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Sales contract
A contract signed by the buyer and seller detailing the terms of a property sale.

Second mortgage
A second loan placed upon a piece of property.

Seller carry-back
An agreement where the seller provides financing for a home purchase.

Seller financing
The seller allows the borrower to use a portion of the equity in the property to finance the purchase.

Settlement or closing fees
Fees paid to the escrow agent (often a title insurance company) for carrying out the written instructions of the agreement between buyer and seller and/or borrower and lender.

Settlement statement
A closing statement or settlement sheet that outlines all closing costs on a real estate transaction or refinancing for the buyer and seller.

Shared-appreciation mortgage
A loan that allows a lender or other party to share in the borrower's profits when the home is sold.

Shared-equity transaction
A transaction in which two buyers purchase a property, one as a resident co-owner and the other as an investor co-owner.

Step-rate mortgage
A loan that allows a gradual increase in the interest rate during the first few years of the loan.

Subordinate loan
A second or third mortgage.

Subsequent rate adjustments
The interest rate for adjustable rate loans (ARMs) adjusts at regular intervals.  This adjustment period could in some cases differ from the initial interest rate duration period.

Subsequent rate cap
A specific limit defined by most adjustable rate loans (ARMs) for the maximum amount the interest rate may increase at each regularly scheduled interest rate adjstment date.  This limit may differ from the initial rate cap.

Super jumbo mortgage
A mortgage that is over $650,000 or $1,000,000, depending on the lender.

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A precise measurement of a piece of property by a licensed surveyor.

Sweat equity
The non-cash value added to a piece of property by the owner, such as do-it-yourself home improvements.

Tax lien
A lien placed against a property for nonpayment of taxes (property and/or personal)

Tax service fee
A fee collected to set up third-party monitoring of the borrower's property tax payments.  This is done to ensure that the payments are made on time and to prevent tax liens from occurring to the detriment of the lender.

Teaser rate
A low, short-term interest rate offered on a mortgage to entice the borrower.

Tenancy by the entirety
Ownership by a husband and wife in which they together hold title to the whole property with right of survivorship.

Tenancy in common
A form of ownership in which two or more owners hold an undivided (though not necessarily equal) interest in the property, with no right of survivorship.

Ownership that involves the acquisition of a specific period of time or percentage of interest in a vacation home or resort.

The legal document conferring ownership of a piece of real estate.

Title company
A firm that ensures that the property title is clear and provides title insurance.

Title Exam
An examination of the public record to determine that the seller is the legal owner and there are no encumbrances (such as claims or liens) affecting the property.

Title insurance
A policy issued to lenders and buyers to protect against loss due to disputed property ownership at a later date.

Title insurance binder
A title insurance company's written commitment to insure title to the property subject to the conditions and exclusions shown on the binder.

Title risk
Possible impediments to the transfer of a title from one owner to another.

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Title search

The process of reviewing all recorded transactions in the public record to determine whether any title defects exist that could interfere with the clear transfer of ownership of the property.

Total expense ratio
The percentage of monthly debt obligations relative to gross monthly income.

Total lender fees
Fees required by the lender to obtain the loan, apart from other fees associated with transferring a property between buyer and seller.

Total loan amount
The base loan amount plus any financed closing costs.

Total monthly housing costs
The sum of principal, interest, property taxes and, if applicable, private mortgage insurance (PMI) and either hazard insurance or homeowners' association dues.

Total of all payments
The total cost of the loan including repayment of the principal amount and the sum of monthly interest payments.

An attached home that is not a condominium.

Trading down
Buying a home that is less expensive than the one's current house.

Trading up
Buying a home that is more expensive than one's current house.

Trans Union Corporation
One of the major credit reporting bureaus.

Transfer tax
An assessment by state or local authorities at the time a piece of property changes hands.

Treasury Index
An index used to determine interest rate changes for adjustable rate mortgages.

Two-step mortgage
An adjustable mortgage with two interest rates: one for the first five or seven years of the loan, and the other for the remainder of the loan term.

U.S. Department of Housing and Urban Development
Also known as HUD.   This federal agency oversees the Federal Housing Administration and a variety of housing and community development programs.

Underwriters' knot
A code-approved knot tied at the end of an electrical cord to prevent the wires from being pulled away from their connection to electrical terminals.

The process in which lenders evaluate the risks posed by a particular borrower and set appropriate conditions for the loan.

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Underwriting fee

A fee charged by mortgage lenders to verify information on the loan application and make a final decision about whether or not to approve the loan.

Unrecorded deed
A deed that transfers ownership from one party to another without being officially recorded.

VA (Veterans Administration)
The Veterans Administration assists veterans with purchasing a home without a down payment.

VA loan
A loan through the Veterans Administration program, which allows most veterans to purchase a house without a down payment.

Variable rate mortgage (VRM)
A mortgage with an interest rate that changes with fluctuations in such indexes as the prime rate, libor rate, or treasury bill.

Verification of deposit (VOD)
As part of the loan process a lender may ask a borrower's bank to sign a statement verifying the borrower's account balances and history.

Verification of employment (VOE)
As part of the loan process a lender may ask the borrower's employer for confirmation of the borrower's position and salary.

Warehouse fee
A closing cost fee representing the lender's cost of holding a borrower's loan temporarily before it is sold on the secondary mortgage market.

Wraparound mortgage
A loan given to a buyer for the remaining balance on a seller's first mortgage and an additional amount requested by the seller. Payments on both amounts are made to the lender who holds the wraparound loan.

Yield spread
A form of compensation some brokers receive from a lender for originating and processing a loan.  The yield spread is based on the interest rate of the loan and can usually vary anywhere from zero to 6%.

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