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.
adjustable-rate
mortgage (ARM)
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.
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.
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.
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