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.
Acceptance
An offeree's consent to enter into a
contract and be bound by the terms of the offer.
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.
A mortgage that permits the
lender to adjust its interest rate periodically on the basis of changes in
a specified index.
Adjusted Basis
The original cost of a property plus the
value of any capital expenditures for improvements to the property minus
any depreciation taken.
Adjustment Date
The date on which the interest rate changes
for an adjustable-rate mortgage (ARM).
Adjustment Period
The period that elapses between the
adjustment dates for an adjustable-rate mortgage (ARM).
Administrator
A person appointed by a probate court to
administer the estate of a person who died intestate.
Affidavits
As part of the closing process, you're
likely to sign numerous affidavits. You may be required, for example, to
sign an affidavit of occupancy. It states that you will use the property
as a principal residence. Or, you and the seller may have to sign an
affidavit stating all of the improvements to the property required in the
sales contract were completed before closing.Your lender can provide
additional information regarding any of these documents you will sign.
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.
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.
Amortization
The gradual repayment of a mortgage loan by
installments.
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.
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.
Amortize
To repay a mortgage with regular payments
that cover both principal and interest.
Annual Mortgagor Statement
A report sent to the mortgagor 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.
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).
Annuity
An amount paid yearly or at other regular
intervals, often on a guaranteed dollar basis.
Application
A form used to apply for a mortgage loan
and to record pertinent information concerning a prospective mortgagor and
the proposed security.
Appraisal
A written analysis of the estimated value
of a property prepared by a qualified appraiser. Contrast with home
inspection.
Appraised Value
An opinion of a property's fair market
value, based on an appraiser's knowledge, experience, and analysis of the
property.
Appraiser
A person qualified by education, training,
and experience to estimate the value of real property and personal
property.
Appreciation
An increase in the value of a property due
to changes in market conditions or other causes. The opposite of
depreciation.
Assessed Value
The valuation placed on property by a
public tax assessor for purposes of taxation.
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.
Assessment Rolls
The public record of taxable property.
Assessor
A public official who establishes the value
of a property for taxation purposes.
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).
Assignment
The transfer of a mortgage from one person
to another.
A mortgage that can be taken over ("assumed") by the buyer when a home is
sold.
A provision in an assumable mortgage 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 the
sale or transfer of the property.
Assumption
The transfer of the seller's existing
mortgage to the buyer.
See also "Assumable Mortgage" entry
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.
Assumption Fee
The fee paid to a lender (usually by the
purchaser of real property) resulting from the assumption of an existing
mortgage.
Attorney-in-fact
One who holds a power of attorney from
another to execute documents on behalf of the grantor of the power.
Automated Underwriting
After you complete your loan application
with a lender, it is sent to "underwriting" for review. In short,
underwriting is the process used to analyze how you have managed credit
obligations in the past, whether you have the ability to repay the
mortgage loan you are applying for (i.e., your income and assets), and
whether the price you are willing to pay for the home is supported by the
price of the property.
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