Some Terms You May Encouonter in the Settlement Process:

Abstract of Title

a written history of the title to a property. It is the result of a title search and it tells you if someone else has a legal claim to the property you are buying.

Deed

this is the formal written document which transfers right of ownership and possession from the seller to the buyer.

Deed of Trust

an instrument used to transfer title of property to a trustee as a security for the loan and this serves as protection for the lender in case of default on the part of the borrower.

Escrow Account

a special account maintained by the lender in which a sum of money is set aside, so that the lender can pay the special costs on your mortgage or property as they become due, such as, but not limited to, taxes, hazard insurance, flood insurance, and mortgage insurance.

Note

a written promise to pay a specific amount of money within a specified amount of time. A note may be secured by a mortgage or deed of trust.

Title Examination

a review which reveals the previous owners of and encumbrances on a piece of real estate. To conduct this review, the public records must be searched or an abstract of title examined.

Title Search

an examination or search of public records, laws, and court actions to make sure that the seller is the legal owner and to disclose all other claims or encumbrances on the property affecting its ownership.

Truth-in-Lending

a statement that the lender is required to give the borrower disclosing the total cost of obtaining the loan. In addition to interest, it reflects loan discount fees and other credit costs.