Mortgage Dictionary for words that start with letter A
A form of an interim loan, generally made between - Broker
Abstract - A summary; an abridgment. Before the use of photo static copying public records were kept by abstracts of recorded documents.
Abstract of Title - A summary of the public records relating to the title to a particular piece of land. An attorney or title insurance company reviews an abstract of title to determine whether there are any title defects which must be cleared before a buyer can purchase clear, marketable, and insurance title.
Acceleration Clause - Provision in a mortgage document stating that if a payment is missed or any other provision is violated the whole debt becomes immediately due and payable.
Acknowledgment - Formal declaration before a public official that one has signed a document. Prior to recording real estate legal documents, such as grant deeds and deeds of trust, a Notary Public acknowledges the person's signature on the document.
Acre - A measure of land equal to 43,560 square feet.
Action to Quiet Title - A court action to establish ownership of real property. Although technically not an action to remove a cloud on title, the two actions are usually referred to as Quiet Title actions.
Ad Valorem - Designates an assessment of taxes against property. Literally, according to value; based on the ability to pay theory.
Adjustable Rate Mortgage (ARM) - A mortgage where the interest rate is not fixed for the life of the loan. These mortgages adjust periodically based on an index that changes with market conditions. The rate of interest is the sum of the index plus a margin ( the margin remains fixed for the life of the loan). Most ARMs have periodic interest rate and payment caps, as well as a life cap. ARM's may also be referred to as AML's or VRM's.
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).
Adverse Possession - The actual, exclusive, open notorious, hostile and continuous possession and occupation of real property under an evident claim of right or title. The time required legally to obtain title by adverse possession varies from state to state.
Agency - A contract by which the agent undertakes to represent the principal in business transactions, using some degree of discretion.
Agent - Person authorized to act on behalf of another in dealings with third parties.
Agreement of Sale - An agreement between parties for the sale of real estate. In some states it is synonymous with a Purchase Agreement, Sales Agreement, or Land Contract. In Texas it is known as an Earnest Money Contract.
Alienation Clause - Provision in a mortgage document stating that the loan must be paid in full if ownership is transferred.
Amenities - The qualities and state of being pleasant and agreeable. In appraising, those qualities that attach to property in the benefits derived from other than monetary. Satisfactions of possession and use arising from architectural excellence, scenic beauty and social environment.
American Land Title Association - Title policy that assures a lender that it has the proper rights as the beneficiary on a mortgage loan.
amortization - The repayment of a mortgage loan by installments with regular payments to cover the principal and interest.
Amortization - Gradual payment of a debt through regular installments that cover both interest and principal.
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.
Annual Percentage Rate (APR) - A measure of the total cost of credit (interest as well as other recurring charges) expressed as a yearly percentage rate. Because all lenders apply the same rules in calculating the annual percentage rate, it provides consumers with a good basis for comparing the cost of loans.
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).
application - A form, commonly referred to as a 1003 form, used to apply for a mortgage and to provide information regarding a prospective mortgagor and the proposed security.
appraisal - A written analysis of the estimated value of a property prepared by a qualified appraiser.
Appraisal and Credit Report Fees - These fees are generally collected by the lender and paid to outside companies performing the services.
Appraisal Report - Estimate of real estate value, presumably by an expert. An appraisal evaluates the property at a given time based on facts regarding the location, improvements, neighborhood and comparable sales. Generally, the value is based on three approaches: cost, market and income.
Appraised Value - An expert option of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.
appraiser - A person qualified by education, training, and experience to estimate the value of real property and personal property.
Appreciation - Increase in value or worth of property.
appreciation - An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.
Arrears - Payment made after it is due is in arrears. Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance.
Assessed Valuation - Value placed on real estate by governmental assessors as a basis for levying property taxes; not identical with appraised or market value.
Assessment Base - The total assessed value of all property in a given assessment district.
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 - Transfer of a contract from one party to another.
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.
Assumption - New owner assumes the responsibility for repaying an existing mortgage. Both FHA and VA loans are fully assumable. Some adjustable rate mortgages may be partially assumable, but the new owners may be required to re-qualify for the loan.
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.
Attached Homes - A home that has one or more common walls adjoining another home. Condominiums and row houses are attached homes.
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Mortgagor and Mortgagee -
Mortgagor is also called the borrower or owner, while Mortgagee is also called the lender.
Face Value -
The borrower promises to the pay the original principal amount which is the face value of the mortgage.
First mortgage and Second mortgage -
The first mortgage refers to the current mortgage, while the second mortgage refers to the additional mortgage.
Fair Market Value -
It is the median price between the highest price acceptable to buyer and lowest price acceptable to seller.
Market Value -
It is the most likely price at which the property would sell.