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Title Insurance Terminology

Abstract Title

A condensed history or a summary of all transactions affecting a particular area of land.

Adjustable Rate Mortgages

Mortgage with an interest rate that can change up or down depending on an indicator. These are often based on something like the current rate of Treasury bills.

Sworn Declaration

An affidavit.

Title insurance all inclusive

Florida title insurance which includes all charges in one price


To reduce debt by regular periodic payments that include amounts applicable to principal and interest.

APR – Annual Percentage Rate

Annual percentage rate, a measure of the cost of credit that must be reported by lenders under the Truth in Lending regulations. APR takes into account the interest rate in advance fees paid by the borrower. In some mortgage the APR is higher than the actual rate mortgage.


A mortgage that allows a new owner to take over the payments. The original borrower remains subject in the mortgage note.


A written document by which the land is transferred from one person to another.

Deed of Trust

Instrument used to secure a loan for real estate. Like a mortgage, deed of trust is generally used in the south. The main difference is in how foreclosures are handled. Foreclosures are much faster with a trust deed with a mortgage.

Earnest Money Deposit 

The advance payment of a portion of the purchase price to force a contract on the property.

Due-on-Sale Clause

A provision in a mortgage or deed of trust that requires the loan is paid in full if a property is a tract of land sold or transferred.


The interest or value that an owner has in real estate over the debts against it.


(1) A method by which a disinterested third party handles legal documents and funds on behalf of a seller and a buyer. (2) The money held by the mortgage company to ensure that taxes can be paid in full at maturity. Security deposit is paid in advance on the lines of the settlement sheet 1001 – 1006 and added to the monthly mortgage payment on the amount of capital and interest.

FNMA (Fannie-Mae)

The Federal National Mortgage Association, is a private corporation funded by the federal government that provides a secondary market for home mortgages.

Fixed Rate Mortgage

Mortgages with fixed interest rate. The payment of principal and interest will not change over the life of the loan, but the monthly payment may change if taxes or insurance rates change.

FHA – Federal Housing Administration

A federal agency that insures private loans to finance new and existing housing and home repairs approved under the government program.

FHLMC (Freddie Mac) – Federal Home Loan Mortgage Corporation

A member of the Federal Home Loan Bank creates a secondary market for conventional home loans and FHA and VA loans by purchasing mortgages from members of the Federal Reserve System and the Federal Home Loan Bank System.


Legal process by which a mortgagor of property is deprived of his interest in the property because of failure to comply with the terms and conditions of the mortgage.


A person who acquires an interest in land by deed, grant or other written instrument.


A person who, by written instrument transfers interest in the land.

Hazard Insurance

Insurance policy homeowner.


One who could inherit or succeed with an interest in the land under the rules of law when a person dies without a will.

In personam

Involving specific and non-property or in general, for all persons.

In rem

Belonging to property or people in general.

Interest only payments

A mortgage where you pay only the interest on a monthly basis. This means that the buyer receives no equity. This is only used in some mortgage purchase money the buyer is responsible to pay the seller the full amount of the second mortgage at some point in the future.


A written document.

Loan origination fees

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


A decree of a court.


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

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.


A designation for the mortgage lender on property.


A designation for the mortgage borrower on property.


Mortgage Insurance Protection. 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 the mortgage company “in rem” jurisdiction over the mortgagor.
  • The promissory note document gives the mortgage company “in personam” jurisdiction over the mortgagor.


Paid outside of closing. 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.


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 protects the lender from the losses that would occur in the case of foreclosure.

PMM – Purchase Money Mortgage

A mortgage given by the seller simultaneously with the purchase of real estate to secure the unpaid balance of the purchase price.


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

Promissory Note

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

Real Property

Land and that which is affixed to it.

Reissue Rate

reduced rate of title insurance premium applicable in cases where the owner of the land has been previously insured in an owner’s policy by the insurer within a certain time.

Second Mortgage

A mortgage, the lien of which is subordinate to that of another mortgage.


The process of measuring land to determine its size, location and physical description and the resulting drawing or map.

Tax Service Fee

A fee paid to the mortgage company to verify that they actually pay the real estate taxes.


The evidence or right a person has to the ownership and possession of land.

Title Insurance

Insurance against loss or damage resulting in defects or failure of title to a particular parcel of real property.

Title Insurance Binder or Commitment

A report issued by a title insurance company binding or committing the title insurance company to issue the form of policy designated in the commitment or binder upon compliance with and satisfaction of requirements set forth in the commitment or binder.

Title Search

An examination of public records and court decisions to disclose the current facts regarding ownership of real estate.

Transfer taxes

Money paid to the county and or state when property is sold.

VA – The Veterans Administration

The Veterans Administration insures mortgages. A VA Mortgage is a mortgage that is guaranteed by the Department of Veterans Affairs (VA). Also known as a government mortgage.


A written document properly witnessed, providing for the distribution of property owned by the deceased.

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