Glossary

Abstract - This document is a summary of the history of the title to a piece of real estate.

Appraisal - A formal, written estimation of the current market value of a home.

Closing Costs - Expenses incurred in the closing of a real estate loan or mortgage transaction.  The closing costs for the buyers and/or the sellers commonly  include, but may not be exclusive to, these fees; appraisal, credit bureau report, title insurance, flood certification, underwriting, recording, origination, and closing. Mortgage registration tax, plat drawing, name and special assessment fees apply to property in Minnesota and may be different for refinancing or purchasing property in another state.

Co-Borrower - Joint borrower with applicant who signs all documents and has title to the property.

Co-Signer - Signs the note only but does not have title to the property.

Conventional Mortgage - A typical mortgage loan not insured by FHA or guaranteed by the VA.

Credit History -  A report that will show your record of payments on loans, charge cards and other similar debts.  If you have never had a loan or a charge card, you can show that you have a good record of payment on your utility bills and rent.

Deed - A written instrument that conveys title to real property.

Down Payment - Your contribution to the sales price of the home.  You borrow the rest of the sales price with your mortgage loan.

Escrow - An account set up by the lender  into which a portion of the borrower's monthly payment is held in trust or in escrow by the lender to pay for items such as the property taxes, homeowner's insurance and private mortgage insurance.

Mortgage - Pledge of real property to secure a debt using a written instrument signed by the borrower.  This document is recorded in the County Recorder's Office.

Mortgagee - The lender in a mortgage contract.

Mortgagor - One who borrows money, giving as security a mortgage or deed of trust on real property.  With respect to a mortgage loan, the person(s) obligated to repay the mortgage note.

Private Mortgage Insurance (PMI)
- Insurance written by a private company to protect the mortgage lender against loss due to mortgage default.  PMI is typically required on loans when the borrower has less than a 20% down payment.

Title Insurance - An insurance policy which protects the insured against loss arising from defects in the title.  Title insurance is required to obtain any loan on the secondary market or in-house loans with Central Bank.