In both scenarios, your relative might be better off paying your mortgage debt in return for you quitclaiming the deed to him or her. Read more Real Estate Adviser columns and more stories about real estate. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Short sale home to family OK? Related Articles: Buying home? You may also like. My nephew and I inherited a house.
How do I buy out his half? Down payments usually are 10 to 20 percent of the sales price on a conventional loan. VA loans have no downpayment but are only available to Veterans who have not used up their VA entitlement. Draw Disbursement of a portion of the mortgage loan. Usually applies to construction loans when partial advances are made as improvements to the property progress.
Due-on-Sale Clause A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home. Earnest Money Money given by a buyer when making an offer to a seller as part of the purchase price to bind a transaction or assure payment. It should be held in escrow by the real estate company, a title company or an attorney.
This is usually returnable if the contract does not go through for valid reasons. It may not be returnable if the buyer just changes his mind.
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Encroachment The intrusion of any improvement partly or entirely on the land of another. Encumbrance Any right or interest in land held by persons other than the fee owner which right or interest lessens the value of the fee title. Endorsement A form issued by the insurer at the request of the insured which changes term s or item s in an issued policy or commitment. Equity 1 The interest or value which an owner has in real estate over and above the debts against it. Equity participation A type of mortgage transaction in which the lender, in addition to receiving a fixed rate of interest on the loan, acquires an interest in the borrower's land and shares in the profits derived from the land.
Escheat The transfer of title of property to the state if the owner dies intestate and without heirs. Escrow Refers to a neutral third party who carries out the instruction of both the buyer and seller to handle all the paperwork of settlement or closing. Escrow may also refer to an account held by the lender into which the home buyer pays money for tax or insurance payments. Equal Credit Opportunity Act ECOA A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, sex, marital status, handicap status or receipt income from public assistance programs.
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Equity The difference between the fair market value and current indebtedness, also referred to as the owner's interest. Estate The degree, quantity, nature, and extent of interest which a person has in land. Et ux And wife. Examination of title The review of the chain of tide as revealed by an abstract of the tide or public records. Exclusion Those general matters affecting title to real property excluded from coverage of a title insurance policy.
Executor A person named in a will to administer the estate. Executrix is the feminine form. Also known as "Freddie Mac. Fixed Rate Mortgage The mortgage interest rate will remain the same on these mortgages throughout the term of the mortgage for the original borrower. Also known as "Fannie Mae. Also known as a repossession of property. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.
FHA Federal Housing Administration, an agency of the federal government which insures private loans for financing of new and existing housing and for home repairs under government approved programs. Fixture Personal property that by state law becomes real property upon being attached to real estate. Foreclosure Legal process by which a mortgagor of real property is deprived of interest in that property due to failure to comply with terms and conditions of the mortgage. Graduated Payment Mortgage GPM A type of flexible-payment where the payments increase for a specified period of time and then level off.
This type of mortgage may have negative amortization built into it. Grantee In a deed, the person to whom the land is transferred.
Grantor In a deed, the person who transfers the land. Guaranty A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.
Hard Money Lender Equity lenders who base their funding decisions on the unencumbered property value and its salability. They do not calculate debt ratio and usually do not take into account the borrower's credit and income. Funding can be very fast. Sometime in 2 days or less.
Hazard Insurance A form of insurance in which the insurance company protects the insured from specified losses, such as fire windstorm and the like. Heir The person who, at the death of the owner of land, is entitled to the land if the owner has died with-out a will. Homestead exemption A person's dwelling and that part of the land which is about and contiguous to the dwelling.
Many states by statute give special privileges to such lands, such as exemptions from remedies of creditors. Also see Debt-to-Income Ratio. It is responsible for the implementation and administration of U. Impound That portion of a borrower's monthly payment held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as Reserves. Index A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments such as one, three and five year U.
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Treasury security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average costs of funds incurred by savings and loans , which is then used to adjust the interest rate on an adjustable mortgage up or down. The rate must be one that is outside the influence of the lender. Insurable title A land title which a title insurance company is willing to insure. This service is offered by the insurer to certain large lenders, developers, etc. Interval ownership A form of time share owner-ship.
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See Time share ownership. Intestate Without having made a valid will or one who dies without having made a will. Investor A money source for a lender. Or someone who purchases real estate as a short or long term investment. Interim Financing A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.
Because jumbo loans can not be funded by these two agencies, they usually carry a higher interest rate. Joint tenants Persons who are co-owners of interests in the same land. This survivorship feature, when it exists, is the principal distinction between a joint tenancy and a tenancy in common. Judgment The formal expression and evidence of the decision of a court in a specific lawsuit. Where the judgment decrees that one party the judgment debtor pay another party the judgment creditor a certain sum of money, the recording of that judgment creates a lien upon all land of the judgment debtor in that jurisdiction.
Junior mortgage A mortgage, the lien of which is subordinate to that of another mortgage. Second and third mortgages are both junior mortgages. Lien A claim upon a piece of property for the payment of a debt or obligation. Leasehold The right to possession and use of land for a fixed period of time. The lease is the agreement which creates the right. The person who has the lease-hold is the tenant or lessee. The person who grants the leasehold is the lessor or landlord.
Legal description A property description which by law is sufficient to locate and identify the parcel of real property. Lien A claim or charge on property of another for payment of some debt, obligation, or duty. Lien waiver or waiver of liens A document signed by the general contractor, each subcontractor, and each materialman of a construction project whereby the signators waive their right to mechanics' liens on the land involved in that particular project.
See Chain of title. See Chains and links. Lis Pendens A legal notice that there is litigation pending relating to the land and a warning that anyone obtaining an interest subsequent to the date of the notice may be bound by the judgment. Loan policy or mortgage policy or mortgagee policy A title insurance policy in which the insurer insures the mortgagee against loss it may suffer because the tide is not vested as stated in the policy and insures the validity and priority of the mortgage lien over any other lien not excepted to in the policy.
Loan-to-Value Ratio The relationship between the amount of the mortgage loan and appraised value of the property expressed as a percentage. Margin The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate. Marketable title A title which a reasonable purchaser, well informed as to the facts and their legal meaning, would be willing to accept. Market Value The highest price that a buyer would pay and the lowest price a seller would accept on a property.
Market value may be different from the price a property could actually be sold for at a given time. Master deed See Condominium declaration.
Mechanics' liens surety bond A bond in which an approved surety company agrees to indemnify the title insurance company for any loss it may suffer due to the insurer's issuing a specific policy without mechanics' lien exception. Metes and bounds A description of a parcel of land by describing the boundary lines in length and direction. It is insurance from FHA to the lender against incurring a loss due to the borrower's default. On September 1, the MIP was changed to a one time charge to the borrowers.