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Abstract of title |
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A written history of the title to a property, based on the title search, which informs a buyer whether anyone else has a legal claim to the property |
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Clear title |
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A property title that is free of liens or legal challenges to ownership |
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Closing |
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The completion of a real estate transaction; depending on the state in which it takes place, the transaction may be considered "closed" when documents are recorded at the local recorder's office, or when all of the documents are signed and money changes hands |
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Closing costs |
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Costs associated with the purchase of a home, such as mortgage fees, title insurance, appraisal and inspection fees, and points, which must be paid at the sale closing. |
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Deed |
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A legal document that transfers real estate from one party to another |
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Deed of trust |
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An instrument used to transfer title of property to a trust or security for the loan, which serves as protection for the lender in case the borrower defaults |
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Encumbrance |
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Anything that affects or limits the title to a property, such as mortgages, leases, easements, or restrictions |
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Equity |
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A homeowner's financial interest in a property, that is, the actual cash value of a property after all claims against it have been paid |
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Escrow account |
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A special account maintained by the lender containing money for the lender to use to pay the special costs on the owner's mortgage or property as these costs become due (for example, taxes, hazard insurance, flood insurance, or mortgage insurance) |
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HUD-1 settlement statement |
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A document that provides an itemized listing of the funds that were paid at closing, such as real estate commissions, loan fees, points, and initial escrow amounts |
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Lien |
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Any claim against a property, including mortgages, unpaid taxes or repair bills, or other unpaid charges, which must be paid when a property is sold; a lien must be filed or recorded with the local county government in order to be attached to a property title See also Release of lien |
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Mechanic's lien |
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Any payment owned to a contractor for work done on the property |
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Mortgage lien |
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The unpaid balance on the mortgage loan |
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Recordation/Recording |
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The noting in the registrar's office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, which makes it a part of the public record |
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Refinance transaction |
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The process of paying off one loan with the proceeds from a new loan using the same property as security |
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Release of lien |
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A document provided by a lender when a debt is fully repaid; when the release of lien is filed, the lien is removed from public records and a clear title is issued |
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Settlement (Closing) |
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The process by which all financial dealings and contractual arrangements-such as the payment of debts, making of adjustments, disbursement of money, and preparation of a new deed-are completed for the buyer and seller |
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Settlement fee |
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Fee charged by a settlement company to conduct a closing |
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Settlement statement |
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See HUD-1 settlement statement |
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Title |
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Evidence of the right of property ownership, which can be held solely, jointly, in common, or in corporate or partnership form |
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Title company |
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A company that performs and insures title searches, which is usually selected by the seller and may work as a lender's agent |
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Title defect |
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Any problem with a title, such as an easement, encroachment, or lien, that has not been recorded with the city building department or the county recorder's office |
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Title examination |
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A review that requires the examination of public records or an abstract of title and will reveal a property's previous owners as well as any encumbrances |
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Title insurance |
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Insurance, usually purchased by the buyer and sometimes required by the lender, that protects a property owner against defects to or claims against a property |
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Title search |
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An examination or search of public records, laws, and court actions to verify that the seller of a property is its legal owner and to disclose all claims or encumbrances on the property
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