Abstract of Title: summarized written history of all titles, transfers and legal actions connected with a piece of real property
Adverse Possession: the occupation of land to which another person has title with the intention of possessing it as one's own
Amortization: the action or process of reducing or paying off a debt with regular payments
APR (Annual Percentage Rate): the annual rate that is charged for borrowing money
Appraisal: An estimate of value of property from analysis of facts about the property
Basic Rate: in title insurance, the basic rate is the rate charged to a consumer who does not qualify for a reduced rate
Beneficiary: the recipient of benefits, often from a deed of trust; usually the lender
Broker: someone who acts as an agent for another in negotiating sales or purchases in return for a fee or commission
Brokerage: fee or commission paid to a broker
Chain of Title: sequence of historical transfers of title (ownership) to a property. A good chain will run from present owner back to the original owner, or Back to Soil
Closing: process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/or delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to
Closing Disclosure (CD): a document that provides the final details of the mortgage; must be delivered to consumer three business days before they close on the loan
Closing Statement: document used to provide the closing details to a transaction; shows amounts of debits and credits to each party of the transaction
Cloud on Title: an irregularity, possible claim, or encumbrance which could affect or impair the title
Contract: a formal agreement
Deed: a written document by which title to real estate is conveyed from one party to another
Deed of Trust: a type of trust instrument that transfers interest in real property. In Texas, a deed of trust is most commonly used to secure a loan for the purchase of a home or other real property until that loan is repaid and the trust is voided, similar to how mortgages are used in other states
Deed Restrictions: written agreement that limits the use or activities that may take place on a piece of real property
Defect: a blemish or imperfection found in the chain of title; a defective title is imperfect or faulty
Disbursement Date: the date amounts are to be given to a buyer or seller in a real property transaction, or the date funds are to be paid to the borrower or a third party in a transaction that is not a purchase transaction
Earnest Money: a small part of the purchase price made by the borrower as a sign of good faith
Easement: right held by a person to enjoy or make limited use of another’s real property
Eminent Domain: right of a government to take privately owned property for public purposes under condemnation proceedings upon payment of its reasonable value
Encroachment: extension of a structure from the real estate to which it belongs across a boundary line and onto adjoining property
Encumbrance: claim, right or lien upon the title to real estate, held by someone other than the real estate owner
Escrow: the depositing of anything pertaining to a real estate transaction to an impartial third-party (title company); money and documents are to be disbursed and delivered to the rightful parties by the title company when all conditions of the transaction/contract have been met
Examination: to peruse and study the instruments in a chain of title and to determine their effect and condition in order to reach a conclusion as to the status of the title
Exceptions: a list of items excluded from coverage of the title insurance policy; these items can be found in section two of Schedule B
First Mortgage: a mortgage having priority as a lien over any other mortgage or lien on the same property
General Warranty: a warranty provision in a real estate instrument containing all of the common law items of warranty
Hazard Insurance: real estate insurance protecting against fire, some natural causes, vandalism, etc.
Ingress: the right to enter; the means or place of entry
Intestate: dying without leaving a legal will
Joint Tenants: multiple people hold title to a piece of real property, with equal rights to share in its enjoyment during their respective lives with provisions that upon the death of a tenant, their rights will pass to the surviving tenants until the full title is vested in the sole surviving tenant. A joint tenant can neither sell or encumber the real property without the consent of all other joint tenants.
Judgment: a conclusion or determination by a court of law usually awarding the payment of money or relief of some kind to one of the parties to a lawsuit
Legal Description: based on government surveys and recognized by law, a legal description spells out the exact boundaries of a parcel of land and should do so so thoroughly that that parcel cannot be confused with another
Lender's Policy: protects your lender against problems with the title to your property-such as someone with a legal claim against the home; a lender's policy does not protect the consumer from such issues
Lien: a right to keep possession of property belonging to another person until a debt owed by that person is discharged; judgments, taxes, mortgages and deeds of trusts are considered liens
Loan Estimate: a form designed to provide information about key features, costs and risks of the mortgage loan for which the consumer is applying; must be provided to consumer no later than three business days after applying for the loan
Marketable Title: a title that a court of equity considers to be free and clear of defects and liens that it will legally force its acceptance by the buyer
Market Value: the average between the highest price that a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept
Mechanic's Lien: a lien put on real estate when debts are due to those who have provided labor or supplies to improve the real property; usually filed by contractors, subcontractors or supplies who were not paid for services
Metes and Bounds: a system of describing land, real property or real estate that uses courses, directions, distances and monuments
Mortgage: a temporary conditional pledge of property to a creditor as security for the payment of a debt that may be cancelled by payment
Opinion (Title Opinion): the conclusion and judgment of title as based upon title examination
Owner's Policy: insurance policy that protects the owner and their heirs for as long as they own the real property outlined within the policy; only the owner's policy will protect the buyer if a title issue such as, errors or omissions in deeds, mistakes in examining records, forgery and undisclosed heirs, should arise; an owner's policy is paid for with a one time payment
PITI-Principle, Interest, Taxes, Insurance: mortgage payment that includes the principle, interest, taxes and insurance included in the mortgage
Power of Attorney: a legal instrument authorizing one to act as another’s agent or attorney
Preliminary Title Report: a report documenting the current ownership of the real property in question; this report may include information about liens and encumbrances that will not be covered under a title insurance policy
Premium: the amount payable for an insurance policy
Probate: the process to prove the validity of a will to be provided as public record
Promissory Note: a written promise to pay or repay a specified sum of money at a stated time to a named person
Public Records: documents or pieces of information that are not considered confidential and have been filed in a recorder's office
Quit Claim Deed: used to transfer property interest from one person (grantor) to another (grantee)
Recording: process of filing documents that affect real property with the appropriate government agency as a matter of public record
Refinance Rate: the reduced rate for a loan policy issued on the new loan in a refinance transaction, in which the original loan was previously insured within some period of years
Reissue Rate: the reduced rate for an Owner’s Policy of title insurance issued on a property that was previously insured within some period of year
Search: a careful exploration and inspection of the public records in an effort to find all recorded instruments relating to a particular chain of title
Settlement Statement: the document that provides a detailed breakdown of costs involved in a real estate transaction
Specialty Warranty Deed: a deed to real estate where the seller does not guarantee against any defects in title that existed before they took possession of the real property
Subdivision: an area of land divided into lots, blocks and building sites, and in which public facilities are laid out, such as streets, alleys, parks and easements for public utilities
Survey: The map or plat drawn by a surveyor that has examined a particular area of land
Tax Lien: a lien that is imposed upon real estate by operation of law that secures the payment of real estate taxes
TILA-RESPA Integrated Disclosure (TRID): a rule to help borrowers understand the terms of their financial transaction; TILA: Truth In Lending Act; RESPA: Real Estate Settlement Procedures Act
Title: a combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy, and dispose of real estate or an inheritable right or interest therein; the rights of ownership recognized and protected by the law
Title Commitment: an offer to issue a title insurance policy that describes conditions, exclusions and exceptions that will apply to that specific policy
Title Defect: any potential threat to a person's full right or claim to own or sell real property
Title Examination: to peruse and study the instruments in a chain of title and to determine their effect and condition in order to reach a conclusion as to the status of the title
Title Insurance: insurance that protects purchasers of real estate and mortgages against loss from defective titles, liens and encumbrances
Title Plant: a geographically filed assemblage of title information which is to help in expediting title examinations, such as copies of previous attorneys’ opinions, abstracts, tax searches, and copies or take-offs of the public records
Title Search: a search and perusal of the public records for recorded instruments that affect the title to a particular piece of land; also known as Title Examination or Abstract of Title
Underwriter: an insurance company that issues the insurance policy either to another company or to the public
Vesting: how ownership of title is taken
Warranty Deed: a deed where the grantor guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee
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