A | B | C | D | E | F | G | H | I | J | L | M | N | O | P | Q | R | S | T | W

Adjustable Rate Mortgage (ARM)
adjustable rate mortgage (ARM), variable rate mortgage or floating rate mortgage is a mortgage loan where the interest rate on the note is periodically adjusted based on an index, such as 30-year Treasury bills or the Cost-of-Funds index.

Abstract of Title
Short history of Title to land, noting all Conveyances, Transfers, Grants, Wills and judicial proceedings, and all Encumbrances and Liens, together with evidence of satisfaction and any other facts affecting title.

A valuation or a determination as to the value of property. It is often used in connection with assessing property taxes or leving property taxes.

A licensed person who represents the seller (and/or buyer) and who provides market assessment, sales or buying strategy, recommends various services and sources important to the seller or buyer.

A method by which monthly mortgage payments are equalized over the life of the loan despite the fact that the proportion of principal to interest changes.

Professional and unbiased written opinion of property’s value based on recent, comparable sales, quality of construction, current condition and style of architecture.

Assumption of Mortgage
Assumption of mortgage is the purchase of mortgaged property whereby the buyer accepts liability for the debt that continues to exist. The seller remains liable to the mortgage lender (whether the lender is a commercial bank, thrift, credit union, mortgage banker or mortgage broker) unless the lender agrees to release him.

A person licensed to represent home buyers or sellers for a contracted fee. Most real estate offices are managed by a broker who employs licensed sales agents to sell the properties.

The final settlement at which time the title is transferred from seller to buyer, accounts are settled, new mortgages signed and all fees and expenses dispersed or satisfied.

Closing Costs
All fees, taxes, charges, commissions and other costs paid by buyer and/or seller at the closing.

Personal property pledged as the security for a debt. The mortgage is usually the collateral for the property itself.

A previously agreed upon percentage of the home’s sale price paid to the listing and selling agent(s).

Credit Report
A report outlining the credit history of an individual which includes current and previous debts, payment amounts, late payments and past due amounts and other related information on every credit source the individual has used.

A legal “instrument” that conveys the title to a property from seller buyer.

Statement concerning the condition of the property for sale and the surrounding area.

Down Payment
The buyer’s payment to the seller at the time the sales contract has been mutually agreed to, or at closing, for the percentage of the total purchase price required by the buyer’s mortgage loan.

The difference between the sale price of a property and the mortgage on the property.

Escrow Account
A third party account used to retain funds including the property owner’s real estate taxes, buyer’s earnest money or hazard insurance premiums.

Free and Clear Title
Title to a property which is free from any mortgage, lien, or other encumbrance.

Graduated Payment Mortgage
This mortgage offers low initial monthly payments which increase at a pre-determined rate, then cap at a final level for the duration of the mortgage.

Hazard Insurance
Often confused with “Homeowner’s” insurance, it’s designed to compensate for specific hazards including fire and wind. An “all-risk home owner’s policy” provides more complete coverage.

Home Inspection
A formal survey of a home’s structure, mechanical systems and overall condition, generally performed by a licensed professional inspector.

Homeowner’s Policy
A hazard insurance policy covering at the very least the appraised value of a house and property.

The pre-determined charge or fee paid to a lender by the borrower for the use of monies loaned.

Joint Ownership
Two parties share in the ownership of a particular piece of property

The judgment of a court against a certain person(s) or company(s) that can cause a lien on the title.

Market Price
The actual price at which a property is sold.

Market Value
The price that is established by existing economic conditions, property location and market style and size preferences.

A legal claim received by the lender on a property as security for the loan made to a buyer to facilitate the purchase.

Mortgage Interest
The amount the borrower pays the lender to compensate the lender for the use of money to purchase the borrower’s home. This is tax deductible interest.

Negative Amortization
Most likely to occur with ARMs when monthly payments are not sufficient to cover interest cost. Additional interest is added to principal balance and the borrower may end up owing more than at the initiation of the loan.

Origination Fee
Similar to a point, this fee is a supplemental fee paid by buyers to lenders.

Payment Cap
A limit on the amount monthly payments on an adjustable rate mortgage can increase or decrease at each adjustment period.

A single percent of the loan principal, often charged by the lender in addition to various fees and interest.

Prepayment Penalty
A fee included in the mortgage agreement requiring borrower to pay in the event the loan is paid before the due date.

An informal estimate of the “financing potential” of a prospective borrower.

The amount of money borrowed against which interest and possibly fees will be charged. (A second meaning: one of the parties to a contract.)

Proportionate division of expense based on days or time occupied or used by the seller and/or buyer.

Ability of a borrower to satisfy a lender’s mortgage approval requirements.

The process of applying for a new mortgage to gain better terms or use of equity.

RESPA Statement
The Real Estate Settlement Procedures Act requires a precise listing of all closing costs for both sellers and buyers.

This term relates to all legal and financial transactions required to finalize the contract between buyer and seller, at the conclusion of which closing takes place.

Tax Lien
A tax lien is a lien imposed on property by law to secure payment of taxes. Tax liens may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes.

A legal document that defines the property, right of ownership and possession.

Title Insurance
An insurance policy that protects the buyer against errors, omissions or any defects in the title.

Walk-Through Inspection
The final inspection by the buyer, usually in the company of the buyer’s real estate sales agent, to ensure that all conditions noted in the offer-to-purchase, and all seller-related contingencies have been met. This inspection is most often completed immediately prior to the official act of closing, after the seller has vacated the premises.

Protection provided to the purchaser regarding the condition of appliances and pictures. Often, new homes have more extensive warranties also covering the overall structure.


our Underwriters