
A formal agreement or contract between two parties in
which one party gives the other certain promises and assurances,such as
covenants of warranty in a warranty deed.
|
Credit
|
An agreement in which a borrower receives something of
value in exchange for a promise to repay the lender at a later date.
(top)
|
Deed Restriction
|
A covenant contained in a deed imposing limits on the
use or occupancy of the real estate or the type, size, purpose or
location of improvements to be constructed on it
|
Deed-in-lieu
|
Short for "deed in lieu of foreclosure," this conveys
title to the lender when the borrower is in default and wants to avoid
foreclosure. The lender may or may not cease foreclosure activities if
a borrower asks to provide a deed-in-lieu. Regardless of whether the
lender accepts the deed-in-lieu, the avoidance and non-repayment of
debt will most likely show on a credit history. What a deed-in-lieu may
prevent is having the documents preparatory to a foreclosure being
recorded and become a matter of public record.
|
Default
|
Failure to make the mortgage payment within a specified
period of time. For first mortgages or first trust deeds, if a payment
has still not been made within 30 days of the due date, the loan is
considered to be in default.
|
Defect
|
A blemish, imperfection or deficiency. A defective title
is one that is irregular and faulty.
|
Delinquency
|
Failure to make mortgage payments when mortgage payments
are due. For most mortgages, payments are due on the first day of the
month. Even though they may not charge a "late fee" for a number of
days, the payment is still considered to be late and the loan
delinquent. When a loan payment is more than 30 days late, most lenders
report the late payment to one or more credit bureaus.
|
Deposit
|
A sum of money given in advance of a larger amount being
expected in the future. Often called in real estate as an"earnest money
deposit."
|
Depreciation
|
Loss in value occasioned by ordinary wear and tear,
destructive action of the elements, or functional or economic
obsolescence.
|
Devise
|
A gift of real estate made by a will
|
Discount points
|
A "point" is one percent of the loan amount.
|
Dominant Estate
|
The property for the benefit of which aright-of-way
easement exists across another's adjoining piece of land is said to be
the dominant estate. The land across which the easement runs is said to
be the servient estate.
|
Dower
|
A right that a wife has in her husband's property at the
time of his death. Does not exist in all states.
|
Down Payment
|
The part of the purchase price of a property that the
buyer pays in cash and does not finance with a mortgage.
|
Dual Agency |
An
agency relationship where one agent simultaneously represents both
sides of the transaction - potentially a conflict of interest. |
Earnest Money
|
A deposit of funds by the purchaser of a piece of real
estate as evidence of good faith.
|
Easement
|
A right to use all or part of the land owned by another
for a specific purpose. An easement may, for example, entitle its
holder to install and maintain sewer or utility lines.
|
Encroachment
|
Any building, improvement or structure located on one
property (such as a wall, fence or driveway) that intrudes upon the
property of another.
|
Encumbrance
|
Any interest, right, lien or liability attached to a
parcel of land (such as unpaid taxes or an unsatisfied mortgage) that
constitutes or represents a burden or charge upon
|
Equal Credit Opportunity
Act (ECOA)
|
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
|
A homeowner's financial interest in a property. Equity
is the difference between the fair market value of the property and the
amount still owed on its mortgage and other liens.
|
Escheat
|
The reversion of property to the state when an owner
dies leaving no legal heirs, devisees or claimants.
|
Escrow
|
A method of closing a real estate transaction in which
all required documents and funds are placed with a third party for
processing and disbursement.
|
Estate
|
The ownership interest of an individual in real
property. The sum total of all the real property and personal property
owned by an individual at time of death
|
Exclusive Listing
|
A written contract that gives a licensed real estate
agent the exclusive right to sell a property for a specified time.
|
Execute
|
To sign a legal instrument. A deed is said to be
executed when it is signed, sealed, witnessed and delivered.
|
Fannie Mae (FNMA)
|
Federal National Mortgage Association. A private
corporation dealing in the purchase of first mortgages.
|
Fannie Mae's Community
Home Buyer's Program
|
An income-based community lending model, under which
mortgage insurers and Fannie Mae offer flexible underwriting guidelines
to increase a low- or moderate-income family's buying power and to
decrease the total amount of cash needed to purchase a home. Borrowers
who participate in this model are required to attend pre-purchase
home-buyer education sessions.
|
Federal Housing Administration
(FHA)
|
An agency of the U.S. Department of Housing and Urban
Development (HUD). Its main activity is the insuring of residential
mortgage loans made by private lenders. The FHA sets standards for
construction and underwriting but does not lend money or plan or
construct housing.
|
FHA mortgage
|
A mortgage that is insured by the Federal Housing
Administration (FHA). Along with VA loans, an FHA loan will often be
referred to as a government loan.
|
Fixed Rate Mortgage
|
A mortgage having a rate of interest that remains the
same for the life of the mortgage.
|
Fixtures
|
Personal property that is attached to real property and
is legally treated as real property while it is so attached. Examples:
medicine cabinets, window blinds and chandeliers.
|
Flood Insurance
|
Insurance that compensates for physical property damage
resulting from flooding. It is required for properties located in
federally designated flood areas.
|
Foreclosure
|
A legal proceeding in which real estate secured by a
mortgage or deed of trust is sold to satisfy the underlying debt.
|
Freddie Mac (FHLMC)
Federal Home Loan
Mortgage Corporation
|
A federal agency that purchases both conventional and
federally insured first mortgages from members of the Federal Reserve
System and the Federal Home Loan Bank System.
|
Ginnie Mae (GNMA)
Government National
Mortgage Association
|
A federal association working with the FHA that offers
special assistance in obtaining mortgages and purchases mortgages in
the secondary market
|
Grant
|
To bestow or confer, with or without compensation,a gift
such as land or money by one having control or authority over the gift.
|
Hazard Insurance
|
Insurance coverage that in the event of physical damage
to a property from fire, wind, vandalism, or other hazards.
|
Home Inspection
|
A thorough inspection by a professional that evaluates
the structural and mechanical condition of a property. A satisfactory
home inspection is often included as a contingency by the purchaser.
|
Homeowners' Association
|
A nonprofit association that manages the common areas of
a planned unit development (PUD) or condominium project. In a
condominium project, it has no ownership interest in the common
elements. In a PUD project, it holds title to the common elements.
|
Homeowners Insurance
|
Real estate insurance protecting against loss caused by
fire, some natural causes, vandalism, etc., depending on the terms of
the policy. Also includes coverage such as personal liability and theft
away from home
|
HUD (Department of Housing
and Urban Development)
|
The federal department responsible for the major housing
programs in the United States.
|
HUD-1 settlement
statement
|
A document that provides an itemized listing of the
funds that were paid at closing. Items that appear on the statement
include real estate commissions; loan fees, points, and initial
escrow(impound) amounts. Each type of expense goes on a specific
numbered line on the sheet. The totals at the bottom of the HUD-1
statement define the seller's net proceeds and the buyer's net payment
at closing. It is called a HUD1 because the form is printed by the
Department of Housing and Urban Development (HUD). The HUD1 statement
is also known as the "closing statement" or "settlement sheet."
|
Lease
|
A written agreement between the property owner and a
tenant that stipulates the payment and conditions under which the
tenant may possess the real estate for a specified period of time.
|
Lease Option
|
An alternative financing option that allows home buyers
to lease a home with an option to buy. Each month's rent payment may
consist of not only the rent, but an additional amount which can be
applied toward the down payment on an already specified price
|
Leasehold
|
The right to possession and use of land for a fixed
period of time. The lease is the agreement that creates the right.
|
Legal Description
|
A property description, recognized by law that is
sufficient to locate and identify the property without oral testimony.
|
Lender
|
A term which can refer to the institution making the
loan or to the individual representing the firm. For example, loan
officers are often referred to as "lenders."
|
Lessee
|
A tenant holding leasehold.
|
Lessor
|
A landlord; one who gives leasehold to a lessee.
|
Lien
|
A monetary charge imposed on a property, usually arising
from some debt or obligation.
|
Loan
|
A sum of borrowed money (principal) that is generally
repaid with interest.
|
Loan officer
|
Also referred to by a variety of other terms, such as
lender, loan representative, loan "rep," account executive, and others.
The loan officer serves several functions and has various
responsibilities: they solicit loans, they are the representative of
the lending institution, and they represent the borrower to the lending
institution.
|
Loan Origination
|
The process of obtaining new loans.
|
Loan Servicing
|
After you obtain a loan, the company you make the
payments to is "servicing" your loan. They process payments, send
statements, manage the escrow/impound account, provide collection
efforts on delinquent loans, ensure that insurance and property taxes
are made on the property, handle pay-offs and assumptions, and provide
a variety of other services.
|
loan-to-value (LTV)
|
The percentage relationship between the amount of the
loan and the appraised value or sales price (whichever is lower).
|
Lock-in
|
An agreement in which the lender guarantees a specified
interest rate for a certain amount of time at a certain cost.
|
Lock-in period
|
The time period during which the lender has guaranteed
an interest rate to a borrower.
|
Lot
|
Generally, any portion or parcel of real property.
Usually refers to a portion of a subdivision.
|
Margin
|
The difference between the interest rate and the index
on an adjustable rate mortgage. The margin remains stable over the life
of the loan. It is the index which moves up and down.
|
Market Value
|
The average of the highest price that a buyer,willing
but not compelled to buy, would pay and the lowest price a seller,
willing but not compelled to sell, would accept.
|
Mechanic's Lien
|
A lien on real estate created by operation of law,that
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.
|
Metes and Bounds
|
A land description in which boundaries are described by
courses, directions, distances and monuments.
|
Mortgage
|
A conditioned pledge of property to a creditor as
security for the payment of a debt.
|
Mortgage Banker
|
A mortgage banker is generally assumed to originate and
fund their own loans, which are then sold on the secondary market,
usually to Fannie Mae, Freddie Mac, or Ginnie Mae. However, firms
rather loosely apply this term to themselves, whether they are true
mortgage bankers or simply mortgage brokers or correspondents.
|
Mortgage Broker
|
A mortgage company that originates loans, then places
those loans with a variety of other lending institutions with which
they usually have pre-established relationships.
|
Mortgage Insurance
(MI)
|
Insurance that covers the lender against some of the
losses incurred as a result of a default on a home loan. Often
mistakenly referred to as PMI, which is actually the name of one of the
larger mortgage insurers. Mortgage insurance is usually required in one
form or another on all loans that have a loan-to-value higher than
eighty percent. Mortgages above 80% LTV that call themselves "No MI"are
usually a made at a higher interest rate. Instead of the borrower
paying the mortgage insurance premiums directly, they pay a higher
interest rate to the lender, which then pays the mortgage insurance
themselves. Also, FHA loans and certain first-time home buyer programs
require mortgage insurance regardless of the loan-to-value.
|
Mortgage Insurance
premium (MIP)
|
The amount paid by a mortgagor for mortgage insurance,
either to a government agency such as the Federal Housing
Administration (FHA) or to a private mortgage insurance (MI) company.
|
Mortgagee
|
The holder of a mortgage. The party to whom a mortgage
is made, generally the lender.
|
Mortgagor
|
The borrower in a mortgage agreement.
|
Multiple Listing
|
The pooling in a central bureau of listings of
properties for sale. These listings are held individually by members
ofa group of real estate brokers, with the agreement that any member of
the group may sell the properties and, in the case of a sale, the
commission will be divided between the broker making the sale and the
broker who filed the listing.
|
No-cost loan
|
Many lenders offer loans that you can obtain at"no
cost." You should inquire whether this means there are no "lender"costs
associated with the loan, or if it also covers the other costs you
would normally have in a purchase or refinance transactions, such as
title insurance, escrow fees, settlement fees, appraisal, recording
fees, notary fees, and others. These are fees and costs which may be
associated with buying a home or obtaining a loan, but not charged
directly by the lender. Keep in mind that, like a "no-point" loan, the
interest rate will be higher than if you obtain a loan that has costs
associated with it.
|
Note
|
Also called "promissory note." A written promise to pay
a sum of money, usually at a specified interest rate, at a stated time
to a named payee.
|
Notice of Default
|
A formal written notice to a borrower that a default has
occurred and that legal action may be taken.
|
Original Principal Balance
|
The total amount of principal owed on a mortgage before
any payments are made.
|
Origination Fee
|
On a government loan the loan origination fee is one
percent of the loan amount (see point), but additional points maybe
charged which are called "discount points." One point equals one
percent of the loan amount. On a conventional loan, the loan
origination fee refers to the total number of points a borrower pays.
|
PITI
|
The four components of a monthly mortgage payment on
impounded loans. Principal refers to the part of the monthly payment
that reduces the remaining balance of the mortgage. Interest is the fee
charged for borrowing money. Taxes and insurance refer to the amounts
that are paid into an escrow account each month for property taxes and
mortgage and hazard insurance.
|
PITI reserves
|
A cash amount that a borrower must have on hand after
making a down payment and paying all closing costs for the purchase of
a home. The principal, interest, taxes, and insurance(PITI) reserves
must equal the amount that the borrower would have to pay for PITI for
a predefined number of months.
|
Plat
|
Also called "plat map." A map dividing a parcel of land
into lots, as in a subdivision. A plat book contains the plat maps for
a given area.
|
Pocket Listing | A
listing that is kept in the listing agent's pocket instead of being
distributed on the MLS. It may sound sexy but it's a really bad idea.
Why would you not want the broadest possible distribution of your
property? |
Point
|
Also called "commission points" or "discount points."
One percent of the amount of the loan.
|
Power of Attorney
|
A legal document that authorizes another person to act
on one's behalf. A power of attorney can grant complete authority or
can be limited to certain acts and/or certain periods of time.
|
Pre-Approval
|
A loosely used term which is generally taken to mean
that a borrower has completed a loan application and provided debt,
income, and savings documentation which an underwriter has reviewed and
approved. A pre-approval is usually done at a certain loan amount and
making assumptions about what the interest rate will actually be at the
time the loan is actually made, as well as estimates for the amount
that will be paid for property taxes, insurance and others. A
pre-approval applies only to the borrower. Once a property is chosen,
it must also meet the underwriting guidelines of the lender. Contrast
with pre-qualification
|
Premium
|
The amount payable for an insurance policy.
|
Prepayment
|
Any amount paid to reduce the principal balance ofa loan
before the due date. Payment in full on a mortgage that may result from
a sale of the property, the owner's decision to pay off the loan in
full, or a foreclosure. In each case, prepayment means payment occurs
before the loan has been fully amortized.
|
Prepayment Penalty
|
A fee that may be charged to a borrower who pays off a
loan before it is due.
|
Pre-qualification
|
This usually refers to the loan officer's written
opinion of the ability of a borrower to qualify for a home loan, after
the loan officer has made inquiries about debt, income, and savings.
The information provided to the loan officer may have been presented
verbally or in the form of documentation, and the loan officer may or
may not have reviewed a credit report on the borrower.
|
Prescriptive Easement
|
A right to use another's property that is not
inconsistent with the owner's rights and that is acquired by an
open,notorious, adverse and continuous use for the statutory period,
for example 20 years.
|
Prime Rate
|
The interest rate that banks charge to their preferred
customers. Changes in the prime rate are widely publicized in the news
media and are used as the indexes in some adjustable rate mortgages,
especially home equity lines of credit. Changes in the prime rate do
not directly affect other types of mortgages, but the same factors that
influence the prime rate also affect the interest rates of mortgage
loans.
|
Principal
|
The amount borrowed or remaining unpaid. The part of the
monthly payment that reduces the remaining balance of a mortgage.
|
Principal Balance
|
The outstanding balance of principal on a mortgage. The
principal balance does not include interest or any other charges. See
remaining balance.
|
Private Mortgage Insurance (MI)
|
Mortgage insurance that is provided by a private
mortgage insurance company to protect lenders against loss if a
borrower defaults. Most lenders generally require MI for a loan with a
loan-to-value (LTV) percentage in excess of 80 percent.
|
Procuring Cause |
A clever concept created by real estate agents in order to allow them to stake a claim on a client and restrict competition. It is defined as the
uninterrupted chain of causal events that leads to a successful
transaction. It's the basis for determining which realtor is entitled
to a commission - i.e. the one who can establish procuring cause. |
Promissory Note
|
A written promise to repay a specified amount over a
specified period of time.
|
Pumpkin
Dropoff |
A really lame marketing technique employed by some
realtors who drive around giving pumpkins away at Halloween in order to
ingratiate themselves with prospects. Some realtors even dress up in a
costume.
|
Purchase Agreement
|
A written contract signed by the buyer and seller
stating the terms and conditions under which a property will be sold.
|
Purchase Money Mortgage
|
A mortgage given by a purchaser to a seller on the
subject property to secure payment of a part of the purchase price.
|
Qualifying Ratios
|
Calculations that are used in determining whether a
borrower can qualify for a mortgage. There are two ratios. The "top"or
"front" ratio is a calculation of the borrower's monthly housing costs
(principle, taxes, insurance, mortgage insurance, and homeowner's
association fees) as a percentage of monthly income. The "back"
or"bottom" ratio includes housing costs as will as all other monthly
debt.
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Quit Claim Deed
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A deed that does not imply that the grantor holds title,
but that surrenders and gives to the grantee any possible interest or
rights that the grantor may have in the property
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Rate Lock
|
A commitment issued by a lender to a borrower or other
mortgage originator guaranteeing a specified interest rate for a
specified period of time at a specific cost.
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Real Estate
|
Also called "real property." (1) Land and anything
permanently affixed to the land, such as building, fences and those
things attached to the buildings, such as light fixtures, plumbing and
heating fixtures, or other such items that would be personal property
if not attached. (2) May refer to rights in real property as well as
the property itself.
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Real Estate Agent
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A person licensed to negotiate and transact the sale of
real estate.
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Real Estate
Settlement
Procedures Act (RESPA)
|
A consumer protection law that requires lenders to give
borrowers advance notice of closing costs.
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Real Property
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Land and appurtenances, including anything of a
permanent nature such as structures, trees, minerals, and the
interest,benefits, and inherent rights thereof.
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Realtor®
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A real estate agent, broker or an associate who holds
active membership in a local real estate board that is affiliated with
the National Association of Realtors.
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Recorder
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The public official who keeps records of transactions
that affect real property in the area. Sometimes known as a "Registrar
of Deeds" or "County Clerk."
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Recording
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The noting in a public office of the details of a legal
document - such as a deed or mortgage - affecting the title to real
estate. When such an instrument is properly recorded, it is considered
to be a matter of public record. Legally, that means that all
subsequent purchasers are deemed to have constructive knowledge of that
information.
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Release
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(1) To relieve from debt or security or abandon aright,
such as the release of a mortgage lien from a part or all of the land
mortgaged. (2) The instrument effecting a release.
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Restrictions
|
Limitations on the use of property imposed or created by
deeds or other documents in the chain of title. A restriction, for
example, may prohibit the placement of trailer or the construction of a
commercial structure on the property.
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Right of First
Refusal
|
A provision in an agreement that requires the owner of a
property to give another party the first opportunity to purchase or
lease the property before he or she offers it for sale or lease to
others.
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Right of Survivorship
|
In joint tenancy, the right of survivors to acquire the
interest of a deceased joint tenant
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Secured loan
|
A loan that is backed by collateral.
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Security
|
The property that will be pledged as collateral for a
loan.
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Shadow
inventory |
The overhang of distressed properties, not yet on the
market, but threatening to come on the market in the near future. |
Short sale |
A
sale of a property where the proceeds from the sale is insufficient to
pay off the mortgages and the lender(s) agree to accept this lesser
amount to satisfy the debt. |
Sphere
of influence |
A
realtor's relatives, friends, acquaintances, and anyone he/she has even
casually met for 10 seconds who might be pressured to do business with
the realtor or provide a referral, just because they know each other,
without regard for the realtor's capabilities. |
Subdivision
|
A housing development that is created by dividing a
tract of land into individual lots for sale or lease.
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Subordination
|
The act or process by which a person's rights are ranked
below the rights of others. For example, a second mortgagee's rights
are subordinate to those of the first mortgagee
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Surety
|
(1) A person who agrees to be responsible for a debt or
obligation of another. (2) The pledge or agreement by which one
undertakes responsibility for the debt or obligation of another.
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Survey
|
A drawing or map showing the precise legal boundaries of
a property, the location of improvements, easements,rights of way,
encroachments, and other physical features.
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Tenancy in common
|
As opposed to joint tenancy, when there are two or more
individuals on title to a piece of property, this type of ownership
does not pass ownership to the others in the event of death
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Third-party origination
|
A process by which a lender uses another party to
completely or partially originate, process, underwrite, close, fund, or
package the mortgages it plans to deliver to the secondary mortgage
market.
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Title
|
(1) A combination of all the elements that constitute
the highest legal right to own, possess, use, control, enjoy and
dispose of real estate or an inheritable right or interest therein.(2)
The rights of ownership recognized and protected by the law.
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Title Company
|
A company that specializes in examining and insuring
titles to real estate.
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Title Covenants
|
Covenants ordinarily inserted in conveyances and in
transfers of title to real estate for the purpose of giving protection
to the purchaser against possible insufficiency of the title received.
A group of such covenants known as "common law covenants"includes:
covenants against encumbrances; covenants for further assurance (in
other words, to do whatever is necessary to rectify title
deficiencies); covenants of good right and authority to
convey;covenants of quiet enjoyment; covenants of seisin; covenants of
warranty. (See Warranty or Covenant.)
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Title Defect
|
(1) Any possible or patent claim or right outstanding in
a chain of title that is adverse to the claim of ownership. (2) Any
material irregularity in the execution or effect of an instrument in
the chain of title.
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Title Insurance Policy
|
A contract of title insurance under which the insurer,
in keeping with the terms of the policy, agrees to indemnify the
insured against loss arising from claims against the insured interest.
|
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.
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Transfer of Ownership
|
Any means by which the ownership of a property changes
hands. Lenders consider all of the following situations to be a
transfer of ownership: the purchase of a property "subject to" the
mortgage, the assumption of the mortgage debt by the property
purchaser, and any exchange of possession of the property under a land
sales contract or any other land trust device
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Transfer Tax
|
State or local tax payable when title passes from one
owner to another.
|
Treasury Index
|
An index that is used to determine interest rate changes
for certain adjustable-rate mortgage (ARM) plans. It is based on the
results of auctions that the U.S. Treasury holds for its Treasury bills
and securities or is derived from the U.S. Treasury's daily yield
curve, which is based on the closing market bid yields on actively
traded Treasury securities in the over-the-counter market.
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Trustee
|
A fiduciary who holds or controls property for the
benefit of another.
|
Truth-in-Lending
|
A federal law that requires lenders to fully disclose,
in writing, the terms and conditions of a mortgage, including the
annual percentage rate (APR) and other charges.
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VA mortgage
|
A mortgage that is guaranteed by the Department of
Veterans Affairs (VA).
|
Variable Interest Rate
|
Also called "flexible interest rate." An interest rate
that fluctuates as the prevailing rate moves up or down. In mortgages,
there are usually maximums as to the frequency and amount of
fluctuation.
|
Veterans Administration (VA)
|
An agency of the federal government that guarantees
residential mortgages made to eligible veterans of the military
services. The guarantee protects the lender against loss and thus
encourages lenders to make mortgages to veterans.
|
Waiver
|
The voluntary and intentional relinquishment of a known
right, claim or privilege.
|
Warranty
|
A type of insurance often purchased by home buyers that
will cover repairs to certain items, such as heating or
airconditioning, should they break down within the coverage period. The
buyer often requests the seller to pay for this coverage as a condition
of the sale, but either party can pay.
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