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2020 Buyer's Guide Glossary

GLOSSARY OF TERMS

Fair Market Value Survey
The price at which a willing seller would sell and a Survey of property required by the lender or title
willing buyer would buy, neither being under insurer. Survey will show lot size, easements, any
abnormal pressure. encroachments, locations of improvements, etc.

Loan Origination Fee Tax Service Fees
Normally 1% of the loan amount, charged by the Required by the lender for collection and
lender to the buyer. disbursement of taxes by a servicing company.

Mortgage Termite Inspection (Wood Infestation)
A legal document that provides security for Required by buyer or lender to show property is free
repayment of a promissory note. and clear of active termites and any wood
destroying insects.
Mortgage Title Policy
Required by lenders to ensure a valid lien. It does Title Policy
not protect the buyer. Also required for 2nd Insurance policy of the ownership of real property
mortgages. against defects in title.

Owner's Title Policy Title
Insures the buyer against loss due to any defects of Means ownership in dealing with real property.
the title not excepted to or excluded from the policy.

Underwriting Fee
Points Charges by the lender to underwrite a loan.
Paid by the buyer or seller. One point is equal to
one percent of the loan amount. VA Funding Fee
Veteran's Administration charge for originating a VA
Principal loan.
The employer of an agent in an agency relationship.
Warehouse Fee
Recording Fee Charged by the lender to hold the loan locally
Charged by the County Recorder to record before selling it in the secondary mortgage market
documents in the public records. to an investor.

Septic Inspection Zoning
The septic system must be certified by a state Act of city authorities specifying type of use for
approved inspector. property.

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