Terms to Know

ALTA – American Land Title Association; the national association for title insurance agency

Appraisal – an estimate of value of property from evaluation of details about the property; an opinion of value

Broker – a person acting as a representative for another person in negotiating sales or purchases in exchange for a fee or commission

Closing – also known as a “settlement”; process of completing a real estate transaction in which deeds, mortgages, leases and other required documents are signed and delivered, accounting between parties is made, the money is disbursed, the papers are recorded, and all other details are attended to

Closing Statement – a summary, in the form of a balance sheet, made at a closing, showing the amounts of debits and credits to which all parties are entitled

Covenant – a formal agreement or contract between two parties in which one party gives the other specific promises

Deed – a written document that transfers title to real estate from one party to another

Depreciation – a decline in value from normal wear and tear

Easement – a right held by a person to enjoy or make limited use of another person’s property

Estate – a substantial piece of land; all of someone’s possessions, such as all property, assets, debts, and liabilities left by a deceased or bankrupt person

Examination – the study of the instruments in a chain of title and determination of their effect and condition to decide the status of the title

Good Faith Estimate – an estimate of closing costs the lender is required to give to the buyer within three days of applying for mortgage loan; lender’s estimate

Judgment – a determination by court usually awarding the payment of money to one of the parties to a lawsuit

Loan Policy – a policy of title insurance issued to mortgage lender insuring against loss of title

Mortgage – a temporary provisional guarantee of property to a creditor as security for the payment of debt, which may be cancelled, by payment

Owner’s Policy – a policy of title insurance typically insuring an owner of real estate against loss of the owner’s title

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, which was formerly insured within some period of time

Survey – a determination of the location, boundaries, area, or elevations of land and structures by means of courses in relation to the North Star, and the measuring of angles and distances; the map or plot drawn by the surveyor which shows the results of a survey

Title – a combination of all components 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 Insurance – the coverage against loss resulting from defects in or liens upon a title

Underwriter – an insurance company, which issues insurance policies either to the public or to another insurer

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