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home :: Mortgage Terms
Glossary A
Mortgage Terms Glossary
A
Abstract of title: a historical summary provided by a title
insurance company of all records affecting the title to a property.
Acceleration clause: a clause that
allows a lender to declare the entire outstanding balance of a loan
immediately due and payable should a borrower violate specific loan
provisions or default on the loan.
Adjustable Rate Mortgage (ARM): a mortgage loan subject to
changes in interest rates; when rates change, ARM monthly payments
increase or decrease at intervals determined by the lender; the
Change in monthly -payment amount, however, is usually subject to a
Cap.
Amenity: a feature of the home or property that serves as a
benefit to the buyer but that is not necessary to its use; may be
natural (like location, Woods, water) or man-made (like a swimming
pool or garden).
Amortization: repayment of a mortgage
loan through monthly installments of principal and interest; the
monthly payment amount is based on a schedule that will allow you to
own your home at the end of a specific time period (for example, 15
or 30 years)
Annual cap: see cap
Annual membership or participation fees: fee that is charged
annually for use of the line of credit, whether or not you use the
credit.
Annual Percentage Rate (APR): a measure
of the cost of credit, expressed as a yearly rate. It includes
interest as well as other charges. Because all lenders follow the
same rules when calculating the APR, it provides consumers with a
good basis for comparing the cost of loans, including mortgages.
Application: the first step in the
official loan approval process; this form is used to record
important information about the potential borrower necessary to the
underwriting process.
Application fee: fees paid with the application forms, such
as for property appraisal or a credit report.
Appraisal: a document that gives an
estimate of a property's fair market value; an appraisal is
generally required by a lender before loan approval to ensure that
the mortgage loan amount is not more than the value of the property.
Appraiser: a qualified individual who
uses his or her experience and knowledge to prepare the appraisal
estimate.
Assessment: charges levied against a
property for tax purposes or to pay for municipal or association
improvements such as curbs, sewers, or grounds maintenance.
Assessor: a government official who is
responsible for determining the value of a property for the purpose
of taxation.
Assignment: The transfer
of a contract or a right to buy property at given rates and terms
from a mortgagee to another person.
Assumable mortgage: a mortgage that can
be transferred from a seller to a buyer; once the loan is assumed by
the buyer the seller is no longer responsible for repaying it; there
may be a fee and/or a credit package involved in the transfer of an
assumable mortgage.
Assumption: an agreement between a
buyer and a seller, requiring lender approval, where the buyer takes
over the payments for a mortgage and accepts the liability.
Related
Topics:
Residential Mortgage Loans
Home Equity Lines of
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