Acceptance - A buyer's or seller's agreement
to enter into a contract and be bound by the terms of the offer.
Additional
Principal Payment - A payment made by a borrower of more than the
scheduled principal amount due, in order to reduce
the outstanding balance on the loan, to save on interest over
the life of the loan and/or pay off the loan early.
Adjustable
Rate Mortgage (ARM) - stands for Adjustable Rate Mortgage, also
referred to as a Variable Rate Mortgage. They both mean
the same thing. An ARM is a mortgage with an interest rate that
adjusts periodically to reflect changes in market conditions.
Your mortgage payments are adjusted up or down (usually on an
annual basis) as the interest rate changes. To protect you in
a rising interest market, rate increases are limited (usually
2 percentage points annually; 6 percentage points over the life
of the loan).
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,
etc. Man-made amenities include swimming pools, tennis courts,
community buildings, and other recreational facilities.
Amortization - The gradual repayment of a home loan by periodic installments.
Amortization
Schedule - A timetable for payment of a home loan. An amortization
schedule shows the amount of each payment applied
to interest and principal and the remaining balance after each
payment is made.
Amortization Term (period) - The amount of time
it takes to pay off the loan. The amortization term is expressed
as a number
of months. For example, for a 30 year fixed rate loan, the amortization
term is 360 months.
Amortize - To repay a loan with regular payments
that cover both principal and interest.
Annual Percentage Rate (APR) - stands for Annual Percentage Rate. This refers to the interest
rate that reflects the actual cost
of a mortgage as a yearly rate. Because APR includes points and
other costs associated with the mortgage, it's usually higher
than the advertised simple interest rate. The APR more accurately
reflects what you'll be paying and allows you to compare different
mortgages based on actual costs.
Application (or 1003) - A form
to be completed by a home loan applicant with the lender's assistance
to provide pertinent information
about a prospective borrower's employment, income, assets, debts
and other financial information, about the purpose of the home
loan, and about the property securing the home loan. Lenders
also sometimes call it a 1003-the form number of Fannie Mae's
standard application form.
Application Fee - A fee usually paid
at the time an application is given to a lender for helping to
complete and review an application.
Some lenders collect fees for a property appraisal and a credit
report, instead of an application fee, at the time of application.
Appraisal - An estimate of the value of a home, made by a professional appraiser.
The maximum amount of the mortgage is usually based
on the appraisal.
Appraised Value - The dollar figure for a property's
estimated fair market value, based on an appraiser's knowledge,
experience,
and analysis of the property and comparable properties near by.
Appraiser - A person qualified by education, training, and experience to
estimate the value of real property.
Appreciation - An increase
in the value of a property due to changes in market conditions
or other causes. Inflation, increased
demand, home improvement, and sweat equity are all causes of
appreciation. The opposite of depreciation.
Assessed Value - The
value used to determine property taxes, based on a public tax assessor's
opinion. Contrast with appraised
value.
Assessment - The amount of tax due to local government.
May also refer to the amount due to local government or to common
owners
of a property (e.g., a homeowner's association) for a special
payment to cover expenses for improvements or maintenance, such
as new sewers or roads.
Assessment Rolls - A public record of
the assessed value of property in the taxing jurisdiction.
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).
Assumable Loan - A home loan that allows a
new purchaser of the home to take over ("assume") the
loan obligations of the seller when a home is sold.
Assumption Clause - A provision in an assumable loan that allows a buyer to assume
responsibility for the home loan from the seller.
The loan does not need to be paid in full by the original borrower
(seller) upon sale or transfer of the property.
Assumption Fee - The fee paid to a lender (usually by the buyer) for the lender's
agreement to start collecting payment from
the buyer instead of the original borrower (seller).
