| 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. |
