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Terminology
Here Are Some Helpful Terms Used Throughout The Real Estate,
Mortgage, and Title Processes.
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Z
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Tax Service Fee |
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In some cases, we engage a third party to monitor and/or handle the payment of your property tax bills. The Tax Service Fee covers the cost of this service. |
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Taxable Assessed Value |
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The assessed value of a parcel against which the tax rate is applied to compute the tax due. In case of a partial exemption, the exempt amount is subtracted from the assessed value in order to determine the taxable assessed value.
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Teaser Rate |
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A low initial interest rate on a mortgage. |
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Third Party Fees |
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Fees paid to a third party for services requested by the lender on your behalf. |
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Title |
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Individuals who will have legal ownership in the property are considered "on title" and will sign the mortgage and other documentation. Note: if you are married, your spouse will need to be "on title" even if you are not using his/her income for qualifying purposes. |
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Title Company Closing Fee |
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This fee is paid to the title insurance company which conducts your closing and handles the transfer of funds among the parties. |
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Title Insurance |
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Protects lenders or homeowners against loss of their interest in property due to legal defects in title. Insurance benefits will be paid only to the "named insured" in the title policy, so it is important that an owner purchase an "owner's title policy", if he desires the protection of title insurance.
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Title Insurance Binder |
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Written commitment of a title insurance company to insure title to the property under the conditions stated in the binder.
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Title Insurance Premium |
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Premium required by lenders in order to determine that the property is properly owned and not subject to any unacceptable liens, a search is required of the local real estate records, and a title insurance policy insuring the lender that there are no defects in title. The Title Insurance Premium covers the cost of the search and the insurance. The cost of title insurance varies both by state and by county. |
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Title Search or Examination |
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A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, or other claims or outstanding restrictive covenants filed in the record, which would adversely affect the marketability or value of title.
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Total Payments |
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This is the total amount you will have paid over the life of the loan for principal, interest and prepaid finance charges, assuming you keep the loan to maturity and make only the required monthly payments. |
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Transfer Tax |
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In PA the buyer and seller each pay 1% state tax on the sales price of the real estate, unless stated otherwise in the sales contract. In Philadelphia County, the tax rate is 2% for each the buyer and seller.
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Trustee |
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A party who is given legal responsibility to hold property in the best interest of or "for the benefit of" another. The trustee is one placed in a position of responsibility for another, a responsibility enforceable in a court of law. See Deed of Trust |
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Truth-In-Lending Act ( TIL, also called Regulation Z) |
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Under this act a lender is required to provide you with a disclosure estimating the costs of the loan you have applied for, including your total finance charge and the Annual Percentage Rate (APR) within three business days of your application for a loan.
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Two-Step Mortgage |
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With this type of loan homebuyers get a fixed rate loan at a slightly lower interest rate for a fixed period of time (most often for 5, 7, or 10 years) and then the interest rate is adjusted to fit market conditions at that time. After that adjustment, the mortgage maintains a fixed rate for the remaining years.
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