Real Estate Dictionary (Section A)
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acceleration clause
A provision in a mortgage that gives
the lender the right to demand payment of the entire principal balance if a
monthly payment is missed.
acceptance
An offeree’s consent to enter into a contract
and be bound by the terms of the offer.
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 mortgage (ARM)
A mortgage that permits
the lender to adjust its interest rate periodically on the basis of changes in a
specified index.
adjusted basis
The original cost of a property plus the
value of any capital expenditures for improvements to the property minus any
depreciation taken.
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).
administrator
A person appointed by a probate court to
administer the estate of a person who died intestate.
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
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).
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.
appraisal
A written analysis of the estimated value of a
property prepared by a qualified appraiser. Contrast with home inspection.
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 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.
assessed value
The valuation placed on 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.
assessment rolls
The public record of taxable property.
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. See assumable mortgage.
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-in-fact
One who holds a power of attorney from
another to execute documents on behalf of the grantor of the power.
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