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| Third-Party Origination |
When a lender uses a third party to process, originate, underwriter, fund, close, or package a mortgage. Oftentimes, a lender will use third-party origination when they plan to sell the mortgage on the secondary mortgage market. |
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| Title |
The document that grants and proves ownership of an asset. The title will include any liens, encumbrances and other claims on the property. |
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| Title Company |
An company that confirms ownership to a property and verifies if any liens exist against the property. When you purchase a property, you will need to use the services of a title company to research the title on the property you are purchasing and issue a title policy. The insurance policy issued by the title company will guarantee the ownership of the property that you are purchasing and will guarantee the quality of the title. |
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| Title Insurance |
Insurance that protects a borrower and lender against any defects in a property's title such as title-search errors and against any losses a borrower or lender would incur as a result of property disputes. Title insurance is usually charged at a set amount per $1000 of insurance. This cost can be paid for by the buyer, the seller, or a combination of both. |
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| Title Report |
A document that provides the results of a title search. This report will ensure that the property you are purchasing has no outstanding claims against it and that the seller of the property is the legal owner. If claims are found on the title report, they must be satisfied prior to your purchase of the property. |
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| Title Search |
For the purchase of a property, the process of confirming the legal ownership of the property to ensure that there are no liens or encumbrances on the property and that the seller is the legal owner of the property. This is accomplished by a title company researching all of the public records related to the property that you are purchasing. |
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| Total Expense Ratio |
The percentage of a potential loan borrowers total monthly expenses to their gross monthly income. Expenses factored include your housing expenses and all of your monthly debts. Your lender will look at your total expense ratio to determine whether or not you will qualify for the loan you are applying for. |
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| Transfer Tax |
When you purchase or sell a property, the tax paid to the state or local government as a percentage of the property's value. It is generally the seller's responsibility to pay the transfer tax at the time of closing. The amount of the tax is usually based on a percentage of the property's selling price, but the exact amount charged varies from state to state and from city to city. |
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| Treasury Index |
Index that lenders use to establish the interest rates of some of their adjustable rate mortgage products. This index is based on the results of the auctions that the U.S. Treasury holds for its Treasury Bills and securities or is based on the closing market bid yields of the over-the-counter Treasury securities. |
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| Truth In Lending Act |
A federally mandated law that requires lenders to provide borrowers with a written disclosure of the costs associated with a mortgage including items such as finance charges, the Annual Percentage Rate (APR), the size of the credit line, any annual fees and the length of the grace period. The Truth in Lending Act is a federal law and it includes the Fair Credit Billing Act. |
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| Two-Step Mortgage |
A mortgage program that allows a borrower to have a set interest rate for the first few years of the mortgage (usually five to seven years), then adjust upward to a set rate for the duration of the loan. During the first part of the mortgage term, the interest rate is a below-market rate. |
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