Entries for June, 2011

What is Lien Priority?

If there are two or more liens on a property, the priority of liens determines the order in which the liens will be satisfied if the property must be sold.  The priority of most liens is the date and time that the lien was recorded in the public records.  Real estate (property) tax liens and [...]

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What Does The Term Realtor Mean?

As a home buyer, you should know that the term Realtor identifies a licensed professional in real estate who is a member of the National Assocation of Realtors.  Not all licensed real estate brokers and salespersons are members of the National Association and only those who are can identify themselves as Realtors.

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What is an Escalator Clause?

An Escalator Clause is a clause in a contract, lease or mortgage that allows for increases in wages, rent, interest based fluctuations in certain economic indexes, costs or taxes.

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What Does PUD Stand For?

A planned unit development (PUD) permits a mix of land uses along with a high density of residential units.  The common areas of the grounds are owned by a community association, not by individuals.  Most PUD’s include residential areas, shopping areas, and professional offices.

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What is a Prepayment Clause?

A  prepayment clause allows the borrower to pay off part or all of the debt, without penalty or other fees, prior to the majority.  A prepayment clause usually stipulates conditions and terms under which the mortgage loan may be prepaid.

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What is an Exculpatory Clause?

This clause requires that the Lender waive the right to a deficiency judgment against the borrower.  It relieves the borrower of personal liability to repay the loan

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What is the Affiliated Business Arrangement Disclosure?

When a lender, real estate broker or other closing participant refers a borrower to an afilliate for a settlement service, RESPA requires the referring party to give the borrower an Affiliated Business Arrangement Disclosure.  This form explains to the borrower, that they are not required, with certain exceptions, to use the affiliate and are free [...]

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What Does GFE Stand For?

GFE is a Good Faith Estimate and is a document that a Lender is required to prospective Borrower when they apply for a mortgage loan.  The GFE is an estimate of all closing costs and fees required for the proposed mortgage loan.

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What Does RESPA Stand For?

RESPA stands for Real Estate Settlement Procedures Act and is a consumer protection law intended to ensure that buyers are informed regarding the amount and type of charges they will pay at closing.    The Real Estate Settlement Procedures Act (RESPA) insures that consumers are provided with more helpful information about the cost of the mortgage [...]

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What is the Annual Percentage Rate (APR)?

The annual percentage rate (APR) includes the interest rate and other loan costs and represents the true yearly cost of credit.

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