Title Company Terms You Should Know in Lubbock, TX
Common Title Service, Title Insurance, Escrow Service, and Closing Terms
A
Abstract of Title: summarized written history of all titles, transfers, and legal actions connected with a piece of real property
Adverse Possession: the occupation of land to which another person has a title with the intention of possessing it as one's own
Amortization: the action or process of reducing or paying off a debt with regular payments
APR (Annual Percentage Rate): the annual rate that is charged for borrowing money
Appraisal: An estimate of the value of the property from analysis of facts about the property
B
Basic Rate: in title insurance, the basic rate is the rate charged to a consumer who does not qualify for a reduced rate
Beneficiary: the recipient of benefits, often from a deed of trust; usually the lender
Broker: someone who acts as an agent for another in negotiating sales or purchases in return for a fee or commission
Brokerage: fee or commission paid to a broker
C
Chain of Title: sequence of historical transfers of Title (ownership) to a property. A good chain will run from the present owner to the original owner or the soil
Closing: the process of completing a real estate transaction during which deeds, mortgages, leases, and other required instruments are signed and delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all further details such as payment of outstanding liens and transfer of hazard insurance policies are attended to
Closing Disclosure (CD): a document that provides the final mortgage details must be delivered to consumers three business days before they close on the loan
Closing Statement: a document that provides the closing details of a transaction and shows amounts of debits and credits to each transaction party
Cloud on Title: an irregularity, possible claim, or encumbrance which could affect or impair the title
Contract: a formal agreement
D
Deed: a written document by which the title to real estate is conveyed from one party to another
Deed of Trust: a trust instrument that transfers interest in real property. In Texas, a deed of trust is most commonly used to secure a loan to purchase a home or other real property until that loan is repaid and the trust is voided, similar to how mortgages are used in other states
Deed Restrictions: a written agreement that limits the use or activities that may take place on a piece of real property.
Defect: a blemish or imperfection found in the chain of title; a defective title is imperfect or faulty
Disbursement Date: the date amounts are to be given to a buyer or seller in a real property transaction or the date funds are to be paid to the borrower or a third party in a transaction that is not a purchase transaction
E
Earnest Money: a small part of the purchase price made by the borrower as a sign of good faith
Easement: right held by a person to enjoy or make limited use of another's real property
Eminent Domain: the right of a government to take privately owned property for public purposes under condemnation proceedings upon payment of its reasonable value
Encroachment: extension of a structure from the real estate to which it belongs across a boundary line and onto adjoining property
Encumbrance: claim, right, or lien upon the Title to real estate held by someone other than the real estate owner
Escrow: the depositing of anything about a real estate transaction to an impartial third party (title company); money and documents are to be disbursed and delivered to the rightful parties by the title company when all conditions of the transaction/contract have been met
Examination: to peruse and study the instruments in a chain of Title and to determine their effect and condition to conclude as to the status of the title
Exceptions: a list of items excluded from coverage of the title insurance policy; these items can be found in section two of Schedule B
F
First Mortgage: a mortgage having priority as a lien over any other mortgage or lien on the same property
G
General Warranty: a warranty provision in a real estate instrument containing all of the everyday law items of warranty
H
Hazard Insurance: real estate insurance protects against fire, natural causes, vandalism, etc.
I
Ingress: the right to enter; the means or place of entry
Intestate: dying without leaving a legal will
J
Joint Tenants: multiple people hold Title to a piece of real property, with equal rights to share in its enjoyment during their respective lives with provisions that upon the death of a tenant, their rights will pass to the surviving tenants until the full title is vested in the sole surviving tenant. A joint tenant can neither sell nor encumber the real property without the consent of all other joint tenants
Judgment: a conclusion or determination by a court of law usually awarding the payment of money or relief of some kind to one of the parties to a lawsuit
L
Legal Description: based on government surveys and recognized by law, a legal description spells out the exact boundaries of a parcel of land and should do so thoroughly that that parcel cannot be confused with another
Lender's Policy: protects your lender against problems with the title to your property as someone with a legal claim against the home; a lender's policy does not protect the consumer from such issues
Lien: a right to keep Possession of property belonging to another person until a debt owed by that person is discharged; judgments, taxes, mortgages, and deeds of trusts are considered liens
Loan Estimate: a form designed to provide information about key features, costs, and risks of the mortgage loan for which the consumer is applying; must be provided to the consumer no later than three business days after applying for the loan
M
Marketable Title: a title that a court of equity considers to be free and clear of defects and liens that it will legally force its acceptance by the buyer
Market Value: the average between the highest price that a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing but not compelled to sell, would accept
Mechanic's Lien: a lien put on real estate when debts are due to those who have provided labor or supplies to improve the real property; usually filed by contractors, subcontractors, or supplies who were not paid for services
Metes and Bounds: a system of describing land, real property, or real estate that uses courses, directions, distances, and monuments
Mortgage: a temporary conditional pledge of property to a creditor as security for the payment of a debt that may be canceled by payment
O
Opinion (Title Opinion): the conclusion and judgment of the title as based upon title examination
Owner's Policy: an insurance policy that protects the owner and their heirs for as long as they own the real property outlined within the policy; only the owner's policy will cover the buyer if a title issue such as errors or omissions in deeds, mistakes in examining records, forgery, and undisclosed heirs, should arise; an owner's policy is paid for with a one-time payment
P
PITI-Principle, Interest, Taxes, Insurance: mortgage payment that includes the principal, interest, taxes, and insurance included in the mortgage
Power of Attorney: a legal instrument authorizing one to act as another's agent or attorney
Preliminary Title Report: a report documenting the current ownership of the real property in question; this report may include information about liens and encumbrances that will not be covered under a title insurance policy
Premium: the amount payable for an insurance policy
Probate: the process to prove the validity of a will to be provided as a public record
Promissory Note: a written promise to pay or repay a specified sum of money at a stated time to a named person
Public Records: documents or pieces of information that are not considered confidential and have been filed in a recorder's office
Q
Quit Claim Deed: used to transfer property interest from one person (grantor) to another (grantee)
R
Recording: process of filing documents that affect real property with the appropriate government agency as a matter of public record
Refinance Rate: the reduced rate for a loan policy issued on the new loan in a refinance transaction, in which the original loan was previously insured within some period of years
Reissue Rate: the reduced rate for an owner's policy of title insurance issued on a property that was previously insured within some period of year
S
Search: a careful exploration and inspection of the public records in an effort to find all recorded instruments relating to a particular chain of the title
Settlement Statement: the document that provides a detailed breakdown of costs involved in a real estate transaction
Specialty Warranty Deed: a deed to real estate where the seller does not guarantee against any defects in the title that existed before they took Possession of the real property
Subdivision: an area of land divided into lots, blocks, and building sites in which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities
Survey: The map or plat drawn by a surveyor who has examined a particular area of land
T
Tax Lien: a lien that is imposed upon real estate by operation of law that secures the payment of real estate taxes
TILA-RESPA Integrated Disclosure (TRID): a rule to help borrowers understand the terms of their financial transaction; TILA: Truth in Lending Act; RESPA: Real Estate Settlement Procedures Act
Title: a combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy, and dispose of real estate or an inheritable right or interest therein; the rights of ownership recognized and protected by the law
Title Commitment: an offer to issue a title insurance policy that describes conditions, exclusions, and exceptions that will apply to that specific policy
Title Defect: any potential threat to a person's full right or claim to own or sell real property
Title Examination: to peruse and study the instruments in a chain of Title and to determine their effect and condition in order to conclude the status of the title
Title Insurance: insurance that protects purchasers of real estate and mortgages against loss from defective titles, liens, and encumbrances
Title Plant: a geographically filed assemblage of title information that is to help in expediting title examinations, such as copies of previous attorneys' opinions, abstracts, tax searches, and copies or take-offs of the public records
Title Search: a search and perusal of the public records for recorded instruments that affect the Title to a particular piece of land; also known as Title Examination or Abstract of Title
U
Underwriter: an insurance company that issues the insurance policy either to another company or to the public
V
Vesting: how ownership of the title is taken
W
Warranty Deed: a deed where the grantor guarantees that he or she holds clear Title to a piece of real estate and has a right to sell it to the grantee