Annual Percentage Rate :
Also referred to as APR, this is the cost of credit expressed as a yearly rate. It is a technical calculation that incorporates the costs of obtaining your loan. Therefore, it is often slightly higher than the interest rate on your note. You will see it expressed on the Truth-in-Lending Disclosure Statement.

Good Faith Estimate :
Your lender will provide to you a Good Faith Estimate disclosing all the estimated amounts and types of costs you should expect to pay in order to consummate the loan. It generally reflects the same format as the final Settlement Statement. Please remember, although the estimate must bear a reasonable relation to the actual costs, it is only an estimate. Be prepared for the final figures to vary somewhat.

Hazard Insurance - All lenders require that the homeowner carry hazard insurance on the property listing the lender as a lienholder. This insurance will protect you from risks of loss and liability. Sometimes, flood insurance is also required if your property is located in a flood zone. Failure to carry any insurance required by the lender could be considered a default under your mortgage.

HUD-1 (Settlement Statement J :
The Real Estate Settlement Procedures Act (RESPA) requires the use of the HUD-1. It is a uniform settlement statement setting forth the accounting of funds from a real estate sale, made to both the seller and the buyer separately. All charges imposed on the borrowers and the sellers are itemized on the form.

Mortgage Insurance :
Frequently called private mortgage insurance, or PMI, this insurance protects the lender against nonpayment or default on the loan. It is often a condition of the loan if you are borrowing more than 80% of the property value to purchase the home. Under certain loan programs and conditions, you have the right to request cancellation of PMI once the principal balance of your loan reaches 80% of the property value.

Note :
The written instrument that acknowledges a debt and a promise to pay is commonly known as a note. It contains your loan amount, interest rate, first payment date, maturity date, principal and interest amount due monthly and any penalties for late payments. It can be a fixed or adjustable rate, the terms of which are disclosed in the note.

Planned Unit Development (PUD) :
A PUD is a property wherein a parcel of land is improved with a dwelling, together with other such parcels, common areas and facilities recorded in the county plat book. Most neighborhoods are PUDs and require that you agree to be bound by the neighborhood covenants, conditions and restrictions. The PUD Rider is signed at closing and recorded with the Security Deed.

Prepaid interest to the lender :
The interest on your note is always paid in arrears. In other words, the current month’s payment includes last month’s interest. On the date of closing, you will pay the interest from the date of closing through the end of that month, known as prepaid interest.

Property Surveys - Most people do not like to go to the expense of obtaining an accurate survey prior to closing, but such a survey is vital to protect your property rights. A survey will disclose your boundary lines, easements, encroachments and improvements on the property. It is important to have this completed prior to closing so that the seller can be required to clear up any problems with the property’s title before closing.

Pro-ration of Taxes :
Property taxes in South Carolina are due at the end of the calendar year. Whoever owns the property on the due date must pay for the entire twelve months. Therefore, the annual taxes are prorated between the buyer and the seller as of the closing date. Your portion will show as a credit or a debit depending on several factors including whether you close before or after the taxes are due.

Security Deed/Mortgage :
This legal instrument pledges your house as collateral for the loan you obtained to purchase the house. It is recorded in the county records where the property is located and effectively puts a lien on your house for the loan amount. The security deed allows the property to be sold utilizing foreclosure proceeding if you fail to pay your mortgage.

Termite/HVAC Letters - All lenders normally insist, and you as a buyer should insist, that the seller provide proof that the property is free from termites and that the heating and air unit is operational. Documents confirming this (known as CL-100) should be provided by reputable companies before closing. That way, any problems that need to be addressed before closing can be.

The Real Estate Contract - Agreements to sell or buy land are not enforceable unless there is a written and signed contract. The buyer, makes an offer on a home by signing a contract. Once all parties have signed this contract, it becomes a binding obligation on all parties. An attorney should review this contract prior to signing to make sure you understand your rights and obligations under the contract. All the terms of the agreement must be included in this contract since verbal agreements concerning the sale of real estate are not legally enforceable. We review real estate contracts to assure they accurately represent our client’s intentions and protects their interests. It is equally important for a seller to have a contract with the buyer. We review and prepare such contracts often and explain their meanings to our clients.

Title Insurance - Lenders title insurance is required by the lender to protect against defects in the title that were not discovered by a title search. For a nominal fee, the owner can also purchase owner’s title insurance to protect his interests. This is a one time premium paid at closing.

Title Search - Your attorney will search the public records to ensure that the seller has a good title and can actually sell the property to you “free and clear.” A title search will disclose the owners of the property, whether there are any liens or judgments on the property, and whether there are any restrictions or easements on the property.

Truth-in-Lending :
Federal law requires that lenders provide consumers with information for their use of credit. Lenders must disclose to the borrower the true costs of a loan which is shown on the Federal Truth-in-Lending Disclosure Statement, a document you will sign at closing.

Warranty Deed :
The warranty deed is the written document that transfers ownership of the property from the seller to the buyer. It assures good title to the property, freedom from encumbrances, and quiet enjoyment.