Appraisal Fee — Cost of independent evaluation of the value of the property. (Generally $250-$500).
Closing Disclosure — The document which sets forth all of the expenses for the Buyer and the Seller.
Consumer — Another name for the Borrower. As the purchaser, if you take out a loan, you are the consumer.
County Transfer Tax — Charge to transfer title to real property. In Montgomery County the charge is 1% of the total consideration (sales price) on homes over $70,000.00, 1/2% on homes between $40,000.00 and $70,000.00, and 1/4% on homes under $40,000.00. The Transfer Tax in Prince George’s County is 1.4%.
Consummation — Another term for the settlement or closing.
Credit Report Fee — Charge by lender for research to verify personal financial status. (Generally $50-$125).
Deed — The legal document which transfers ownership of real property. Recording the deed in the land records is notice to the world as to ownership of the property. The title may be issued solely to the purchaser or with another individual(s) by (1) Tenancy in Common, (2) Joint Tenancy, or (3) Tenancy by the Entirety. For a more detailed discussion of the methods of taking title, see pages 34-35 of our free book ‘Ask The Lawyer’. (Download Ask The Lawyer (PDF) here.)
Deed of Trust or Mortgage — The document which pledges the real property as security for repayment of the amount of money borrowed. It is recorded in the land records to put everyone on notice that the property is security for the debt.
Deposit — An amount of money paid with the initial contract offer and held by the broker or title company until settlement.
Escrow — Sum of money held by the lender to be applied toward payment of future taxes and/or insurance. May also be sum of money set aside at settlement to ensure completion of repairs.
Hazard Insurance — Insurance which protects borrower and lender against fire and other natural hazards. Sometimes this is called Homeowner’s Insurance
Interest Adjustment — Unlike rent, which is generally paid in advance, interest on mortgage loans is paid after it is earned. The one exception occurs at settlement. Lenders collect interest from the date of settlement until the end of the month in which settlement occurs. This allows subsequent mortgage payments to fall due on the first day of the month.
Loan Estimate — The lender’s estimated summary of your settlement charges. You will receive this within 3 days of loan application.
Lender — The company that gives you the loan. Also called the “creditor.”
Loan Origination Fee or Origination Charges — Lender’s fee for administration and processing of a loan. A “point” is equal to 1% of the loan amount. This fee will appear on the Closing Disclosure as part of the Origination Charges.
Mortgage Insurance — Insurance which protects the lender against loss if the borrower defaults on the loan and the property is foreclosed upon.
Promissory Note — The written promise by the borrower to pay the amount of money borrowed from the bank, seller, or other lender.
Property Tax Adjustment — Reimbursement to the seller for taxes prepaid by seller from the date of settlement through the end of the tax year. (June 30 of each year).
Recording Fees — Fees paid to the Clerk of the Court for recording the documents among the County land records. Recording of a Deed costs approximately $60.00 and recording a Deed of Trust or Mortgage costs approximately $60.00.
State Revenue Stamps — Tax on recording of a document of title or security, such as a Deed of Trust. In Montgomery County the charge is $6.90 per $1,000.00 of consideration paid up to $500,000.00 and $10.00 per $1000 above $500,000.00 of consideration, while in Frederick County the charge is $12.00 per $1,000.00 of consideration paid. In Prince Georges County, the charge is $5.50 per $1,000 of consideration paid.
State Transfer Tax — Charge of 1/2% of the sales price of property in all Maryland counties to transfer title to real property. If the buyer is a First-Time Maryland Home Buyer, the tax is reduced to 1/4% and must be paid by the seller.
Title Abstract — Report of the land, lien and judgment records to ascertain ownership and status of title to real property. Cost is approximately $195.00 per search.
Title Examination — At Village Settlements, Inc., an attorney will carefully review every title abstract and survey. The fee for this service is included in the Settlement Fee.
Title Insurance — Insurance which protects against defects in the title such as forged deeds, missing heirs, outstanding liens or mortgages. It is a one-time premium, and the insurance coverage is in effect for as long as you own the property. Lenders usually require that buyers pay for a policy of title insurance to insure the amount of the loan. Title insurance to protect the purchaser in the amount of the sales price is optional. (See Title Insurance for more information.)
TRID — A short term name for the new loan disclosure laws. It stands for Truth-In-Lending, Real Estate Settlement Procedures Act Integrated Disclosures.