Abstract of Title or Title Abstract
A history or summary of all the transactions affecting a particular piece of property.
Adjustable Rate Mortgage (ARM)
A mortgage with an interest rate that changes, either up or down.
Affidavit
A sworn written statement.
Amortization
The reduction of a debt by applying regularly scheduled payments.
Annual Percentage Rate (APR)
Annual Percentage Rate is the cost of the credit that must be reported by lenders under Truth in Lending regulations. APR takes into account the interest rate and up-front charges paid by borrower. On some mortgages the APR is higher than your actual mortgage rate.
Assumable Mortgage
A mortgage that allows a new owner to take over payments on loan. The original borrower may or may not remain liable on the mortgage note, depending on the terms of the mortgage.
Deed
A written document by which the ownership of land is transferred from one person to another.
Deed of Trust
Instrument used to secure a loan on real estate, like a mortgage does but not exactly the same. The main difference is in how foreclosures are handled. Foreclosures are much faster with a Deed of Trust than with a mortgage. Deed of Trust is not used in Florida.
Deposit, Good Faith Deposit or Earnest Money
Advance payment of part of the purchase price that is held in escrow until closing. It is used to show good faith and ensure the buyer performs.
Due-on-Sale Clause
A provision in a mortgage or deed of trust that requires the loan to be paid in full if title to a property is transferred.
Equity
The value of a property over and above the debts against the property.
Escrow
Money held by a 3rd party. Examples are the good faith deposit or earnest money that accompanies a contract and is held until closing. Another example is money collected from a borrower and held by a lender to cover future payments of property taxes or insurance.
Fannie Mae (FNMA)
Fannie Mae is slang for the Federal National Mortgage Association, a federally sponsored private corporation which provides a secondary market for residential mortgages.
Fixed Rate Mortgage
A mortgage with a fixed interest rate. With a fixed rate mortgage, the payment for principal and interest, which is the loan payment, will not change for the life of the loan, although the monthly payment may change if property taxes or insurance rates change and they are included as part of the monthly payment.
Federal Housing Administration (FHA)
An agency of the federal government that insures private loans for financing of new and existing housing, sometimes including home repairs under special government approved programs.
Freddie Mac (FHLMC)
Freddie Mac is slang for the Federal Home Loan Mortgage Corporation, another secondary market for residential mortgages.
Foreclosure
The legal process by which a mortgagor of real property is striped of his interest in that property due to failure to comply with terms and conditions of the mortgage.
Grantee
A person who receives an interest in land by deed, grant or other written instrument.
Grantor
A person who gives an interest in land by deed, grant or other written instrument.
Hazard insurance
The homeowner’s insurance policy which protects against hazards like fire.
Heir
A person who might succeed to an interest or inherit a property under rules of laws.
Interest Only Mortgage
A mortgage where only the interest is paid on a monthly basis, therefor the loan balance is not reduced unless the borrow pays extra beyond the required interest payment.
Instrument
A written document.
Loan Origination Fee
Money required by the lender to be paid to start the work of approving a mortgage.
Judgment
A decree of a court.
Lien
A hold, a claim or charge allowed a creditor upon the lands of a debtor.
Mortgage Note
An instrument used to encumber property as security for a debt.
Mortgagee
The lender.
Mortgagor
The borrower.
Mortgage Insurance (MI)
Mortgage Insurance protects the lender from the borrower failing to pay. The mortgage insurance premium (MIP) is the cost of the insurance, which is paid buy the borrower either monthly in with the mortgage payment, up front at closing or both. PMI stand for private mortgage insurance.
Note
A written promise to pay a certain amount of money, at a certain time, or in a certain number of installments.
Paid Outside of Closing (POC)
Paid outside of closing refers to items that are paid buy the buyer before the closing occurs, but are noted on the closing statement or closing disclosure.
Point
One percent (1%) of the loan amount.
Power of Attorney
An instrument authorizing some to act on another’s behalf as his agent or attorney.
Purchase Money Mortgage (PMM)
A mortgage given by the seller of the property.
Promissory Note
A written promise to pay.
Real Property
Land and that which is affixed to it.
Reissue Credit
A credit given for the purchase of title insurance under certain circumstance when the owner has a previous Owner’s Policy in force.
Second Mortgage
A mortgage that is subordinate to another mortgage.
Survey
The process of measuring property to determine its size, location and physical description and the resulting drawing or map.
Tax Service Fee
A fee paid to the mortgage company to verify and pay the real estate taxes.
Title
Title to a piece of property is evidence of ownership of real estate. Having “title” to a property in Florida means you have the legal right to possess that property and to use it subject to the limitations imposed by various authorities.
Title Insurance
Title insurance protects real estate owners and lenders against loss or damage they might suffer because of liens, claims, encumbrances, defects in the title or judgments associated with a property after a purchase is completed.
Title Search
An examination of public records and court decisions to disclose the current facts regarding ownership of real estate.
Transfer taxes
Money paid to the county and or state when property is sold.
Veterans Administration Mortgage (VA Mortgage)
A VA Mortgage is a mortgage that is guaranteed by the Department of Veterans Affairs (VA).
Will
A written document properly witnessed, providing for the distribution of property owned by the deceased.
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