A | B | C | D | E | F | G | H | I | JK | L | M | N | O | P | Q | R | S | T | U | V | W | YZ |     Home Absract of Title A review of the public records relating to the title to a property. An attorney or title insurance company reviews the abstract of title to establish whether there are any title flaws that must be cleared before a buyer can purchase clear, marketable, and insurable title. Acceleration Clause A provision that allows the lender to demand the immediate repayment of the mortgage loan balance due to circumstances such as: failure to make payments, bankruptcy, nonpayment of taxes on mortgaged property, or the breaking of loan covenants. Acceptance A contractual agreement that binds the offeree to the terms and responsibilities outlined in the offer. Accrued Interest Interest earned for the period of time passed since the interest was last paid. Acquisition Loan A loan made for the sole purpose of purchasing land. Also called "land acquisition loan." Add-on Interest The amount of interest paid on the principal of a loan for the term of that loan. Additional Principal Payment A payment by a borrower made in excess of the required monthly payment in order to reduce the remaining balance on the loan. Adjustable Rate Mortgage (ARM) A mortgage where the interest rate is adjusted periodically based on a pre-selected index. Also known as a "floating rate mortgage." Adjusted Basis The base price of an asset or security that reflects any deductions taken on, or improvements to the asset or security. Adjusted basis is used to compute the gain or loss when the asset or security is sold. Adjusted Gross Income The gross income of a building if it is fully rented, not including an allowance for estimated vacancies. Adjustment Date The date that the interest rate changes on an adjustable rate mortgage (ARM). Adjustment Interval The period of time between changes in the interest rate and/or monthly payments for an adjustable rate mortgage (ARM), typically, one, three, or five years. Adjustment Period The period of time passing between adjustment dates for an adjustable rate mortgage (ARM). Administrator A person appointed by a probate court to manage and distribute the estate of a person who has died without a will. Affordability Analysis An examination of a buyer's ability to afford a house, by reviewing income, liabilities, available funds, mortgage type, home price, and closing costs. Alt-A This is a type of loan program that is almost conforming, but slightly off on one or more criteria. Amortization The repayment of a mortgage loan, both the principal and interest, through regular installments. Amortization Term The number of months required to repay the mortgage loan. Annual Mortgage Statement A report sent to the borrower each year stating the amount of taxes, insurance, and interest paid during the year, as well as the remaining mortgage loan balance. Annual Percentage Rate (APR) A figure that calculates the full cost of a loan including interest rate and all other fees associated with securing a loan. Apartment Conversion The conversion of a rental apartment building to individually owned units. Application Fee The fee charged by the lender to the borrower for applying for a loan. Appraisal A written analysis of the estimated value of a property prepared by a qualified 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 A person familiar with local real estate values, 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. Arms Length Transaction All parties involved in a real estate transaction with no personal interest in the transaction or other involved persons. Assessed Value The valuation placed upon 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. 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. Assignment of Leases & Rents The instrument evidencing transfer by a lessee to the Lender and/or assigns of the exact interest of said lessee including rent receipts. Assumption The act of taking over an obligation or liability of a mortgage note from the previous borrower. Assumption Fee The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage. Assumption of Mortgage An obligation undertaken by the purchaser of property to be legally liable for payment of an existing mortgage. In an assumption, the purchaser is substituted for the original mortgagor in the mortgage instrument and the original mortgagor is to be released from further liability in the assumption, the mortgagee's consent is usually required. Attorney-in-Fact One who holds a power of attorney from another to execute documents on behalf of the grantor of the power. The original mortgagor should always obtain a written release from further liability if he desires to be fully released under the assumption. Failure to obtain such a release renders the original mortgagor liable if the person assuming the mortgage fails to make the monthly payments. An 'Assumption of Mortgage' is often confused with 'purchasing subject to a mortgage.' When one purchases subject to a mortgage, the purchaser agrees to make the monthly mortgage payments on an existing mortgage, but the original mortgagor remains personally liable if the purchaser fails to make the monthly payments. Since the original mortgagor remains liable in the event of default, the mortgagee's consent is not required to a sale subject to a mortgage. Both 'Assumption of Mortgage' and 'Purchasing Subject to a Mortgage' are used to finance the sale of property. They may also be used when a mortgagor is in financial difficulty and desires to sell the property to avoid foreclosure.