Page 22 - CTT-CA Real Estate Foreign Buyer & Seller Guide_English

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The following is a short glossary of commonly used terms during your escrow transac- tion. For a more complete glossary, please visit www.Chicago.Title.com
Adjustable Rate Mortgage (ARM): A mortgage in which the interest rate is ad- justed periodically in
accordance with a market indicator, to more closely coincide with the current rates. Also sometimes known as renegotiable rate mortgage, the variable rate mortgage, or the graduated rate mortgage.
Amortization: Reduction of the principal of a debt in regular, periodic install- ments.
Annual Percentage Rate (APR): An interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account point and other credit cost. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan.
Assumption of Mortgage: An obligation undertaken by a new purchaser of land to be liable for payment of an existing note secured by a mortgage.
Caps: Consumer safeguards that limit the amount the interest rate on an adjustable rate mortgage can change at each adjustment or over the life of the loan.
Conditions, Covenants & Restrictions (CC&R’s): A document that controls the use, requirements and restrictions of a property.
Certificate of Reasonable Value (CRV): An appraisal issued by the Veterans Ad- ministration showing the property’s current market value.
Closing (also called “settlement”): The completion of a real estate transfer, where the title passes from seller to buyer, or a mortgage lien is given to secure debt.
Condominium: A statutory form of real estate development of separately- owned units and jointly-owned common elements in a multi-unit project.
Conventional Mortgage: A mortgage securing a loan made by investors without governmental underwriting, i.e., a loan which is not FHA insured or VA guaran- teed.
Deed: Written instrument which, when properly executed and delivered, conveys title.
Glossary
F TERMS