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Definitions of mortgage
terms
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| Time is of the essence |
A phrase
inserted in contracts to require punctual performance. |
| Title |
A legal
document proving a person's right to claim entitlement to a property,
including the history of the property's ownership. |
| Title binder |
Written evidence of temporary title
insurance coverage. |
| Title company |
A company
that specializes in examining and insuring titles to real estate. |
| Title insurance |
Insurance that protects against loss from disputes over ownership
of a property. A policy may protect the mortgage lender and/or the
home buyer. |
| Title search |
A check
of the title records to ensure that the seller is the legal owner
of the property and that there are no liens
or other claims against the property. |
| Transfer tax |
State or local tax levied when title passes from one owner
to another. |
| Treasury index |
An
index used to determine interest rate changes for certain adjustable
rate mortgages (ARMs). It is based on the results of auctions
that the U.S. Treasury holds for its Treasury bills and securities
or is derived from the U.S. Treasury's daily yield curve, which is
based on the closing market bid yields on actively traded Treasury
securities in the over-the-counter market. |
| Truth-in-Lending |
A federal
law that requires lenders to disclose, in writing, the terms and conditions
of a mortgage, including the annual
percentage rate (APR) and other charges. |
| Two-step mortgage |
See
alternative
mortgage products. |
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| Underwriter |
A company
or person undertaking the responsibility for issuing a mortgage. Underwriters
analyze a borrower's creditworthiness and set the loan amount. |
| VA mortgage |
A loan
backed by the Veterans Administration. It requires very low or no
down
payments and has less stringent requirements for qualification.
Members of the U.S. armed forces are eligible for the loans under
certain qualifying conditions. Contact the local VA office for information. |
| Warranty deed |
The
gold standard in deeds for
home buyers: It proclaims that the grantor warranties (guarantees)
that the property has clear
title and is being conveyed free of liens
or encumbrances. |
| Wraparound mortgage |
A new
mortgage that includes the remaining balance on an old mortgage, plus
a new amount. |
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