| Term |
Definition |
| abstract of title |
The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all susequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate. |
| 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. |
| ad valorem tax |
A tax levied according to value, generally used to refer to real estate tax. Also called the general tax. |
| 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. |
| 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. |
| 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. |
| affidavit of title |
A written statement, made under oath by a seller or grantor of real property and aknowledged by a notary public, in which the grantor (1) identifies himself or herself and indicates marital status, (2) certifies that since the examination of the title, on the date of the contracts no defects have occured in the title and (3) certifies that he or she is in posessition of the property (if applicable). |
| 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. |
| agency |
The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions. |
| 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 (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. |
| 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. 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. |
| 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. |
| assumable mortgage |
A mortgage that can be taken over ("assumed") by the buyer when a home is sold. |
| assumption |
The transfer of the seller's existing mortgage to the buyer. See assumable mortgage. |
| 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. |
