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Acceleration Clause |
A provision in a mortgage that gives the lender the right to demand payment of the
entire principal balance if a monthly payment is missed. |
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Acceptance |
An offeree’s consent to enter into a contract and be bound by the terms of the offer. |
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Additional Principal Payment |
A payment by a borrower of more than the scheduled principal amount due in order
to reduce the remaining balance on the loan. |
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Adjustable-Rate Mortgage (ARM) |
A mortgage that permits the lender to adjust the mortgage's interest rate periodically
on the basis of changes in a specified index. Interest rates may move up or down,
as market conditions change.
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Adjusted Basis |
The original cost of a property plus the value of any capital expenditures for improvements
to the property minus any depreciation taken.
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Adjustment Date |
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).
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Adjustment Period |
The period that elapses between the adjustment dates for an adjustable-rate mortgage
(ARM).
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Administrator |
A person appointed by a probate court to administer the estate of a person who died
intestate.
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Affordability Analysis |
A detailed analysis of your ability to afford the purchase of a home. An affordability
analysis takes into consideration your income, liabilities, and available funds,
along with the type of mortgage you plan to use, the area where you want to purchase
a home, and the closing costs that you might expect to pay.
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Amenity |
A feature of real property that enhances its attractiveness and increases the occupant’s
or user’s satisfaction although the feature is not essential to the property’s use.
Natural amenities include a pleasant or desirable location near water, scenic views
of the surrounding area, etc. Human-made amenities include swimming pools, tennis
courts, community buildings, and other recreational facilities.
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Amortization |
The gradual repayment of a mortgage loan by installments.
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Amortization
Schedule |
A timetable for payment of a mortgage loan. An amortization schedule shows the amount
of each payment applied to interest and principal and shows the remaining balance
after each payment is made.
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Amortization Term |
The amount of time required to amortize the 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.
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Amortize |
To repay a mortgage with regular payments that cover both principal and interest.
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Annual Mortgagor Statement |
A report sent to the mortgagor (the borrower) each year. The report shows how much
was paid in taxes and interest during the year, as well as the remaining mortgage
loan balance at the end of the year.
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Annual Percentage Rate (APR) |
The cost of a mortgage stated as a yearly rate; includes such items as interest,
mortgage insurance, and loan origination fee (points).
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Annuity |
An amount paid yearly or at other regular intervals, often on a guaranteed dollar
basis.
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Application |
A form used to apply for a mortgage loan and to record pertinent information concerning
a prospective mortgagor and the proposed security. Lenders use the information on
the loan application to evaluate whether or not they can give the loan, and if so,
the amount of money they can lend.
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Appraisal |
A written analysis of the estimated value of a property prepared by a qualified
appraiser. Contrast with home inspection. |
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Appraised Value |
An opinion of a property's fair market value, based on an appraiser's knowledge,
experience, and analysis of the property.
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Appraiser |
A person qualified by education, training, and experience to estimate the value
of real property and personal property.
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Appreciation |
An increase in the value of a property due to changes in market conditions or other
causes. The opposite of depreciation. |
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Assessed Value |
The valuation placed on property by a public tax assessor for purposes of taxation.
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Assessment |
The process of placing a value on property for the strict purpose of taxation. May
also refer to a levy against property for a special purpose, such as a sewer assessment.
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Assessment Rolls |
The public record of taxable property.
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Assessor |
A public official who establishes the value of a property for taxation purposes.
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Asset |
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).
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Assignment |
The transfer of a mortgage from one person to another.
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Assumable Mortgage |
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.
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Assumption |
The transfer of the seller’s existing mortgage to the buyer. See assumable mortgage.
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Assumption Clause |
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 or transfer of the property.
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Assumption Fee |
The fee paid to a lender (usually by the purchaser of real property) resulting from
the assumption of an existing mortgage.
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Attorney-In-Fact |
One who holds a power of attorney from another to execute documents on behalf of
the grantor of the power.
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