Beaver Builders in Sanger, Texas- specializing in custom homes and remodeling for the physically challenged

ABSTRACT (OF TITLE): Condensed history of a title to real estate consisting of a summary of the various links in the chain of title, together with a statement of all liens, judgments, taxes, or encumbrances affecting the property.
ABSTRACT OF JUDGMENT: Brief transcript of a judgment recorded in the real estate records.
ADJUSTABLE RATE MORTGAGE (ARM): Mortgage with an interest rate that changes over time in line with movements in the index.
ADJUSTMENT PERIOD: Length of time between interest rate changes on an ARM. For example: a loan with an adjustment period of one year is called a one-year ARM, which means that the interest rate can change once each year.
ADVERSE POSSESSION: Possession inconsistent with the right of the true owner.
AMORTIZATION: Payment of debt in regular, periodic installments of principal and interest, as opposed to interest-only payments.
APPRAISAL FEE: Expense payable to the lender, representing the cost in determining value of subject property. This fee is normally paid to the lender upon application for a loan. The contract stipulates the party to bear the expense.
ARREARS: Payment made after it is due is in arrears. Interest is said to be paid in arrears since it is paid to the date of payment rather in advance, as is rent.
"As-Is" CONDITION: Premises accepted by the buyer of the condition existing at the time of sale, including all defects.
ASKING PRICE: Price at which the seller is offering the property for sale. The eventual selling price may be different after negotiation with the buyer.
ASSUMPTION FEE (OR TRANSFER FEE): Fee charged by a loan company in connection with assumptions to transfer records into a new purchaser's name. This expense, unless stipulated otherwise, is normally paid by the buyer.

CAP: Limit of how much an interest rate or monthly payment can change, either at each adjustment or over the life of the mortgage.
CC&Rs (COVENANTS, CONDITIONS & RESTRICTIONS): Document that controls the use, requirements, and restrictions of a property.
CLOSING COST: Cost incurred by the buyer or seller in a title company closing- such as recording fees, legal fees, survey, title policy, and various mortgage company charges- in connection with the loan. The contract of sale between seller and buyer usually specifies which cost is to be paid by each party.
CONDEMNATION: Taking of private property for the public use. Also called the Power of Eminent Domain.
CREDIT REPORT FEE: Expense, payable to the lender, for costs incurred to verify credit rating, etc. This fee is normally paid to the lender upon application of the loan. Unless the contract of sale or FHA/VA regulations stipulate otherwise, the purchaser normally pays the fee.

DEED: Written instrument duly executed and delivered for the purpose of conveying title to real estate.
DEED OF TRUST: Document conveying title to the land to a third party "trustee" as security for the performance of an obligation. Comparable to a mortgage in some states.
DEFECT OF RECORD: Any encumbrance on a title which is made a part of the public record. Some recorded defects are judgments, mortgages, other liens, easements, etc.
DISCOUNT POINTS: Percentage of loan amount, payable to the lender, representing the difference between the loan yield and the investment value of the money.

EASEMENT: Privilege or right of use or enjoyment which one person may have in the lands of another. For example: a right-of-way for utility lines, a joint driveway, etc.
ENCROACHMENT I PROTRUSION: A trespass; the building of any improvements partly or entirely intruding on the property of another.
ENCUMBRANCE: Any right to or interest in land which may be held by third parties to the lessening of the value of the title to real estate- such as judgment or unpaid taxes.
EQUITY: Interest or value which an owner has in real estate over and above the debts against it.
ESCROW FEE: Fee charged by North American Title Company to parties as a miscellaneous handling fee. Includes costs for notary fees, issuance of checks, etc.
ESCROW MONEY: Portion of the down payment delivered to the seller or escrow holder by the buyer with a written offer as evidence of good faith.
ESCROW SHORTAGE: Deficiency in the escrow account held by the lender. If expenses for taxes, insurance, etc.. exceed the amount collected each month in the installment. the lender determines the amount necessary to make the account current. This amount is applied to subsequent monthly installments. Upon assumption of the existing loan and transfer of the escrow account, the lender requires that such shortage be paid in full at closing. Unless otherwise stipulated, the seller pays the expense.

FEDERAL NATIONAL MORTGAGE ASSOCIATION: Popularly known as Fannie Mae. A privately owned corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by the SHQ or guaranteed by the VA. as well as conventional home mortgages.
FHA LOAN: Loan insured by the Department of Housing and Urban Development.
FHA MORTGAGE INSURANCE: Under FHA-insured loans, insurance to protect against loss in the event of default and subsequent sale of foreclosed property. The Department of Housing and Urban Development must approve the borrower.
FINANCE CHARGE: Total cost a borrower must pay, directly or indirectly. to obtain credit.
FLOOD INSURANCE: If property is located within a designated flood area and such insurance is available, many lenders require such coverage to protect against loss through damage due to flooding. This is considered a prepaid expense and one year's premium is normally paid in advance by the purchaser.
FLOOD INSURANCE ESCROW: If required. a specified monthly figure that is collected in advance as instructed by the lender and also collected each month within a payment. Upon the renewal date, the lender uses the collected monies to remit payment of the annual premium. The purchaser normally pays the escrowed amounts collected in advance.

GENERAL WARRANTY DEED: Deed containing a covenant in which the grantor agrees to protect the grantee against any claimant.
GRANTEE: Normally, the buyer in a real estate transaction.
GRANTOR: Normally, the seller in a real estate transaction.

HAZARD INSURANCE: Real estate insurance protecting against loss caused by fire, etc., depending on the terms of the policy.
HEIRSHIP AFFIDAVIT: A written declaration, under oath, setting the intestate succession of a decedent. Appropriate when the decedent died without a written probated will.
HIDDEN DEFECT: Any encumbrance on a title that is not apparent in the public records. Examples include unknown heirs, secret marriages, forged instruments, mental incompetence, infancy of a grantor, etc.

Judgment: Final determination in a court of competent jurisdiction of the parties' rights to an action or a proceeding.

LATE CHARGE: Penalty for failure to pay an installment payment on time. Usually not allowed as interest for tax deductions. Mayor may not be included as usury. If not, the amount of the late charge is either set by statute or must be reasonable.
LIEN: Hold or claim which person has on the property of another as security for some debt or charge.
LOAN COMMITMENT: Written promise to make a loan for a specified amount with specific terms.
LOAN ORIGINATION FEE: One-time fee payable to the lender as an expense to obtain the loan, normally I % (one percent) of the loan amount. Unless otherwise stipulated, the purchaser / borrower normally pays this fee.
LOAN-To-VALUE RATIO: Relationship between the amount loaned to the appraised value of the property.

MORTGAGE: Legal document which is used to pledge property as security for repayment of the loan. In Texas this document is called a Deed of Trust. It is recorded in the courthouse and creates a lien on the property until the loan is repaid and a Release of Lien is recorded.
MORTGAGEE: The lender under a mortgage.
MORTGAGOR: The borrower under a mortgage.

OWNER'S TITLE POLICY: Policy issued by North American Title Company to the purchaser of the property instead of the lien holder. It guarantees clear title to the property, subject to exceptions. Based on the home's sale price.

PARTIAL INTEREST: Any interest less than a whole. For example: a spouse's community interest or a tenancy in common.
PERFECTING TITLE: Elimination of all claims made against a title to real estate.
PREPAID INTEREST: Interest paid before coming due. Most lenders require that the first payment be due the first of the second month following the closing. Interest is paid in arrears and collected at the end of the month.
PRIVATE MORTGAGE INSURANCE (PMI): Insurance against a loss by the lender in the event of default by a borrower. Similar to the insurance by a governmental agency- such as FHA- except that a private insurance company issues it. The premium is paid by the borrower and is included in the mortgage payment.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA): Federal law that allows consumers to review information on known or estimated settlement costs once after application and once prior to a settlement.
RESTRICTION: Limitation placed on the use of real estate. For example: set-back lines prohibiting the erection of any part of a building less than a specified number of feet from the street line.

SETTLEMENT STATEMENT: Statement giving a complete breakdown of costs involved in a real estate transaction. A separate statement is prepared for the buyer and the seller.
SPECIAL WARRANTY DEED: Deed containing a covenant in which the grantor agrees to protect the grantee against any claims created by the grantor.
SURVEY: Sketch of a subject property, made on the ground by a registered professional land surveyor. It certifies as to the improvement shown, easements, encroachments, etc., on the property. A survey is normally required by all lenders and unless otherwise stipulated. it is paid by the purchaser.

TAX CERTIFICATE: Purchased from a tax service company, this document provides the title company with the necessary information to prorate taxes and to ensure the lender that the taxes have been paid for the previous year. Normally charged to the seller.
TAX SHELTER: Any income tax advantages to which a property owner may be entitled.
TERMITE INSPECTION: Required by lenders prior to funding the property. Made by licensed inspectors with written reports of no infestation. If infestation exists, the property must be treated. Inspection is normally charged to the buyer, unless otherwise stipulated.
TITLE: Instruments or documents which establish ownership of a property, including possession, the right of possession, and the right of property.
TITLE COMMITMENT: Form promulgated by the Texas Department of Insurance. It commits the title insurance company upon payment of the appropriate premium- to issue a title insurance policy to the proposed insured.
TITLE DEFECT: Any circumstance that adversely affects the right of the whole ownership of the property by the owner of record.
TITLE FAILURE: Any circumstance that defeats the right of whole ownership of property by the owner of record.
TITLE INSURANCE COMPANY: Company which issues insurance regarding title to real property. North American Title Company is a local closing agent for several large title insurance companies.
TITLE POLICY: Contract indemnifying against loss resulting from a defect in the title to the interest in the real property insured.
TITLE SEARCH: Examination of all the records comprising a history of the title to real estate.

UNDERWRITER: Person who approves or denies a loan based on the property and the applicant.

VA FUNDING FEE: Fee which is payable to the Veteran's Administration. Charged only once and payable in advance at loan closing. Paid by the purchaser, this fee may be financed if stated in the contract and approved by the lender. Calculated on I % (one percent) of the loan amount.
VA LOAN: Home loan guaranteed by the Department of Veterans Affairs. Issued with very low or no down payments on a home that is a primary residence. Only available to veterans of the Armed Services, those currently on active duty in the Armed Services, and their spouses.
VARIABLE INTEREST RATE: Amount of compensation to a lender that is allowed to vary over the maturity of a loan. The amount of variation is governed by an appropriate index.

WAREHOUSE FEE: Fee charged by the loan company on a conventional loan to deposit the note within the bank to sell to an investor later. This fee is based on the particular lender's practices. Paid by the seller.
WARRANTY DEED: Deed conveying the title to a property with the guarantee of a clear marketable title.

ZERO LOT LINE: Form of housing in which individual units are on separate lots, but are attached to one another. For example: a townhouse.
ZONING ORDINANCE: Regulation of a local government to establish property land usage.