Glossary of Title Terms

Appraisal Fee

A fee charged by an appraiser to determine a property's market value based on comparable sales, improvements, location, and overall marketability.

Assumption Fee

A charge, usually paid by the buyer, for assuming an existing loan. The amount varies depending on the lender.

Clear Title

A title free of legal disputes, allowing smooth property transfer.

Closing Disclosure Form

A document introduced by the CFPB as part of TRID regulations, consolidating details previously found in the Final Truth in Lending and HUD-1 Settlement Statement.

Consummation

A CFPB-designated term referring to the finalization of a real estate closing or settlement transaction.

Consumer Financial Protection Bureau (CFPB)

A government agency created by the 2008 Dodd-Frank Act to oversee and regulate consumer financial transactions, including mortgages.

Credit Report

A document detailing an individual’s credit history, ordered by lenders to assess creditworthiness.

Deed

The official document transferring property ownership from seller to buyer.

Discount Points

Upfront fees paid to a lender to lower the interest rate on a mortgage. The cost varies by lender.

Earnest Money Deposit

A good-faith deposit made by the buyer to secure the transaction. Earnest money is held in escrow until closing.

Encumbrance

A claim, lien, or legal restriction that affects property ownership.

Escrow

A neutral third-party, like a title agency, that holds funds and documents until all conditions of a transaction are met.

Escrow Agent

A licensed professional managing the escrow process, ensuring all parties meet their contractual obligations.

Escrow Fee

A charge by the title company for handling the closing and related tasks in a real estate transaction.

E-Filing Fee

An additional charge for electronically recording documents in county records, separate from standard recording fees.

Final Truth in Lending

A now-obsolete document previously used in mortgage financing to disclose the total cost of credit, replaced by TRID regulations.

Final Settlement Statement (HUD-1)

An itemized statement of closing costs and payments between the buyer and seller. Replaced by the Closing Disclosure Form under TRID in October 2015.

Hazard Insurance

A policy covering property damage due to fire and other risks. Lenders require coverage at least equal to the loan amount.

Inspection

A property assessment conducted by an independent inspector to identify structural and system conditions. Additional inspections may include foundation, termite, appliance, septic, or well assessments.

Interest

The cost of borrowing money, expressed as a rate or percentage, charged by a lender. Types include prepaid interest, per diem interest, and total accrued interest.

Lien

A legal claim against a property, usually for unpaid debts (e.g., mortgage, taxes, contractor fees).

Loan Application Form

A TRID-compliant document, introduced in October 2015 by the CFPB, replacing the Good Faith Estimate and Initial Truth in Lending. It outlines loan terms and estimated costs.

Loan Estimate

A fee charged by lenders when applying for a mortgage. Costs vary by lender.

Loan Title Policy

A title insurance policy protecting the lender’s interest by ensuring the loan's validity and priority in the real estate transaction.

Origination Fee

A lender's charge for processing and underwriting a loan, typically structured as a flat fee or a percentage of the loan amount.

Owner’s Title Policy

Title insurance protecting a property owner against financial losses due to title defects.

Prepayment Penalty

A fee for paying off a mortgage early. Terms must be disclosed in the mortgage agreement.

Prorated Taxes

A method of dividing property taxes between the buyer and seller based on the period each party owned the property, calculated using certified figures at closing.

Realtor Commission

A percentage of the property’s sales price paid for real estate services, typically 6% in Texas, split between the listing and buyer’s agents.

Recording Fees/Filing Fees

County-imposed fees for officially recording real estate documents, based on the number of pages.

Restrictions

Covenants or regulations that limit property use within a subdivision or municipality.

Survey

A land assessment conducted by a licensed surveyor, detailing property boundaries, easements, and improvements based on its legal description.

Tax Certificates

Title company-obtained documents verifying property tax amounts, any outstanding taxes, and overall tax status.

Title

The legal ownership rights to a property.

Title Insurance

Protection for buyers and lenders against future claims or disputes over property ownership.

Title Search

A review of public records to confirm legal ownership and identify any claims or liens on the property.

TRID (TILA-RESPA Integrated Disclosures)

A CFPB-mandated regulation introduced in October 2015, requiring the use of Loan Estimate and Closing Disclosure forms to provide consumers with clearer mortgage details.

Warranty Deed

A document ensuring the seller has a clear title and legal right to transfer ownership.