Amortization
Payment of a debt in equal periodic installments of principal and interest.
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.
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”).
Chain of Title
The chronological order of convenyance of a parcel of land, from the original owner of the present owner.
Closing Disclosure
The document listing the Borrower’s loan information, credits and charges involved in the transaction. 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.
Mortgage Insurance
Insurance written by an independent mortgage insurance company, protecting the lender against loss incurred by a mortgage default.
Loan 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.
Planned Unit Developement (PUD)
A real estate project in which individuals hold title to a residential a lot, while the common facilities are owned and maintained by a homeowner’s association for the benefit and use of the individual PUD unit owners.
PITI
Principal, interest, taxes and insurance; the four components of a monthly mortgage payment.
Plat Map
A map dividing a parcel of land in to lots, as in a subdivision.
Recordation
Filing instruments for public record and notice with a recorder of deeds.
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
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.
Stamp Taxes
Taxes collected by the county/city and state for the recordation of documents.
Survey
A scale drawing of a parcel of real property depicting the improvements and other characteristics.
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.
