Glossary

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Acceptance
The act of accepting an offer to enter into a contract. Acceptance is binding and legal when both parties agree to the initial terms or after both parties have accepted all counter offers.

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
An interest rate that is adjusted periodically on the basis of changes in a specified index.

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.

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).

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 (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). Comparing the Annual Percentage Rates of different loans is regarded as a better way to gauge the overall cost of a loan than simply comparing rates because it takes all of these factors into consideration.

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.

Application Fee
A fee that may be charged by a lender, mortgage broker or mortgage banker to accept a mortgage loan application.

Appraisal
A written analysis of the estimated value of a property prepared by a qualified appraiser. Contrast with home inspection.

Appraisal Fee
A fee charged to complete an estimate of the value of real property. This fee may be paid to the lender or directly to the appraiser.

Appraised Value
An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property.

Appraiser
An individual who is qualified to estimate the value of real 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 value placed on property by a public tax assessor for purposes of taxation.

Assessment
Charges for unpaid improvements from the county or city, e.g. sidewalks, sewer lines or an annual fee for the homeowners' association, etc.

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.

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 Fee
This fee is charged to pay our attorney for the cost of certifying title to the property, preparing loan closing documents and conducting the closing transaction. Generally in the $200-$500 range, depending on the loan amount

Attorney-In-Fact
One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.