A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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- 3/1, 5/1, 7/1 and 10/1 ARMs
Adjustable-rate mortgages in which rate is fixed for three-year, five-year, seven-year and
ten-year periods, respectively, but may adjust annually after that.
- 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 insurable title.
- Acceleration Clause
Condition in a mortgage that may require the balance of the loan to become due
immediately, if regular mortgage payments are not made or for breach of other conditions
of the mortgage.
- Adjustable Rate Mortgage (ARM)
Adjustable Rate Mortgage (ARM) is a mortgage in which the interest rate is adjusted
periodically based on a pre-selected index. Also sometimes known as the renegotiable rate
mortgage, the variable rate mortgage or the Canadian rollover mortgage.
- Adjusted basis
Adjusted basis is the cost of a property plus the value of any capital expenditures for improvements to the
property minus any depreciation taken.
- Adjustment
date
Adjustment Date is the date that the interest rate changes on an adjustable-rate mortgage (ARM).
- Adjustment
interval
On an adjustable rate mortgage, the time between changes in the interest rate and/or
monthly payment, typically one, three or five years depending on the index.
- Affordability analysis
An analysis of a buyers ability to afford the purchase of a home. Reviews income,
liabilities, and available funds, and considers the type of mortgage you plan to use, the
area where you want to purchase a home, and the closing costs that are likely.
- Amortization
Equal periodic payments calculated to pay off the loan at the end of a fixed period,
typically 15 or 30 years, including accrued interest on the outstanding balance.
- Amortization
term
The length of time required to amortize the mortgage loan expressed as a number of months.
For example, 360 months is the amortization term for a 30-year fixed-rate mortgage.
- 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.
- Annual Percentage Rate (APR)
An interest rate reflecting the cost of a loan as a yearly rate. This rate is likely to be
higher than the stated note rate on the mortgage, as it takes into account interest,
mortgage insurance, loan origination fee (points) and other credit costs. The APR allows
borrowers to compare different types of mortgages based on the annual cost for each loan.
- Appraisal
Estimate of the value of property by a qualified professional called an
"appraiser."
- Appraised Value
An opinion of a property's fair market value, based on an appraiser's knowledge,
experience, and analysis of the property.
- APR
See Annual Percentage Rate.
- ARM
See Adjustable Rate Mortgage .
- Assessment
A local tax levied against a property for a specific purpose, such as a sewer or street
lights.
- 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.
- Assumption
Agreement between buyer and lender where the buyer takes over the payments on an existing
mortgage.
- Assumption Fee
The fee paid to a lender (usually by the purchaser of real property) when an assumption
takes place.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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