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Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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1-4 Family Rider ( Assignment of Rents )
The Family Rider transfers the owner's right to collect rents to the lender. Another interesting feature of the Family Rider is that it could stipulate that additional property is subject to the security instrument such as...

Acceleration Clause
This clause allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire outstanding balance of the loan should you default on your loan.

"Acknowledgment"
1. The act of admitting or recognizing the existence of an agreement by signing as evidence of one's intention that the agreement shall be binding and in full force and effect. 2. The certificate affixed to the document...

Addendum to the HUD
This document is prepared by the closing agent and discloses all fees and costs involved in the loan and is required by Federal Law. It includes the loan amount, loan fees, charges, proration of real estate taxes, and...

Address Certification
The Address Certification document requires the borrower to verify the address of the property mentioned in the Deed of Trust.

Adjustable Rate Mortgage (ARM)
An Adjustable Rate Mortgage (ARM) is a mortgage in which the interest rate is adjusted periodically based on a pre selected index. Also sometimes known as the renegotiable rate mortgage, or the variable rate mortgage...

Adjustable Rate Note
A Note that is included with an adjustable rate mortgage. An adjustable rate Note contains information about what the initial interest rate is, when it can be adjusted, and by how much it can be adjusted. Please see...

Adjustable Rate Rider
The Adjustable Rate Rider document calculates the interest rate and monthly payments the borrower must make with an Adjustable Rate Mortgage. The interest rate would be based on the US Treasury Index at any...

Adjustment Date
The Adjustment Date is the date on which the interest rate changes or is "adjusted" in an adjustable-rate mortgage (ARM).

Adjustment Interval
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three, or five years. If your adjustment interval is one year, then changes to your rate and...

Adjustment Period
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

Administer
To give in a formal way. A notary might administer an Oath or Affirmation for example. An example of a sentence with administer could be, "The Notary administered an oath on a Jurat", or, "The Notary...

Affiant
The person who takes an oath or affirmation. The person to whom an oath or affirmation is administered who is sometimes called a deponent. Many documents will have a signature area for the affiant who swore...

Affidavit
A document that contains a statement, made under oath or affirmation, signed by the affiant and a jurat certificate signed and sealed by a notary. The most common type of affidavit that gets notarized is an...

Affirmation
A solemn statement, equivalent by law to an oath, but without religious significance or reference to a Supreme Being. Wording for Oaths and Affirmations is up to the notary, but common wording could be, "Do you...

Affix
To secure an object to another. To attach, or add to. In the notary context, affix is typically used when speaking of affixing one's stamp or seal to an instrument. The word instrument is a formal term for a...

Amortization
Amortization means loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

Amortization Term
The amount of time required to amortize a mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months...

Annual Percentage Rate (APR)
The Annual Percentage Rate ( APR ) reflects the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account...

Annual percentage yield (APY)
The rate of interest earned by an account owner in a year, if no withdrawals occur. All financial institutions must calculate the Annual Percentage Yield ( APY ) in the same way.

Appear before
Notary acts require the signer or affiant to appear before the notary public. There was a case where a person in jail was in a window of a room fifty feet away. The notary could not clearly see the signer, therefore,...

Application
A document which is often up to eight pages long, commonly referred to as "The 1003". It is used to apply for a mortgage and to provide information regarding a prospective mortgagor and the proposed security...

Appraisal
An appraisal is an estimate of the value of property, made by a qualified professional called an "appraiser". Part of the reason for our current loan crisis, is that many appraisers were coerced into inflating the...

Appraiser
A person qualified by education, training, and experience who estimates the value of real property and personal property. A person has to take classes to become an appraiser, and then it is common to apprentice...

Appreciation
An increase in the value of a property due to changes in market conditions or other causes. The opposite of appreciation is depreciation. In 2008 it became clear that the availability or lack of availability of credit...

Apostille
An Apostille is an authentication document used in countries that are Hague Convention members. To get an apostille in the United States, one generally needs to contact the state notary division from the state...

Application
To become a notary, it is necessary to file an application with your state's notary division. Each state has its own requirements, so please check with your state's notary division. Contact information is available...

APR
The APR is different from the rate. Everyone we've talked to has a different way of understanding this concept. Here is the clearest way we've come across: The APR is the annual percentage relationship between the...

Appointment
An appointment is the act of designating an individual for an office or position. The Secretary of State of a particular state could appoint an individual to become a Notary Public which is an example of how to use...

Arbitration Rider
By signing an arbitration rider, the borrower consents to having an arbitrator resolve all future disagreements regarding the loan rather than settle in court. Since the lender is the party that chooses the arbitrator, the...

Asset
An asset is anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).

Assignment
An assignment is the transfer of a mortgage from one person to another.

Assumable mortgage
An assumable mortgage is one that can be taken over ("assumed") by the buyer when a home is sold. One condition of an assumable mortgage is that the lender must approve of the new home buyer. One...

Assumption
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage...

Assumption clause
An assumption clause is a provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale...

Assumption fee
The assumption fee is a fee paid to a lender resulting from the assumption of an existing mortgage. The fee is generally paid by the purchaser. Since all loans have a variety of fees, it might be very favorable to the...

Attest
To affirm to be true, correct, or genuine; to corroborate. A document signer could attest to the fact that the contents of the document were true and correct.

Attorney in Fact
A person who has been given written authority to act on the behalf of another is an attorney in fact. The document giving the authority is a "power of attorney". Someone who is an attorney in fact may have...

Authenticate
To prove or verify as genuine. An Authentication certificate is a very important document that is from the Notary's state's Secretary of State or Notary Division that validates that the notary's seal and information are...

Backdating
Sometimes the 1003 is backdated or the lender will leave instructions not to date it at all. Why? Because the borrower, most likely, has submitted a more user-friendly form to the borrower, of which contains...

Balloon Mortgage
A Balloon Mortgage is usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a contractually specified...

Balloon Payment
A balloon payment is the final lump sum payment that is made at the maturity date of a balloon mortgage. To make a balloon payment, many borrowers might refinance or sell another asset to be able to make...

Basis Point
A basis point is 1/100th of a percentage point. For example, a fee calculated as 50 basis points of a loan amount of $100,000 would be 0.50% or $500. A basis point is commonly used for calculating changes in...

Beneficial Interest
Notarizing a document for a family member, or a document in which the notary is named, or has financial interest, could constitute beneficial interest. A Notary should avoid notarizing documents in which he or she...

Beneficiary
The person designated to receive the income from a trust, estate, deed of trust, or insurance policy can be called a beneficiary.

Birth Certificates
A Notary generally can not certify a copy of or notarize a birth certificate. This would be subject to state laws. However, it is common for a signer to swear an oath that a copy of a birth certificate is a true, correct,...

Biweekly Payment Mortgage
A mortgage that requires payments to reduce the debt every two weeks instead of the standard monthly payment schedule is a biweekly payment mortgage. The 26 or possibly 27 biweekly payments are each...

Blanket Mortgage
A blanket mortgage is a mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project. Blanket loans are popular with builders and developers who buy...

Blank Spaces in documents
A Notary should not notarize a document with blank spaces. If a notary notarizes a document with blank spaces, the signer or other party could fill in anything in those blank statements, thus changing the content of...

Bond
Many states require notaries to carry a surety bond to protect others from any misconduct or mistake. Should the Notary be liable for monetary sums, the bonding company would be liable to pay whatever was...

Borrower's Certification & Authorization
This document has the borrower certify that all the information within the loan application is correct. The borrower's certification and authorization also authorizes the lender to share information in the loan...

Breach
A violation of any legal obligation could be called a "Breach of contract".

Bridge Loan
A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also...

Broker
A person who brings parties together and assists in negotiating contracts between them for a commission or fee.

Buydown Mortgage
A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower's monthly payments during the first few years of a mortgage. A permanent buydown reduces the...

Cap
A cap is a provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments can increase or decrease.

Capacity
Refers to the signers official job identity when signing a document. A signer could sign in the capacity of themself as an individual, or as a president of a particular company. Being an attorney is another common...

Capital Improvement
Any structure or component erected as a permanent improvement to real property that increases its value. Building a deck on a house could be said to be a capital improvement.

Cash-out Refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy...

Certificate
A certificate is a written statement, signed by an official, describing acts performed in an official capacity. A notary certificate would generally include a venue which would indicate the state and county where the...

Certificate of Title
A Certificate of Title is a statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner. In addition to identifying the current owner, a...

Certified
A document or fact that has been verified, proven correct, or attested to. To have passed a test that verifies that an individual meets a particular standard of knowledge.

Certified Copy
An exact copy of an original document. In California, notaries may only certify copies of power of attorney documents. Another type of certified copy is called a certified copy by document custodian which requires...

Certified Notary Signing Agent
A certified notary signing agent is one who has been certified by a company that trains notaries. No state government governs or participates in the certifying of signing agents. If a notary identifies themselves as...

Certify
To verify or attest to the correctness of a document or a fact.

Chain of Title
The history of all of the documents that transfer title to a parcel of real property, beginning with the earliest existing document and ending with the most recent. In the film industry, the chain of title involves a series of...

Clear Title
A title that is free of liens or legal questions as to ownership of the property is a clear title. It is critical to know if a property has a clear title when making a purchase to avoid any legal issues. Commonly a buyer will...

Closing
The meeting between the buyer, seller, and lender or their agents where the property and funds legally change hands. Also called a settlement. A loan closing would have a very different meaning.

Closing Accommodation Rider
This document is not in all loan packages. However, if it is in a loan package, it must be signed before proceeding to the other loan documents. The Closing Accomodation Rider states that the loan has been...

Closing Agent
Closing agents can be the lender, escrow, title, closing service companies, etc. A closing agent actually performs the closing process, which includes, disbursement of funds, the issuing of title insurance, if...

Closing Costs
Closing costs usually include a loan origination fee, discount points, appraisal fee, notary fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement...

Closing Instructions
An outline of the loan package including the terms of the loan, fees, and a list of individual documents within the package. The closing instructions may or may not require a borrower's signature. The closing...

Closing Statement
A Closing Statement - also referred to as the HUD-1. The HUD-1 is the final statement of costs incurred to close on a loan or to purchase a home. The "HUD" as lenders often call it is often faxed to the notary signing...

Collateral
An asset such as a car, boat, or a home that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

Co-maker
A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the payments.

Combination Loan
With a combination loan, you receive a first mortgage for 80% of the loan amount, and a second mortgage at the same time for the remainder of the balance. If avoiding PMI (mortgage insurance) is important...

Combined loan-to-value (CLTV)
The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value. Combined loan to value is a ratio used by lenders to determine how risky a...

Commission
1. A document describing the notary's appointment and term of office is a notary commission. A notary commission is good for several years, but the exact duration varies from state to state. A California...

Commitment Letter
A commitment letter is a formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. A commitment letter is also known as a "loan commitment", firm commitment, or a...

Common Areas
Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative...

Community Property
In many states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse. Division of community property...

Competence
The ability to understand. A notary should be comfortable that all parties understand what they are signing or affirming, especially when notarizing patients in a hospital who are either elderly, or on medication...

Compliance Agreement ( and Errors and Omissions )
This document is similar to the Errors and Omissions document. Please see, "Errors and Omissions". The compliance agreement has the borrower agree to cooperate should there be any changes to any...

Condominium
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.

Condominium Conversion
Changing the ownership of an existing building that is usually a rental project to the condominium form of ownership. In the case of a condominium conversion, a single property would be divided into a property...

Conforming Loan
The current conforming loan limit is $417,000 and below. Conforming loan limits change annually.

Construction Loan
A short-term interim loan for financing the cost of construction. The lender advances funds to the builder at periodic intervals as the work progresses. A construction loan would typically be paid off once...

Consumer Reporting Agency (or Bureau)
An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency gets data for these reports from a credit repository as well as from other sources.

Contingency
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory...

Contract
An oral or written agreement to do or not to do a certain thing. Notaries would most likely be involved in written contracts although an Affidavit would require an oral oath as well.

Conventional Loan
A mortgage not insured by FHA or guaranteed by the VA or Farmers Home Administration (FMHA) would be considered a conventional loan. There are various types of conventional loans. There are fixed rate...

Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions. The conversion of a convertible ARM would be possible at certain specified points in the life of...

Convertibility Clause
A clause in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified time frames after the loan originates. With a convertibility clause in a...

Cooperative (co-op)
A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment...

Correction Agreement Limited Power of Attorney
This document authorizes the lender to make corrections to clerical errors. However, it does not grant authority to anyone to change the terms of the loan. The Correction Agreement Limited Power of Attorney...

County Clerk
The county clerk files recorded documents such as deeds. They also file the notary's oath of office and surety bond. The office withint the county clerk's building that keeps the recorded documents is called the...

Covenant
A clause in a mortgage that obligates or restricts the borrower. If the covenant is violated, it can result in foreclosure.

Credible Witness:
A believable witness worthy of confidence who can identify a signer who's signature is being notarized. Some states require one credible witness while others require two if the signer does not have proper...

Credit
An agreement where a borrower receives something of value in exchange for a promise to repay the lender at a later date.

Credit History
A record of an individual's open and fully repaid debts. A credit history can be used to determine whether a potential borrower has a history of repaying debts in a timely manner. It also informs a lender as to the...

Credit Report
A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's worthiness of receiving credit.

Credit Repository
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

Death Certificates
Notaries in most states are not permitted to notarize certified copies of Death Certificates. However, it is common to use a certificate called a certified copy by document custodian which requires the signer to...

Debt
An amount of money owed to another party. A debtor is the party who owes money to another party. A creditor is the party who is owed money. If a party gets a mortgage, the money owed in their mortgage is...

Debt-To-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his/her net effective income in the case of FHA/VA loans, or gross monthly...

Deed
The legal document conveying title to a property is a deed. This is sometimes refered to as a title deed.

Deed of Trust
The Deed of Trust is the security instrument in a loan. It gives the lender a claim against the borrower(s)' home if they default on payment. This document is often initialed on all pages. The Deed of Trust is used...

Default
Failure to meet legal obligations in a contract, specifically, the failure to make payments on a mortgage.

Delinquency
Failure to make mortgage payments in a timely manner.

Deposit
1. A sum of money given to bind the sale of real estate. 2. A sum of money given to ensure payment or an advance of funds in the processing of a loan.

Depreciation
A decline in the value of property; the opposite of appreciation.

Discount points
See "Points". Points are prepaid interest assessed at closing by the lender. Each point is equal to one percent of the loan amount, e.g. three points on a $100,000 mortgage would cost $3,000. In many cases, a...

Document
A notary public's job includes notarizing signatures on documents. There could be endless variations in the types of documents that a notary could notarize. It is not the notary's responsibility to understand the...

Document Date
It is common for a document to have a document date written within the body of the text. The date of the signing is often different from the document date. If there is a document date, it is good to record that...

Down Payment
The portion of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage. A down payment of at least 20% is necessary to avoid paying PMI private mortgage insurance...

Duress
Constraint by threat, or coercion.

Easement
A right of way giving persons other than the owner access to or over a property. Easment could be the right for an entity to use land owned by another entity.

ECOA Anti-discrimination Notice
This document states that discrimination on the basis of race, color, marital status, or age is prohibited.

Effective Age
An estimate made by an appraiser of what actual age a property's condition would make it similar to. For example, a new property that was damaged and had many broken components might have a larger...

Effective Gross Income
Normal annual income including overtime that is regular or guaranteed. The income counted is from all sources combined. Salary is generally the principal source, but other income may qualify if it is significant...

Eighty-ten-ten loan ( 80-10-10 Loan )
See "Combination loan". An 80-10-10 loan is also refered to as a picky back loan. An 80-10-10 loan allows a borrower to pay 10% down, borrow 80% of the purchase price on one loan, and get a second...

Electronic funds transfer (EFT)
EFT allows account holders to transfer funds from an account electronically. This method of transfer is highly secure, efficient, fast, and easy to transact. One advantage of electronic funds transfer is that...

Embosser
A pliers-like device, that when squeezed together with paper between the jaws, makes a raised impression and indentation on paper. An embosser is used as a protection device and is not an official notary seal...

Encumbrance
Anything that affects, undermines, or limits the value of a title to a property, such as mortgages, leases, easements, tax liens, or restrictions. Encumberances are usually recorded with the county recorder or...

Endorser
A person who signs ownership interest over to another party.

e-notary / e-notarization
It is a current trend for notaries to learn to do e-notarizations. Although there is no such thing as an e-notary, there are notaries who have the capcity to do electronic notarizations ( e-notarizations ). An e-notarization...

Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from...

Errors and Omissions
The Errors and Omissions document requires the borrower to comply with the lender to make corrections should any clerical errors need to be fixed in the loan documents. This document is similar to the...

Escrow
An Escrow company is a neutral third party who carries out the instructions of both the buyer and seller to handle all the paperwork of settlement or "closing". Escrow may also refer to an account held by the...

Escrow account
An escrow account is an account in which a mortgage servicer holds the borrower's escrow payments prior to paying property expenses. An escrow account could also be considered to be a trust account held in...

Escrow Analysis
The periodic examination of escrow accounts to determine if current monthly deposits will be able to keep up with taxes, insurance, and other bills when due. Escrow analysis can also be described as a report...

Escrow Collections
Funds collected by the servicer and set aside in an escrow account to pay the borrower's property taxes, mortgage insurance, and hazard insurance. The borrower must make deposits into the escrow collections in...

Escrow Disbursements
Escrow disbursements are payments out of the escrow account to cover real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due. All payments for escrow...

Escrow Payment
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Escrow payments are...

Estate
The ownership interest of an individual in real property. The total of all the real property and personal property owned by an individual at time of death.

Eviction
The lawful expulsion of an occupant from a property.

Examination of Title
The report on the title of a property from the public records or an abstract of the title. Research of the title of a particular property. An examination of title is less thorough than a title search. It usually concentrates...

Execute
To sign. In the notary context, it would mean to sign a document or "instrument". A Notary Public could execute an acknowledgment which is a formal way of saying that they could take an acknowledgment or...

Executing Witness
Also known as a subscribing witness. Someone who swears that another particular person signed a document. An executing witness could be use in a "Proof of Execution" notary act. The executing witness would...

Expiration
A notary's commission would have an expiration date. The length for a notary's term of office varies from state to state but is most commonly four years. The commission expiration date is usually part of the...

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer and credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Family Rider
The Family Rider transfers the owner's right to collect rents to the lender. One common clause in the family rider is that the borrower would not make any changes to the use of the property or to its zoning...

Fair Market Value
1. The highest price that a buyer would pay, and the lowest a seller would accept. 2. A value similar to what comparable properties in comparable areas would have.

Fannie Mae
See "Federal National Mortgage Association".

FDIC insured
Federal deposit insurance protects the first $100,000 of deposits that are payable in the United States.

Federal Housing Administration (FHA)
A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loan made by private lenders. FHA also sets standards for underwriting mortgages.

Federal National Mortgage Association (FNMA)
Also known as "Fannie Mae". A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by the VA. This institution...

FHA Loan
A loan insured by the Federal Housing Administration available to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderate-priced homes in...

FHA mortgage
A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage. A loan insured by the Federal Housing Administration available to all qualified home purchasers...

Felony
A crime more serious than a misdemeanor and punishable by a more stringent sentence. Most states will not allow an individual with a Felony, or crime involving dishonesty or moral turpitude from becoming a...

Finder's Fee
In a mortgage context, a finder's fee is a fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower. A finders fee would generally be classified as compensation given to...

First Mortgage
A mortgage that is the primary lien against a property. Please read about subordination agreements to learn which mortgage is primary or secondary against a property. Please do not confuse the concept of...

Float Down Option
One variation of a float down option is an option to choose a lower rate within 30 days before the closing of your loan and "float down" to a lower rate than the previously locked-in rate. This allows you to pick...

Flood Insurance
Insurance that compensates for physical property damage resulting from flooding. It is a requirement for properties located in federally designated flood areas. Even a few inches of water can bring thousands of...

Flood Zone Notification
This document called a flood zone notification would only be in a loan package if the lender determined that the property involved is located within a flood plain. If the property was in a flood plain, then the flood zone...

Foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds...

Forgery
A false signature, written document or other creation made to imitate the true signature, document, or creation, with the intent to defraud. Notaries would be wise to employ the use of thumb printers when...

Form 4506 Request for Copy or Transfer of Tax Form
This document authorizes the lender to obtain a copy of the borrower's tax return if a loan is chosen to be audited. It also ensures that the borrowers didn't commit fraud in their application regarding their...

Form 8821 Tax Information Authorization
This document authorizes the lender to contact the Internal Revenue Service for many years of tax reports on the behalf of the borrower.

GINNIE MAE
See "Government National Mortgage Association."
Good Faith Estimate

Good Faith Estimate
This document estimates what the closing costs will be on a loan but by no means is a final accounting. The HUD-1 Settlement Statement is a final version of what the costs are in a loan. The good faith...

Government National Mortgage Association (GNMA)
Also known as "Ginnie Mae", provides sources of funds for residential mortgages, and is insured or guaranteed by FHA or VA.

Gross Monthly Income
In the context of loan signing, the total amount the borrower earns per month, before any expenses are deducted.

Hague Convention Nations
There are various Hague Convention Nations who participate in an agreement regarding authentification of notarized documents. If a notarized document is accompanied by an apostille, it can be recognized...

Hardship Letter - 30 Day Notice
In this document, the borrower agrees that they are aware that their first mortgage payment may be due within thirty days of the signing and that it doesn't create a hardship for them. There are many...

Hazard Insurance
A form of insurance that protects the insured from specified losses, such as fire, windstorm, and other hazards.

Hazard Insurance Authorization & Requirements
In this document, the lender requires the borrower to have a hazard insurance policy against losses due to property damage caused by fire, storms, or other types of dangerous events.

Home Equity Line of Credit
A HELOC is a credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. There is...

Home Equity Loan
A loan secured by a second deed of trust on a house, typically used as a home improvement loan. A home equity loan can sometimes be the first or third lien on a house in some circumstances. You need to have a...

HUD
The U.S. Department of Housing and Urban Development.

HUD-1
Also known as the HUD and the Settlement Statement. Please also see, "Settlement Statement" The HUD-1 document is prepared by the closing agent and discloses all fees and costs involved in the loan and is...

Identification of signer
State laws differ on what constitutes satisfactory identification of a signer. Generally a government issued identification such as a drivers license, identity card, or passport will suffice. Its generally beneficial if the...

Impound
The portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. It is also common to...

Immigration
Please check your state notary laws to see which if any immigration documents you are allowed to notarize. Notaries must not give advice on immigration.

Index
A published interest rate to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. A few commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds...

Initial Escrow Account Disclosure Statement
The initial escrow account disclosure statement discusses escrow payments over one year. It shows how taxes and insurance will be calculated during that one year time period. A potential home buyer should...

Instrument
A technical term for a document.

Interest-only Loan Option
Loan payments have two components, principal and interest. An interest-only loan has no principal payments required for a specified period of time. The interest only loan option minimizes your monthly...

Jumbo Loan
A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they...

Journal of Notarial Acts
Notarial journal prescribed by law in many states to record notarial acts. Some important features of the Notary journal is that the journal should be bound and sequential to deter adding additional entries after the...

Jurat
Latin, "to swear." A Jurat certificate is signed and sealed by a notary which is affixed below the sworn or affirmed statement and signature of the affiant. Laws for Jurats can differ from state to state. Some states...

Jurisdiction
A notary's jurisdiction is generally their state of commission. A notary is almost never allowed to notarize outside of the state where their commission is based. Some notaries have dual commissions, meaning...

Lien
An encumbrance against property for money due which could be either voluntary or involuntary.

Lender
The bank, mortgage company, or mortgage broker offering the loan.

Limited Power of Attorney ( LPOA )
Please refer to the "Correction Agreement Limited Power of Attorney."

Loan Application
Please see, "Universal Residential Loan Application."

Loan Document Signer
See "Signing Agent"
Loan to Value Ratio

Lock Period
An amount of time that a lender will guarantee a loan's interest rate. Once you've locked in the interest rate on a loan, the lender will guarantee that rate for a certain period of time which typically is for 30, 45 or 60...

Lock-in
A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in usually specifies the number of points to be paid at closing as well.

L.S. (locus sigilli)
Latin, "The location where the seal is placed." Used generally to indicate the place for the notary's seal. Every notary certificate has an L.S. area for the notary seal.

Margin
The amount a lender adds to the index on an adjustable mortgage to establish the adjusted interest rate.

Marriage Certificates
Notaries in most states are not permitted to notarize certified copies of marriage certificates. However, it is possible for the notary to have the signer sign a certified copy by document custodian form which certifies...

Maturity Date
A pre-set date informing account owners when they can withdraw principal funds without incurring a penalty. (Please note that you may withdraw any generated interest before reaching an account's maturity...

Military Officer Notarizations
U.S. Military officers on active duty may notarize for any Military personnel anywhere in the world. There doesn't need to be a venue, or serial number, or branch of service or permanent mailing address if those...

Misconduct
Behavior not conforming to prevailing standards or laws. Notary misconduct can lead to suspension, revocation, or termination of their notary commission.

Misdemeanor
An offense of lesser gravity than a felony for which punishment may be a fine or imprisonment. In some cases, a misdemeanor can disqualify an individual from becoming a notary public, especially if the crime...

Mobile Mobile Notary
A mobile notary residing in Mobile, AL. See "Mobile Notary"

Mobile Notary
A mobile notary is a notary who is accustomed and willing to travel to the signer's location. Mobile notaries often visit offices, houses, hospitals, courts, and jails. Mobile notaries usually charge a travel fee which is...

Mortgage
This document is used to secure the payment of a notary. Many states use a document called a Deed of Trust in its place.

Mortgage Disability Insurance
A disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time. State Farm has a mortgage disability insurance...

Mortgage Insurance
Money paid to insure the mortgage when the down payment is less than 20 percent. Please refer to the 80-10-10 mortgage to learn about options where you can borrower more than 80% of the value of the...

Mortgagee
The person, company, or entity who receives the mortgage as a pledge for repayment of the loan. The mortgage lender.

Mortgagor
The mortgage borrower who gives the mortgage as a pledge to repay.

Negative Amortization
Negative Amortization, or "deferred interest," occurs when the mortgage payment is less than a loan's accruing interest. This causes a loan's balance to grow instead of reduce or "amortize." There are cases...

Name Change
If a notary changes their name, they should check to see what their state's notary laws regarding name changes of notaries. Sometimes, the notary can continue using their existing commission provided that...

Negligence
Failure to use sufficient care that would be expected of any other person in a similar situation.

Net Effective Income
The borrower's gross income after federal income tax has been deducted. Net effective income is one of the statistics that a lender would need to use to determine if a potential borrower qualifies for a particular...

No Closing Costs
Some loans have no up front closing costs. In such a case, the closing costs are integrated into the loan amount. Having a loan with no closing costs was very popular in 2005 and 2006 when borrowers were over...

Non-conforming Loan
Also called a jumbo loan. A conventional home mortgage that is not eligible for sale and delivery to either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because of various reasons, including loan amount, loan...

Notarial act
A notary act is any act that a notary public of this state is authorized to perform, and includes taking an acknowledgment, administering an oath or affirmation, taking a verification upon oath or affirmation...

Notarization
The act of having a notary act performed. The act of having a signature notarized.

Notarize
The process of notarizing a signature on a document. Please use 123notary.com as your source for locating a mobile notary who can help you notarize your documents.

Notarized
To get a document notarized you need to appear before a notary public. To get an acknowledged signature or jurat notarized, you will need proper identification such as a government issued identification like a...

Notarized Documents
Please contact one of the mobile notaries on 123notary.com and they will be able to notarize your document. Please do not ask them to draft a document as they are not attorneys and can not offer legal advice...

Notarized Letters
If you have a letter and you sign it and appear before a notary public with appropriate identification, then the notary can notarize your signature on the letter, and you would have a notarized letter...

Notarizing
The act of notarizing a notary act or performing a notary act. The act of completing the notary paperwork to notarize a signature.

Notary Job
A job involving a notary public could be called a notary job. Notary jobs could include the notarizing of a single signature, or could involve the completion and supervision of a lengthy loan signing...

Notary Public
An official authorized by law and appointed by a state government to serve the public as a disinterested witness, to take acknowledgments, administer oaths and affirmations, and to perform such other acts as are...

Notary Signing Agent
Before the 1990's, Notary Signing Agents were virtually unknown. Borrowers were expected to travel to the office of a lender, escrow agent or title firm to complete a loan. However, during the past decade...

Note
The Note is one of the most important loan documents that states the terms of the loan. The Note also discloses whether or not there will be a pre-payment penalty and could have the pre-payment penalty explained...

Notice of Assignment, Sale, or Transfer of Servicing Rights
This document authorizes the lender to transfer the servicing rights to another party. The servicer would be the one to collect monthly payments and handle customer service. It also authorizes the lender to sell the...

Notice of Right to Cancel
See, "Right to Cancel" This document applies only to principal residences only, and not investment or rental properties. A loan document that gives the borrower the right to Cancel their loan within three days...

Notice to Applicant
The notice to applicant states that they have the right to receive a copy of their property's appraisal.

Notice to Borrower - Impound/Escrow Account
A document that includes the borrower's escrow account information. Discusses what the borrower's taxes and insurance will cost in addition to principal and interest.

Oath
A solemn pledge or promise containing reference to a Supreme Being. A person who intentionally makes false statements under oath is punishable for perjury. A notary public may administer oaths as a notary...

Oath of Office
Notaries must take an oath of office before receiving their notary commission. The paperwork for their oath must be filed with the county clerk where their commission is based.

Occupancy Affidavit
The Occupancy Affidavit is for the borrower to swear that they will be living in the property they are borrowing for rather than leasing the property to a third party. It is common for individuals who are investing in a...

Occupancy Affidavit and Financial Status
This is similar to the Occupancy Affidavit in that it has the borrower state that they will be residing in the property as their primary address as opposed to renting it out to another party. The occupancy affidavit and...

Official Notary Seal
A rubber stamp that all notaries must have that conforms to the laws and rules. An Official Notary Seal generally includes the Notary's name, county where commissioned, state, the words, "Notary Public", the notary's...

Owner's Occupancy Agreement
The owner's occupancy agreement is similar to an Occupancy Affidavit. The Occupancy Affidavit is for the borrower to swear that they will be living in the property they are borrowing for rather than leasing the...

Origination Fee
The fee charged by the lender to prepare loan documents, make credit checks, inspect a property, and often appraise a property; usually computed as a percentage of the face value of the loan.

Owner Financing
A property purchase transaction in which the property seller provides all or part of the financing. Owner financing could have less restrictive or easier terms than bank financing.

Payment Letter to Borrowers
The payment letter to borrowers discloses the borrower(s)' actual monthly payment of principal and interest plus any additional payments determined by escrow. Reserve for taxes is one of the categories in the...

Periodic Cap
The maximum rate increase for a specific period for a specific loan in an adjustable rate mortgage (ARM) only. If your current rate is 5% and your periodic cap is 1%, then during the next adjustment, your rate can...

Perjury
Making a false statement under oath. Generally punishable by fine and/or imprisonment if made under oath to a public official.

Personally Known
Familiarity with an individual resulting from interactions with that individual over a period of time sufficient to eliminate every reasonable doubt that the individual has the identity claimed. an acquaintance, derived...

Photograph
A notary can not notarize a photograph. A notary can only notarize signatures. A document could be written about a photograph and the signature on the document could be notarized, and the photograph could be...

PITI
Principal, interest, taxes and insurance. PITI is also referred to as a monthly housing expense.

Points
Points are prepaid interest assessed at closing by the lender. Each point is equal to one percent of the loan amount, e.g. three points on a $100,000 mortgage would cost $3,000.

Power of Attorney
A legal instrument authorizing one to act as another's agent or attorney. The person who authorizes another to be their agent is the grantor, while the person receiving authorization is the attorney in fact...

Prepaids
Particular expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, rent, etc.

Prepayment Penalty
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule. Many borrowers elect to not have a prepayment penalty if they intend to pay...

Principal
Principal refers to the total amount of money originally deposited into a Savings or CD account. However, when taking out a loan, it refers to the amount of debt, not including interest.

Private Mortgage Insurance (PMI)
Nongovernment provided insurance that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages greater than...

Privacy Notice
The Privacy Notice allows for disclosure of information about your credit and employment information based on the information the lender has. The disclosure can not occur without a borrower signature...

Proof of Execution
This notary act takes place when a subscribing witness or executing witness appears before a notary and swears that another particular person signed a document. This is the only notary act...

Protest
A protest is an antiquated notary act, but is still done on occasion. A Notary could be asked to protest a non-payment.

PUD
Planned Unit Development. It is the comprehensive development plan for a large area. Usually indicating where roads, schools, recreational, office, commercial or industrial and residential areas will be. It could...

Quit Claim Deed
A legal document which transfers a property to the buyer or owner, whatever interests in the property are held by the maker of the deed. A Quit Claim Deed does not guarantee that those interests are valid. By...

Recording Fee
Money paid to the lender for the recording of a home sale with local authorities, thereby making it part of the public records. Recording fees are generally paid to the county recorder.

Refinancing
The process of paying off one loan with the proceeds from a new loan using the same property as security.

Rescind
In the context of the notary profession, the verb "To rescind" would be used when a borrower cancels their loan by rescinding. The document that authorizes the borrower to rescind is the notice of right to cancel...

Rescission
The act of a borrower canceling a loan. Please refer to the document called, "The Right to Cancel" for more information. Not all loans have a right to rescission. Commercial loans might not have a right to...

Resignation
A written statement that one is resigning a position or office.

RESPA Servicing Disclosure
RESPA stands for Real Estate Settlement Procedures Act and is a consumer protection statute. RESPA requires that the borrowers receive periodical disclosures elaborating on the costs involved in the settlement...

Reverse Mortgage
A type of mortgage typically used by equity-rich seniors, where the lender makes regular tax-free monthly payments to the borrower either for life, or until the borrower sells the property. To qualify for a reverse...

Revoke
To cancel or rescind.

Rider
Riders (or addenda) are special attachments (separate sheets) that become part of the contract in certain situations. There could be multi-state riders, prepayment riders, adjustable rate riders, convertible...

The Right to Cancel
A loan document that gives the borrower the right to Cancel their loan within three days, not including Sundays or Federal holidays. The borrower would be able to fax a request or send a request in writing to cancel their...

Sanctions
The penalty for noncompliance specified in a law or decree.

Satisfactory Evidence
Sufficient means of identifying a signer which meets criteria set forth by law. Satisfactory evidence would include credible witnesses. A credible witness is a person who knows the signer who is willing to swear under...

Seal
In the case of the signer, the seal is their signature. In the case of the notary, the seal is their stamp, but legally could still mean their signature. A Notary seal is the the notary's official stamp or embosser. Most...

Section 32 Mortgages FTC Facts
This document discusses facts regarding how creditors are required to provide full disclosure of the terms of a loan including the annual percentage rate.

Seller carry back
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage. The interest rate would have to be agreed upon by both parties. Seller carry backs were popular...

Settlement/Settlement Costs
Refer to, "Closing costs"...

Settlement Statement ( HUD-1 )
This document is prepared by the closing agent and discloses all fees and costs involved in the loan and is required by Federal Law. It includes the loan amount, loan fees, charges, proration of real estate taxes...

S.S. (scilicet)
Latin, "to wit, namely." Printed near the venue of a certificate or acknowledgment. Not to be confused with the Yiddish phonetic equivalent meaning, "Eat, eat".

Signing and Initialing
There are different formats for this document. Many of the pages have one-centimeter initial lines in the bottom right corner. Keep your eyes open, as the different formats of this document have different...

Signature by Mark
Elderly or disabled signers sometimes do a signature by mark is they are unable to complete their normal signature. Signature by mark usually constitutes signing with an "X". There is a procedure involved using...

Signing Agent
Before the 1990's, Signing Agents were virtually unknown. Borrowers were expected to travel to the office of a lender, escrow agent or title firm to complete a loan. However, during the past decade, increasing...

Signature Affidavit
The signature affidavit is a document where a borrower can state all of their name variations. This can be very helpful should the borrower sign the other documents with a variation their signature, such as adding...

Signing Service or Closing Service Companies
A company who subcontracts signing appointments to individual Notaries who engage in Loan Document Signings for signing of loan documents and notarization. The sole purpose of this type of company is to act...

Subordination
If you are refinancing your first mortgage and have an existing second or home equity line, one could "subordinate" the second mortgage: request that your second mortgage holder go back into the second lien...

Subordination Agreement
If you are refinancing your first mortgage and have an existing second or home equity line, one could "subordinate" the second mortgage: request that your second mortgage holder go back into the second lien...

Subscribe
To sign, to write one's signature. The word subscribe is part of many states' Jurat wording where the phrase or similar phrase, "Subscribed and sworn to before me this ____ day of ______ ".

Subscribing witness
A witness who witnesses a person signing by "X" who according to certain state's laws is required to assist in the signing by signing the signer's first or last name in the journal as well as the document while a second...

Surety Bond
See "Bond". Many states require notaries to carry a surety bond to protect others from any misconduct or mistake. Should the Notary be liable for monetary sums, the bonding company would be liable to pay...

Suspend
To cause to stop for a period; interrupt. If a notary breaks the law, or engages in professional misconduct, their notary commission could be suspended.

Swear
To make a solemn promise; to vow, usually before God. Jurat wording includes the phrase, "Subscribed and sworn to before me ..." Notaries routinely have signers and witnesses swear under oath. Credible...

Tenants in common
An undivided interest in property taken by two or more persons. The interest need not be equal. Upon death of one or more persons, there is no right of survivorship.

Term
The length of time your money must remain in a CD without incurring an early withdrawal penalty. This term also refers to the period of time that covers the life of a loan.

Testimonium clause
At the end of many documents and certificates that follows the form "witness my hand and seal" or some variation thereof. Testimonium clauses are especially common in deeds or conveyance documents...

Thumbprint
It is required in some states that journal entrees concerning notarizations of deeds affecting real property or Powers of Attorney have a thumbprint. Its generally prudent to take thumbprints for all signatures...

Title
The evidence one has of right to possession of land.

Title Insurance
A policy, usually issued by a title insurance company, which insures a home buyer against errors, defects, liens, or encumbrances in the title search. The cost of the policy is usually based on the value of the property.

Title Search
Research into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear ownership.

Total Debt Ratio
Monthly debt and housing payments divided by gross monthly income. Also known as Obligations-to-Income Ratio or Back-End Ratio. The ratio of debt an entity has relative to their assets. The debt ratio can help...

Truth in Lending
A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly after they apply for a loan. The Truth in Lending loan document is the document that is the first place to look for the APR.

Uniform Residential Loan Application
A document which is often many pages long, commonly referred to as "The 1003". It is used to apply for a mortgage and to provide information regarding a prospective mortgagor and the proposed security.

Variable Rate
An interest rate that could change once an account is opened.

Venue
1. The place where the act is performed. 2. The place on the certificate that gives the state and county where the notarization was performed. 3. The place where a trial is held.

Verification
A confirmation of the truth of a theory or fact.

Veterans Administration (VA)
A government agency guaranteeing mortgage loans with no down payment to qualified veterans.

W-9 Request for Taxpayer ID Number & Certification
This document is a tax form used to verify and state a person's social security number. In a loan package, the borrower must state their social security number and sign this form.

Waiver of Fees
A statement which waives or gives up the right to charge for notarial services.

White Out
A form of a liquid white ink use to cover up errors in paper work. Never use white out in notary or loan signing work.

Wills
Notaries in most states should not notarize a will unless given specific instructions by an attorney and/or given notarial wording included in the document which could constitute an instruction to notarize in some states.

Witness
A person who watches an action take place. In the notary profession there can be witnesses who watch someone sign a document. There can be credible witnesses who identify a signer.

X, Signing by "X"
See, "Signature by Mark."

Yield
See, "Annual Percentage Yield (APY)."

Zero Closing Costs
See, "No Closing Costs."