Archives: Glossary Terms

A deed that guarantees the quality of title to property conveyed and undertakes to defend that title and to pay damages if the title is defective.

A deed for which the consideration is for love and affection and not monetary.

A federal tax on a monetary gift to a relative or friend. Generally, each person may give up to 510,000 per year to each donee without imposition of a federal gift tax. On higher gifts. there may be a gift tax, or the gift may affect the donor’s estate tax. Example: Mr. and Mrs. Abel together give $20,000 this year to each of 3 sons ($60,000 total). There will be no gift tax imposed.

The title to a piece of real estate that generally can be shown by title search or abstract of title to be vested in the owner of record and free of claims or liens which would harm its marketability.

 

A contractual “consideration” that is based on love and affection rather than money and is usually considered to be a gift.

An honest intention to abstain from taking conscious advantage of another.

An estimate of closing costs that must be given with residential loans on one to four units under the Real Estate Sett1ement Procedures Act by a lender to a mortgage applicant within three days after the loan application based on the lender’s best estimate. Example: Gwen applied for a mortgage loan on a duplex. Within three days the mortgage banker sent a good faith estimate of closing costs including points; origination fees, title, and legal expenses.

An agreed-upon time after the payment of a debt is past due and during which time a party can perform without being considered in default.

A lease used mainly in long-term leases which provides for a varying rental rate often based upon a future determination where sometimes the rent is based upon the result of periodical appraisals. See Step-up lease.

A loan that provided for partially-deferred payments of principal during the first five years of the loan term after which the principal and interest payment is substantially higher in order to make up for the principal portion of the payments that were lost at the beginning of the loan. See Variable interest rate loan.