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Mortgage Loan
Mortgage Terms:
tenancy in common
As opposed to joint tenancy, when there are two or more individuals on
title to a piece of property, this type of ownership does not pass ownership
to the others in the event of death.
third-party origination
A process by which a lender uses another party to completely or partially
originate, process, underwrite, close, fund, or package the mortgages
it plans to deliver to the secondary mortgage market.
title
A legal document evidencing a person's right to or ownership of a property.
title company
A company that specializes in examining and insuring titles to real estate.
title insurance
Insurance that protects the lender (lender's policy) or the buyer (owner's
policy) against loss arising from disputes over ownership of a property.
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 outstanding.
transfer of ownership
Any means by which the ownership of a property changes hands. Lenders
consider all of the following situations to be a transfer of ownership:
the purchase of a property "subject to" the mortgage, the assumption
of the mortgage debt by the property purchaser, and any exchange of possession
of the property under a land sales contract or any other land trust device.
transfer tax
State or local tax payable when title passes from one owner to another.
Treasury index
An index that is used to determine interest rate changes for certain adjustable-rate
mortgage (ARM) plans. 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 fully disclose, in writing, the
terms and conditions of a mortgage, including the annual percentage rate
(APR) and other charges.
two-step mortgage
An adjustable-rate mortgage (ARM) that has one interest rate for the first
five or seven years of its mortgage term and a different interest rate
for the remainder of the amortization term.
two- to four-family property
A property that consists of a structure that provides living space (dwelling
units) for two to four families, although ownership of the structure is
evidenced by a single deed.
trustee
A fiduciary who holds or controls property for the benefit of another.
VA mortgage
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).
vested
Having the right to use a portion of a fund such as an individual retirement
fund. For example, individuals who are 100 percent vested can withdraw
all of the funds that are set aside for them in a retirement fund. However,
taxes may be due on any funds that are actually withdrawn.
Veterans Administration (VA)
An agency of the federal government that guarantees residential mortgages
made to eligible veterans of the military services. The guarantee protects
the lender against loss and thus encourages lenders to make mortgages
to veterans.
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