| Abstract | 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. |
| 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 insurance title. |
| Acceleration | An offeree¦s consent to enter into a contract and be bound by the terms of the offer. |
| 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. |
| Acknowledgment | Formal declaration before a public official that one has signed a document. Prior to recording real estate legal documents, such as grant deeds and deeds of trust, a Notary Public acknowledges the person's signature on the document. |
| Acre | A measure of land equal to 43,560 square feet. |
| Action to Quiet Title | A court action to establish ownership of real property. Although technically not an action to remove a cloud on title, the two actions are usually referred to as Quiet Title actions. |
| Ad Valorem | Designates an assessment of taxes against property. Literally, according to value; based on the ability to pay theory. |
| Additional Principal Payments | 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 or VRM) | (ARM or VRM) - A mortgage loan in which the interest rate varies in accordance with changes in a specified index, and may result in changed monthly payments. For further information, refer to the consumer handbook on adjustable rate mortgages. ARM's may also be referred to as AML's or VRM's. |
| Adjusted Basis | The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken. |
| Adjusted Interval | For an adjustable rate mortgage, the time between changes in the interest rate charged. The most common adjustment intervals are one, three or five years. |
| Adjustment Period | The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM). |
| Adverse Action | Denial of a loan in an amount and on terms acceptable to the borrower. |
| Adverse Possession | The actual, exclusive, open notorious, hostile and continuous possession and occupation of real property under an evident claim of right or title. The time required legally to obtain title by adverse possession varies from state to state. |
| Agency | A contract by which the agent undertakes to represent the principal in business transactions, using some degree of discretion. |
| Agent | Person authorized to act on behalf of another in dealings with third parties. |
| Agreement of Sale | Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties. |
| Alienation Clause | Provision in a mortgage document stating that the loan must be paid in full if ownership is transferred. |
| Amenities | 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. |
| American Land Title Association | Title policy that assures a lender that it has the proper rights as the beneficiary on a mortgage loan. |
| Amortization | Gradual payment of a debt through regular installments that cover both interest and principal. A payment plan, which enables the borrower to reduce his debt gradually through monthly payments of principal. |
| Amortization schedule | A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance. A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance. |
| Annual Percentage Rate (APR) | The actual cost of credit to the borrower, including interest and certain other changes, expressed as a yearly rate and calculated over the life of the loan. A guide to compare the cost of loans.ß |
| Application | A form used to apply for a mortgage loan and to record pertinent information concerning a prospective mortgagor and the proposed security. |
| Application Fee | The fee charged by the lender to the borrower for applying for a loan. These fees are generally collected by the lender and paid to outside companies performing the services. |
| Appraisal | An inspection of the property to assure that its market value exceeds the amount of the loan. A fee may be charged for the appraisal. |
| Appraisal Report | Estimate of real estate value, presumably by an expert. An appraisal evaluates the property at a given time based on facts regarding the location, improvements, neighborhood and comparable sales. Generally, the value is based on three approaches: cost, market and income. |
| Appraised Value | An expert option of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings. 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 | Increase in value or worth of property. |
| Arrears | Payment made after it is due is in arrears. Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance. |
| As is | A clause that is sometimes used in the transfer of property. It means that the present property is being transferred with no guarantee or warranty provided by the seller. |
| Assessed Valuation | Value placed on real estate by governmental assessors as a basis for levying property taxes; not identical with appraised or market value. The valuation placed upon property by a public tax assessor for purposes of taxation. |
| Assessment Base | The total assessed value of all property in a given assessment district. |
| 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 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. |
| Assumption | New owner assumes the responsibility for repaying an existing mortgage. Both FHA and VA loans are fully assumable. Some adjustable rate mortgages may be partially assumable, but the new owners may be required to re-qualify for the loan. |
| Assumption Fee | The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage. |
| Assumption of Mortgage | An obligation undertaken by the purchaser of property to be personally liable for payment of an existing mortgage. In an assumption, the purchaser is substituted for the original mortgagor in the mortgage instrument and the original mortgagor is to be released from further liability in the assumption, the mortgagee's consent is usually required. |
| Attached Homes | A home that has one or more common walls adjoining another home. Condominiums and row houses are attached homes. |
| Attorney-in-fact | One who holds a power of attorney from another to execute documents on behalf of the grantor of the power. The original mortgagor should always obtain a written release from further liability if he desires to be fully released under the assumption. |
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