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Glossary of Terms |
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Glossary of Terms
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Sale-Leaseback
A transaction in which the buyer leases the property
back to the seller for a specified period of time.
Second Mortgage
A mortgage that has a lien position subordinate to the
first mortgage.
Secondary Mortgage Market
The market in which mortgage loan and mortgage-backed
securities are bought and sold.
Secured Loan
A loan that is backed by property such as a house, car,
jewelry, etc.
Security
The property that will be given or pledged as collateral
for a loan.
Seller Take-Back
An agreement in which the seller of a property provides
financing to the buyer for the home purchase.
Single-Family Properties
One- to four-unit properties including detached homes,
townhouses, condominiums, and cooperatives, and
manufactured homes attached to a permanent foundation
and classified as real property under applicable state
law.
Soft Second Loan
A second mortgage whose payment is forgiven or is
deferred until resale of the property.
Soldiers and Sailors Civil Relief Act
A federal law that restricts the enforcement of civilian
debts against military personnel who may not be able to
pay because of active military service.
Subordinate Financing
Any mortgage or other lien with lower priority than the
first mortgage.
Survey
A precise measurement of a property by a licensed
surveyor, showing legal boundaries of a property and the
dimensions and location of improvements.
Taxes and Insurance
Funds collected as part of the borrower's monthly
payment and held in escrow for the payment of the
borrower's state and local property taxes and insurance
premiums.
Title
A legal document evidencing a person's right to or
ownership of a property.
Title Insurance
Insurance that protects the lender (lender's policy) or
the buyer (owner's policy) against losses arising from
defects in the title not listed in the title report or
abstract.
Title Search
A check of the public records to ensure that the seller
is the legal owner of the property and to identify any
liens or claims against the property.
Transfer Tax
State or local tax payable when title to property 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 by the U.S. Treasury of
Treasury bills and securities.
Truth-in-Lending
A federal law intended to promote the informed use of
consumer credit by requiring disclosure about its terms
and costs. Creditors are required to disclose the cost
of credit as a dollar amount (the finance charge) and as
an annual percentage rate (APR).
Two- to Four- Family Property
A residential property that provides living space
(dwelling units) for two to four families, although
ownership of the structure is evidenced by a single
deed; a loan secured by such a property is considered to
be a single-family mortgage.
Underwriting
In mortgage lending, the process of evaluating a loan
application to determine the risk involved for the
lender. Underwriting involves an analysis of the
borrower's creditworthiness, ability to repay the loan,
and the value of the property securing the loan.
Unsecured Loan
A loan that is not backed by collateral.
VA Guaranteed Loan
A mortgage loan that is guaranteed by the U.S.
Department of Veterans Affairs (VA).
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