Glossary

Condition in a mortgage that may require the balance of the loan to become due immediately, if regular mortgage payments are not made or for breach of other conditions of the mortgage.

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.

Equal periodic loan payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

An estimate of the value of property, made by a qualified professional.

(1) The valuation of real estate for purposes 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.

A written transfer of one's interest in something, such as a promissory note or a deed of trust.

Process of completing a real estate transaction during which all required instruments are signed and/or delivered, money is disbursed, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to.

The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day. The agreement of sale negotiated previously between the buyer and the seller may state in writing who will pay each of the costs.

An irregularity, possible claim, or encumbrance, which, if valid, would adversely affect or impair the title.

A written document by which the ownership of land is transferred from one person to another.

A State tax, in the forms of stamps, required on deeds and mortgages when real estate title passes from one owner to another. The amount of stamps required varies with each State.

Note that offers a mortgage as proof of a debt and describes the terms under which the mortgage is to be repaid.

A legal document that obligates a borrower to repay a mortgage loan at a specified interest rate during a specified period of time or on demand.

Mortgage insurance provided by non-government insurers that protects a lender against loss if the borrower defaults. (Private Mortgage Insurance)

Sometimes called "Discount Points". A point is one percent of the amount of the mortgage loan. For example, if a loan is for $25,000, one point is $250. Points are charged by a lender to raise the yield on his loan at a time when money is tight, interest rates are high, and there is a legal limit to the interest rate that can be charged on a mortgage.
Buyers are prohibited from paying points on HUD or Veterans' Administration guaranteed loans (sellers can pay, however). On a conventional mortgage, points may be paid by either buyer or seller or split between them.

A deed which transfers whatever interest a maker of the deed may have in a particular parcel of land. A quitclaim deed is often given to clear the title when the grantor's interest in a property is questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has.

Restrictive covenants are private restrictions limiting the use of real property. They are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and binding only between the original seller and buyer. The determination whether a covenant runs with the land or is personal, is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area.

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 mortgage.

A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description.

(1) A combination of all the elements that constitute the highest legal to 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 law.

(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.