Mortgage and Loan Glossary (A)
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abandonment
The voluntary surrender of leased or owned property without naming
a successor as tenant or owner.
absentee owner
A property owner who does not personally reside at, or manage the property
owned.
absolute auction
Auction in which property is sold to the highest bidder without regard
to the amount of the winning bid.
absorption rate
An estimate of the anticipated occupancy or expected new sales of a
certain type of land use.
abstract
A statement that summarizes the important points of a larger document.
abstract of title
A summary of the history of the ownership of a property, starting with
the original grant, and including all subsequent encumbrances and
conveyances.
acceleration clause
A loan provision that gives the lender the right to demand payment
of the entire principal balance if the borrower fails to make a monthly
payment.
acceptance
The act of agreeing to enter into a contract and be bound by the terms
of the offer.
addendum
A document used to correct or modify one or more of the terms of a
purchase agreement, without changing the remaining terms.
additional principal payment
Payment 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 allows the lender to adjust its interest rate at specific
intervals based on changes in an established index.
adjusted tax basis
The original cost of a property plus the value of any capital expenditures
for improvements to the property, reduced by any depreciation deductions.
adjustment date
The date on which the interest rate changes for an adjustable-rate
mortgage (ARM).
adjustment period
The period of time between 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 without a will..
affordability analysis
An analysis of a borrower's ability to make a home purchase. It takes
into account assets, income, liabilities and the type of mortgage
considered. In addition, it usually includes the geographic area
of home desired and estimated closing costs.
agent
A licensed person who represents participants in real estate transactions.
amenity
A feature of real property that enhances its attractiveness and increases
the occupant's pleasure although the feature is not essential to
the property’s use. Sometimes amenities are considered the
nonmonetary benefits gained from property ownership.
amortization
The gradual repayment of a debt by periodic installments.
amortization schedule
A timetable that shows the amount of each payment applied to principal
and interest, and shows the remaining balance after each payment
is made.
amortization term
The amount of time required to retire a debt through periodic payments.
The amortization term is often expressed as a number of months.
amortize
To repay a debt with regular payments that cover both principal and
interest.
annual mortgagor statement
An annual report sent to the borrower that shows how much was paid
in taxes and interest during the year, as well as any remaining loan
balance.
annual percentage rate (APR)
The cost of a mortgage stated as a yearly effective interest rate.
It includes such items as interest, mortgage insurance, and any loan
origination fees and points. Disclosure of the APR is required by
the Truth-In-Lending Law.
annuity
An amount paid in a series of equal, or nearly equal, periodic payments.
application
A standardized form used to apply for a loan and to record relevant
facts concerning a prospective borrower and the proposed property.
appraisal
A written analysis of the estimated value of a property. Usually prepared
by a qualified appraiser.
appraisal fee
The fee charged for estimating the value of property offered as security
for a loan.
appraised value
An appraiser's opinion of a property's fair market value. Typically
based on market conditions, experience, and detailed analysis of
the property.
appraiser
A person qualified by training and experience to estimate the value
of real or personal property.
appreciation
An increase in the value of property due to changes in market conditions,
inflation, physical improvement or other causes. The opposite of
depreciation.
assessed value
The value placed on a property by a public tax assessor for property
tax purposes.
assessment
The process of placing a value on property for the purpose of taxation.
May also refer to a special payment due to a municipality or association.
assessment rolls
The public record of the assessed value of taxable property.
assessor
A public official who determines the value of a property for taxation
purposes.
asset
Anything of monetary value that is owned by an individual. Assets may
include real property, personal property and enforceable claims against
others.
assignment
The transfer of a right or contract from one person to another.
assumable mortgage
A mortgage that can be taken over by the buyer when a home is sold
with no change in loan terms.
assumption
The transfer of the seller’s existing loan to the buyer.
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.
(That is, there is no due-on-sale clause.)
assumption fee
The fee charged by a lender, and usually paid by the borrower, resulting
from the assumption of an existing mortgage.
attorney-in-fact
One who holds a power of attorney to act on behalf of the grantor of
the power. Such power may be general or limited in scope.