Mortgage Glossary
There are a lot of unfamiliar terms that get tossed around during the mortgage process. But don't worry, we've put together this glossary to help you get a better grasp of any terms that may be less than clear.
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Search Fee
A fee charged by a title company or attorney in some states to cover the cost of searching the public record to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue assessments, or other claims filed that would adversely affect the transfer of the title. For our comparison purposes, a search fee is considered to be a third party fee and may be included in the title insurance fee by some lenders.
Second Mortgage
A loan that has a lien position subordinate to the first mortgage.
Secondary Mortgage Market
The buying and selling of existing mortgages, primarily residential first mortgages.
Secured Loan
A loan that is backed by collateral.
Security
The collateral offered to a lender in exchange for a loan. When a lender provides a mortgage, you provide your home as the security. This means that if payments are in default, the lender has the right to take title to the property.
Security Interest
The lender's right to take property that has been offered as security.
Seller take-Back
An arrangement in which the owner of a property provides financing.
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Servicer
A company that collects principal and interest payments from borrowers and manages borrowers' escrow accounts. The servicer may or may not be the original lender.
Settlement
A meeting of parties involved in a real estate transaction to finalize the process. In the case of a purchase, the settlement usually involves the seller, the buyer, the real estate broker and the lender. In the case of a refinance, the settlement involves the borrower and the lender. Sometimes referred to as the closing or the close of escrow.
Settlement or Closing Fee
A fee charged by a title company, closing agent or attorney to act as a representative and agent for the lender to perform the closing of a real estate transaction.
Settlement Statement
Also referred to as the HUD-1 or the closing statement, this is the document that provides line by line detail of the financial details related to a specific real estate transaction such as the fees paid by the seller and the buyer for a purchase transaction or the fees paid by the borrower for refinances.
Standard Payment Calculation
The process used to determine the monthly payment required to repay the remaining principal balance of a loan in fairly equal installments, over the remaining term of the loan at the current interest rate.
State Tax Stamps
A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another. For our comparison purposes, these fees are considered to be a tax or other unavoidable fee.
State/Local Tax Fees
A tax charged by some state or local governments at the time of transfer of real estate title from one owner to another. For our comparison purposes, these fees are considered to be a tax or other unavoidable fee.