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| | Abstract (of Title) - A summary of the public records relating to the title to a particular piece of land. If there are any title defects they must be cleared before a buyer can purchase clear, marketable, and insurable title. |
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| | Acceleration Clause - Allows the lender to speed up the rate at which your loan comes due or even to demand immediate payment of the entire balance of the loan should you default on you loan. |
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| | Acceptance - An offerees 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 in which the interest rate is adjusted periodically based on an index. Also known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage. |
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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 Interval - On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, usually one, three or five years. |
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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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| | ADR - ADR is a real estate term. ADR is the Average Daily Rate received for rooms rented. To calculate this. divide the total income by the number of rooms rented. Example: Room income for the year was $150,000. The 6 room inn averaged 50% occupancy for the year or 3 rooms X 365 days per year or 1095 rented rooms divided into $150,000 equals an ADR of $136.98. |
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| | Affiliate - An entity related to a Seller that is subject to common operating control and that is operated as part of the same system or enterprise. The Seller typically owns less than a majority of the voting stock or the Seller and the entity are subsidiaries of a third party. |
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| | Affordable Gold 5 - Mortgage with less than or equal to 95 percent LTV, when at least 5 percent of the downpayment comes from the borrower's personal cash. |
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| | Affordable Gold 97 - Mortgage with greater than 95 percent loan-to-value (LTV) ratio but less than or equal to 97 percent LTV, when at least 3 percent of the downpayment comes from the borrower's personal cash. |
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| | Affordable Product Type - Choice of loan determined under the Affordable Gold program. Indicates whether to submit the loan under the Affordable Gold program and, if so, which type of program. |
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| | Affordable Seconds - Subsidized secondary financing or other financial assistance provided under an established, documented secondary financing or financial assistance program that has formal procedures in place to provide applicant qualification, loan processing, and loan program administration on an ongoing basis. |
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| | Agreement of Sale - Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under specific terms spelled out in writing and signed by both parties. |
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| | Amenity - A feature of real property that enhances its attractiveness and increases the occupants or users satisfaction although the feature is not essential to the propertys 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 reduction of a debt by periodic payments of interest and principal that are large enough to pay off a loan at maturity. The loan is repaid through regular, monthly payments of principal and interest paid for a predetermined amount of time. |
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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. |
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| | Amortize - Reduce a debt by regular payments of both principal and interest. |
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| | Annual Percentage Rate (APR) - The annual cost of a loan to a borrower. Like an interest rate, the APR is expressed as a percentage of the loan amount. Unlike an interest rate, however, it includes other charges or fees to reflect the total cost of the loan. The Federal Truth in Lending Act requires that every consumer loan agreement disclose the APR in large, bold print. Since all lenders must follow the same rules to ensure the accuracy of the APR, borrowers can use the APR as a good basis for comparing the cost of loans. |
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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. |
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| | Application Fee - The fee charged by the lender to the borrower for applying for a loan. |
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| | Appraisal - A written analysis of the estimated value of a property, as prepared by a qualified appraiser. A fee is typically charged for a real estate appraisal because a home appraisal is time-consuming. An appraisal of an auto is usually not necessary because auto dealers, sellers and buyers all have quick access to the market value of autos. |
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| | Appraisal Fee - The charge for estimating the value of property. |
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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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| | Appraiser network - Group of licensed/certified individuals or entities contracted to perform property value assessments. |
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| | Appreciation - An increase in the value of a house due to changes in market conditions or other causes. |
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| | ARM 1 year adjustable - A loan with a fixed rate for the first 1 year that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 1 year, the monthly payment may also change. |
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| | ARM 10 year adjustable - A loan with a fixed rate for the first 10 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 10 years, the monthly payment may also change. |
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| | ARM 2 year adjustable - A loan with a fixed rate for the first 2 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 2 years, the monthly payment may also change. |
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| | ARM 3 year adjustable - A loan with a fixed rate for the first 3 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 3 years, the monthly payment may also change. |
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| | ARM 5 year adjustable - A loan with a fixed rate for the first 5 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 5 years, the monthly payment may also change. |
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| | ARM 7 year adjustable - A loan with a fixed rate for the first 7 years that has a rate that changes once each year for the remaining life of the loan. Because the interest rate can change after the first 7 years, the monthly payment may also change. |
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| | Assessed Value - The valuation placed upon 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 Report - Report that appraisers use to record property values, marketability analyses and any pertinent comments regarding the subject property. Assessment reports are classified as appraisal reports or inspection reports. |
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| | Assessment Upgrade - Approved recommendation from an appraiser that you must use a more comprehensive type of assessment. An example of an upgrade recommendation includes any adverse/atypical findings or other atypical property or neighborhood condition observed by the appraiser. You must also upgrade an assessment when its value does not support the loan transaction; the appraiser is unable to view the subject property from the public street; the assessment is "subject to" completion; or repair or property rights are leasehold. |
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| | Assessor - A public official who establishes the value of a property for taxation purposes. |
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| | Asset - Anything that has monetary or exchange value that is owned by an individual, business or institution. Assets include real estate property, personal property, vehicles and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on). A lender is very interested in the amount and value of any assets you may have because assets can be used as collateral against a loan. Along with other factors such a a borrower's credit rating, assets are also used to help determine the amount of the loan. |
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| | Assignment - The transfer of a mortgage from one person to another. |
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| | Assumable Loan - These loans may be passed on from a seller of a home to the buyer. The buyer "assumes" all outstanding payments. |
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| | Assumable Mortgage - An assumable mortgage is a mortgage that allows you to take over a mortgage on a home you are buying or allows a buyer to take over your mortgage if you are selling your house. The advantage of this is that you assume a mortgage that has a lower interest rate than current rates, and you avoid high closing costs. |
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| | 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 debt. |
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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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| | Assumption of Mortgage - An obligation undertaken by the purchaser of property to be personally liable for payment of an existing mortgage. In an assumption, the purchaser is substituted for the original mortgagor in the mortgage instrument and the original mortgagor is to be released from further liability in the assumption, the mortgagee's consent is usually required. |
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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. The original mortgagor should always obtain a written release from further liability if he desires to be fully released under the assumption. Failure to obtain such a release renders the original mortgagor liable if the person assuming the mortgage fails to make the monthly payments. An "Assumption of Mortgage" is often confused with "purchasing subject to a mortgage." When one purchases subject to a mortgage, the purchaser agrees to make the monthly mortgage payments on an existing mortgage, but the original mortgagor remains personally liable if the purchaser fails to make the monthly payments. Since the original mortgagor remains liable in the event of default, the mortgagee's consent is not required to a sale subject to a mortgage. Both "Assumption of Mortgage" and "Purchasing Subject to a Mortgage" are used to finance the sale of property. They may also be used when a mortgagor is in financial difficulty and desires to sell the property to avoid foreclosure. |
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| | Automated Underwriting - Automated underwriting is used to offer instant decisioning regarding your loan request. Automated underwriting is similar to instant offer service. You are usually required to provide additional information to the lender to close your loan. |
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