Category: Real Estate News

MORTGAGEE. The lender who has agreed to lend money to the mortgagor.

MORTGAGOR. The homeowner (borrower), who has agreed to repay a mortgage loan to the mortgagee.

NEGATIVE AMORTIZATION. Occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be

PAYMENT CAP. With regard to an adjustable rate mortgage, this limits the amount of increase in the borrower’s monthly principal and interest at the payment

POINTS. A point is a charge of one percent of the mortgage value. Points are a one-time charge assessment by the lender to increase the interest

PRINCIPAL. This term is used to mean the employer of an agent; or the amount of money borrowed, or the amount of the loan. Also, one

PRINCIPLE. Amount of money borrowed in mortgage loan, excluding interest and other charges.

PROMISSORY NOTE. Following a loan commitment from the lender, the borrower signs a note, promising to repay the loan under stipulated terms. The promissory note

PRORATION OF TAXES. To divide or prorate the taxes equally or proportionately to time of use, usually between seller and buyer.

QUITCLAIM DEED. A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA). A federal law requiring the disclosure to borrowers of settlement (closing) procedures and costs by means of a pamphlet and

RECORDING. The process of placing a document on file with a designated public official for public notice. This public official is usually a county officer

RIGHT OF SURVIVORSHIP. The right of a surviving tenant or tenants to succeed to the entire interest of the deceased tenant; the distinguishing feature of

SALES CONTRACT. The contract between the buyer and seller. The contract should explain, in detail, exactly what your purchase includes, who is responsible for providing

SEPARATE PROPERTY. Property owned by a married person in his or her own right outside of the community interest including property acquired by the spouse

SETTLEMENT EXPENSE. This is different from closing costs, but also involves charges that a buyer or seller must pay in closing a deal on a

TITLE INSURANCE. Insurance to protect a real property owner or lender up to a specified amount against certain types of loss, e.g., defective or unmarketable title.

TITLE REPORT. A report which discloses condition of the title, made by a title company preliminary to issuance of title insurance policy.

TITLE SEARCH OF TITLE GUARANTY. Detailed review of title records, generally at the local courthouse, to assure that the property is bought from the legal

TITLE. Evidence(usually in the form of a certificate or “deed”) of a person’s legal right to the ownership of property.

TRUST DEED. Just as with a mortgage this is a legal document by which a borrower pledges certain real property or collateral as guarantee for

TRUSTEE. One who holds property in trust for another to secure the performance of an obligation. Third party under a deed of trust.

TRUSTOR. One who borrows money from a trust deed lender, then deeds the real property securing the loan to a trustee to be held as

VA (Veterans’ Administration). A federal agency which in 1944 established a loan guaranteed program to encourage private lending agencies to give liberal mortgages to honorably-discharged veterans

VARIABLE INTEREST RATE. (VlRs or VMRs, Variable Mortgage Rates.) An interest rate in a real estate loan which by the terms of the note varies

WRAP AROUND MORTGAGE. A financing device whereby a lender assumes payments on existing trust deeds of a borrower and takes from the borrower a junior

ZONING. Classification or real property for varying uses. Act of city or county authorities specifying type of use to which property may be put in

ALTA OWNERS POLICY. (American Land Title Association) An owner .s extended coverage policy that provides buyers and owners the same protection the ALTA policy gives

ABSTRACT OF TITLE. Summarized history of the legal title to property, shows changes of title, records of liens and encumbrances.