WALKTHROUGH

A common clause in a sales contract that allows the buyer to examine the property being purchased at a specified time immediately before the closing, for example, within the 24 hours before closing.

VA GUARANTEED LOAN

A mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs (VA).

UNDERWRITING

In mortgage lending, the process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves and analysis of the borrower’s creditworthiness, ability to repay the loan, and the value of the property securing the loan.

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).

TREASURY INDEX

An index is used to determine interest rate changes for certain in adjustable-rate mortgage (ARM) plans. It is based on the results of auctions by the U.S. Treasury of Treasury bills and securities.

TRANSFER TAX

State or local tax payable when title to property passes from one owner to another.

TRADE EQUITY

Real estate or assets given to the seller as part of the down payment for the property.

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.

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

A legal document evidencing a person’s right to or ownership of a property.

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.

SINGLE-FAMILY PROPERTIES

One-to four- unit properties including detached homes, townhouses, condominiums, and cooperatives, and manufactures homes attached to a permanent foundation and classified as real property under applicable estate law.

SETTLEMENT STATEMENT

A document that lists all closing costs on a real estate purchase or refinance transaction.

SETTLEMENT

The process of completing a loan transaction at which time the mortgage documents are signed and then recorded, funds are disbursed, and the property is transferred to the buyer (if applicable). Also, called closing or escrow in different jurisdictions.

SECURED LOAN

A loan that is backed by property such as a house, car, jewelry, etc.

RIGHT OF FIRST REFUSAL

A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.

REVOLVING DEBT

Credit that is extended by a creditor under a plan in which (1) the creditor contemplates repeated transactions; (2) the creditor may impose a finance charge from time to time on outstanding unpaid balance; and (3) the amount of credit that may be extended to the consumer during the term of the plan is generally made available to the extent that any outstanding balance is repaid.

REFINANCE TRASNACTION

The process of paying off one loan with the proceeds from a new loan using the same property as security.

REAL PROPERTY

Land and anything permanently affixed there to – including buildings, fences, trees, and minerals.

REAL ESTATE SETTLEMENT ROCEDURES ACT (RESPA)

A federal law that requires lenders to provide home mortgage borrowers with information about transaction-related costs prior to settlement, as well as information during the life of the loan regarding servicing and escrow accounts. RESPA also prohibits kickbacks and unearned fees in the mortgage loan business.