| Term |
Definition |
| Sales Concession |
Incentive to purchase a
property, such as vacations, furniture, automobiles, and securities,
and/or excess finance concessions. Also, other giveaways granted by
any interested party, including financing inducements that may be
over limitations set forth in the definition of financing
concessions (to-be sales). |
| Second Home |
One-unit property owned by
an individual, occupied by the borrower for some portion of the
year, and not subject to any timesharing ownership arrangement. The
property must be in a location where it can function reasonably as a
second home. |
| Second Trust Loan |
An alternative to private
mortgage insurance, also known as a “piggyback loan.” The most
common type is an 80/10/10 where a first mortgage is taken out for
80% of the home’s value, a down payment of 10% is made and another
10% is financed in a second trust at a higher interest rate. In some
cases, you may even qualify for a second trust loan with as little
as a 5% down payment. |
| Secured Debt |
Money borrowed that is
guaranteed (or secured) by the borrower's funds and held by the
lender in an interest-bearing account. Typically required when a
borrower is without credit or has poor credit. The lender usually
returns the secured money plus a nominal rate of earned interest to
the borrower with a certain period of time if a good credit history
is established. Distinguished from unsecured debt. |
| Security |
Property pledged to the
creditor in case of a default on a loan; also referred to as
collateral. |
| Security Interest |
The creditor's right to
take property or a portion of property offered as security. |
| Self-Employed Borrower
|
Applicant who owns 25
percent or more interest in a business. |
| Service Charge |
A component of some finance
charges, such as the fee for triggering an overdraft checking
account into use. |
| Servicing |
All the steps and
operations a lender perform to keep a loan in good standing, such as
collection of payments, payment of taxes, insurance, property
inspections and the like. |
| Settlement |
The meeting between the
buyer, seller and lender where the property and funds legally change
hands. Also referred to as Closing. |
| Settlement Costs |
Includes a loan origination
fee, points, appraisal fee, title search and insurance, survey,
taxes, deed recording fee, credit report charge and other costs
assessed at settlement. The closing costs usually are about 2
percent to 6 percent of the mortgage amount. |
| Shared Appreciation
Mortgage (SAM) |
A mortgage in which a
borrower receives a below-market interest rate in return for which a
lender (or another investor such as a family member or other
partner) receives a portion of the future appreciation in the value
of the property. May also apply to mortgages where the borrower
shares the monthly principal and interest payments with another
party in exchange for a part of the appreciation. |
| Simple Interest |
Interest that is paid on
the principal amount borrowed. Considered the best interest term for
a borrower because it is not compounded. |
| Special Assessments |
A special tax imposed on
property, individual lots or all property in the immediate area, for
road construction, sidewalks, sewers, streetlights, etc. |
| Special Lien |
A lien that binds a
specified piece of property, unlike a general lien, which is levied
against all one's assets. It creates a right to retain something of
value belonging to another person as compensation for labor,
material, or money expended in that person's behalf. In some
localities it is called "particular" lien or "specific" lien. Also
see lien. |
| Special Warranty Deed
|
A deed in which the grantor
conveys title to the grantee and agrees to protect the grantee
against title defects or claims asserted by the grantor and those
persons whose right to assert a claim against the title arose during
the period the grantor held title to the property. In a special
warranty deed the grantor guarantees to the grantee that he has done
nothing during the time he held title to the property which has, or
which might in the future, impair the grantee's title. |
| Survey |
A measurement of land,
prepared by a registered land surveyor, showing the location of the
land with reference to known points, its dimensions, and the
location and dimensions of any building.
|
