Terminology
Amortization: Payment of a debt in equal periodic installments of principal and interest.
Binder, Title: A report issued by a title insurance company setting forth the condition of title to certain property as of a certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued (also referred to as a "commitment").
Balloon Note: A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a "balloon" is due at maturity.
Chain of Title: The chronological order of conveying of a parcel of land, from the original owner to the present owner.
Closing Statement: The statement which lists the financial settlement between buyer and seller, and also the costs each must pay (also referred to as a "HUD-1"). click here ›
Deed of Trust: An instrument recorded to create a lien against real property, securing the repayment of a loan. Property is transferred to a trustee by the borrower/trustor in favor of the lender/beneficiary, and reconveyed upon payment in full. click here ›
Escrow Account: Account held by a lender for payment of taxes, insurance or other periodic debts related to real property.
Good Faith Estimate: A document prepared by a lender showing what a borrower may reasonably expect to pay at settlement.
Hazard Insurance: Also called homeowners insurance, protects against losses caused by damage to or destruction of a property, depending on the terms of the policy.
Mortgage Insurance: Insurance written by an independent mortgage insurance company, protecting the lender against loss incurred by a mortgage default.
PITI: Principal, interest, taxes and insurance; the four components of a monthly mortgage payment.
Planned Unit Development (PUD): A real estate project in which individuals hold title to a residential lot, while the common facilities are owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.
Plat Map: A map dividing a parcel of land in to lots, as in a subdivision.
Prepayment Penalty: A penalty under a note, mortgage or deed of trust, imposed when the loan is paid before it is due.
Promissory Note: A written promise, executed by the maker, to pay a specified amount during a limited time or on demand, to a named person, or order or bearer. click here ›
Recordation: Filing instruments for public record and notice with a recorder of deeds.
Stamp Taxes: Taxes collected by the county/city and state for the recordation of documents.
Subordination: The act of making an existing mortgage, secondary in priority to a new mortgage. Borrowers refinancing their primary mortgage can normally maintain an existing home equity loan so long as the home equity loan lender agrees to have its mortgage subordinated to the new primary mortgage.
Survey: A scale drawing of a parcel of real property depicting the improvements and other characteristics.
Truth in Lending Disclosure: A document prepared by a lender and required by law to be provided to a borrower before and at settlement summarizing the terms of the loan. click here ›
Walk-Through Inspection: An inspection of property by a buyer very close to the time for closing to determine that the condition of the property has not changed since the purchase contract as executed or that promised changes have been made.
Warranty Deed: A legal document evidencing the transfer of title to real property, as well as the nature of ownership.
Binder, Title: A report issued by a title insurance company setting forth the condition of title to certain property as of a certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued (also referred to as a "commitment").
Balloon Note: A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a "balloon" is due at maturity.
Chain of Title: The chronological order of conveying of a parcel of land, from the original owner to the present owner.
Closing Statement: The statement which lists the financial settlement between buyer and seller, and also the costs each must pay (also referred to as a "HUD-1"). click here ›
Deed of Trust: An instrument recorded to create a lien against real property, securing the repayment of a loan. Property is transferred to a trustee by the borrower/trustor in favor of the lender/beneficiary, and reconveyed upon payment in full. click here ›
Escrow Account: Account held by a lender for payment of taxes, insurance or other periodic debts related to real property.
Good Faith Estimate: A document prepared by a lender showing what a borrower may reasonably expect to pay at settlement.
Hazard Insurance: Also called homeowners insurance, protects against losses caused by damage to or destruction of a property, depending on the terms of the policy.
Mortgage Insurance: Insurance written by an independent mortgage insurance company, protecting the lender against loss incurred by a mortgage default.
PITI: Principal, interest, taxes and insurance; the four components of a monthly mortgage payment.
Planned Unit Development (PUD): A real estate project in which individuals hold title to a residential lot, while the common facilities are owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.
Plat Map: A map dividing a parcel of land in to lots, as in a subdivision.
Prepayment Penalty: A penalty under a note, mortgage or deed of trust, imposed when the loan is paid before it is due.
Promissory Note: A written promise, executed by the maker, to pay a specified amount during a limited time or on demand, to a named person, or order or bearer. click here ›
Recordation: Filing instruments for public record and notice with a recorder of deeds.
Stamp Taxes: Taxes collected by the county/city and state for the recordation of documents.
Subordination: The act of making an existing mortgage, secondary in priority to a new mortgage. Borrowers refinancing their primary mortgage can normally maintain an existing home equity loan so long as the home equity loan lender agrees to have its mortgage subordinated to the new primary mortgage.
Survey: A scale drawing of a parcel of real property depicting the improvements and other characteristics.
Truth in Lending Disclosure: A document prepared by a lender and required by law to be provided to a borrower before and at settlement summarizing the terms of the loan. click here ›
Walk-Through Inspection: An inspection of property by a buyer very close to the time for closing to determine that the condition of the property has not changed since the purchase contract as executed or that promised changes have been made.
Warranty Deed: A legal document evidencing the transfer of title to real property, as well as the nature of ownership.
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