Glossary

INTEREST ONLY PAYMENTS A mortgage where only the interest is paid on a monthly basis. This means that the buyer gets no equity. This is only used on some purchase money mortgages where the buyer is responsible for paying the seller the entire amount of the second mortgage ...

JUDGEMENT A decree of a court.

LIEN A hold, a claim or charge allowed a creditor upon the lands of a debtor.

LOAN ORIGINATION FEES Money required by the lender to be paid to start the work of approving a mortgage.

MORTGAGE A lien on the property that secures the promise to pay a loan. The mortgage gives the lender the right to collect payment on the loan and to foreclose if the loan obligations are not met.

MORTGAGE INSURANCE A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. Mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home purchase price. Mort...

MORTGAGE INSURANCE PROTECTION (MIP): A monthly payment, usually part of the mortgage payment, which is paid by a borrower for mortgage insurance.

MORTGAGE NOTE An instrument used to encumber land as security for a debt. This document gives the mortgage company “in rem” jurisdiction over the mortgagor.

MORTGAGEE A designation for the mortgage lender on lands.

MORTGAGOR A designation for the mortgage borrower on lands.

NOTE A written promise to pay a certain amount of money, at a certain time, or in a certain number of installments. It usually provides for payment of interest and its payment is at times secured by a mortgage. • The mortgage note document gives th...

PAID OUTSIDE OF CLOSING (POC) Sometimes the lender requests this money before settlement. If you pay any charges before settlement they should be written on the settlement sheet. They are written on the proper line outside of your column. They should also be marked P.O.C.

POINT A percentage point. Equal to one percent of the loan amount.

POWER OF ATTORNEY An instrument authorizing another to act on one’s behalf as his agent or attorney.

PRIVATE MORTGAGE INSURANCE (PMI) Insurance purchased by a buyer to protect the lender in the event of default. The cost of mortgage insurance is usually added to the monthly payment.

PROMISSARY NOTE A promise to pay. The promissory note document gives the mortgage company “in personam” jurisdiction over the mortgagor.

PRO-RATE To allocate between seller and buyer their proportionate share of an obligation paid or due.

PURCHASE MONEY MORTGAGE (PMM) A mortgage given by the seller simultaneously with the purchase of real estate to secure the unpaid balance of the purchase price.

REAL PROPERTY Land and that which is affixed to it, including structures and minerals.

RE-ISSUE RATE A reduced rate of title insurance premium applicable in cases where the owner of the land has been previously insured, more than once, in an owner’s policy by the insurer within a five- or ten-year period.