Real Estate Glossary
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A La Carte Real Estate Services Professional real estate services that are rendered one transaction at a time instead of the conventional full-service, commission-based brokerage relationship. |
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Abandonment The voluntary surrender of property, owned or leased, without naming a successor as owner or tenant. |
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Absentee Owner An owner who does not personally manage or reside at property owned. |
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Absolute Auction An auction in which the subject property is sold to the highest bidder regardless of the amount of the winning bid. |
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Absorption Rate An estimate of the expected annual sales or new occupancy of a particular type of land use. |
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Abstract Exam A fee related to the title insurance required by the lender. A public record search exam is done to insure that both you and the lender are aware of any liens or encumbrances that could affect the property. For our comparison purposes, an abstract exam fee is considered to be a third party fee and may be included in the title insurance fee by some lenders. |
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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. |
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Acceptance A party's consent to enter into a contract and be bound by the terms of the offer. |
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Accepted Contract A sales contract signed by both seller and buyer that defines the terms of the sale. |
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Addendum An addition or change to a contract. |
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Additional Principal Payment A payment by a borrower of more than the scheduled principal amount due, in order to reduce the remaining balance of the loan. |
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Adjustable Rate Mortgage An adjustable rate mortgage, commonly referred to as an ARM, is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan. |
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Adjusted Basis The original cost of a property, plus the value of any capital expenditures for improvements to the property, minus any depreciation taken. |
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Adjustment Date The date on which the interest rate changes for an adjustable-rate mortgage (ARM). |
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Adjustment Period The period that elapses between the adjustment dates for an adjustable rate mortgage (ARM). |
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Administrative Fee A fee charged by a lender to cover the administrative costs of processing your loan request. For our comparison purposes, this fee is typically a lender fee. |
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Administrator A person appointed by a probate court to administer the estate of a person who died intestate. |
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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. |
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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. Man-made amenities include swimming pools, tennis courts, community buildings and other recreational facilities. |
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Amortization A loan repayment plan, which enables the borrower to reduce his debt gradually through monthly payments of principal and interest. |
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Amortization Schedule A timetable for payment of a mortgage loan. An amortization schedule shows the amount of each payment applied to interest and principals and shows the remaining balance after each payment is made. |
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Amortization Term The amount of time required to amortize the mortgage loan. The amortization is expressed as a number of months. For example, for a 30 year fixed rate mortgage, the amortization term is 360 months. |
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Amortize To repay a mortgage with regular payments that cover both principal and interest. |
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Annual Fee The annual fee for a line of credit is due at the beginning of the first anniversary of the credit line and every year thereafter. |
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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. |
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Annual Percentage Rate (APR) To make it easier for consumers to compare mortgage loan interest rates, the federal government developed a standard format called an "Annual Percentage Rate" or APR to provide an effective interest rate for comparison shopping purposes. Some of the costs that you pay at closing are factored into the APR for ease of comparison. |
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Annuity A specified income paid yearly or at other regular intervals, often on a guaranteed dollar basis. |
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Application The process of applying for a mortgage. The term "application" generally refers to a form that is used to collect financial information from a borrower by a lender. |
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Application Deposit Funds required by a lender in advance of processing a loan request. Generally a deposit is collected to cover the costs of an appraisal and credit report and may or may not be refundable. |
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Appraisal An analysis performed by a qualified individual to determine the estimated value of a home. |
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Appraisal Fee In order to verify that the value of your home supports the loan amount you request, an appraisal will be ordered by the lender. The appraisal is generally performed by a professional who is familiar with home values in the area and may or may not require an interior inspection of the home. The fee for the appraisal is commonly passed on to the borrower by the lender. For our comparison purposes, the appraisal fee is a third party fee. |
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Appraised Value An opinion of a property's fair market value, based on an appraiser's knowledge, experience and analysis of the property. |
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Appraiser A person qualified by education, training, and experience to estimate the value of real property and personal property. |
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Appreciation An increase in the value of a property due to changes in market conditions and other causes. The opposite of depreciation. |
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APR To make it easier for consumers to compare mortgage loan interest rates the federal government developed a standard format, called an "Annual Percentage Rate" or APR, to provide an effective interest rate for comparison shopping purposes. Some of the costs that you pay at closing are factored into the APR for ease of comparison. Your actual monthly payments are based on the periodic interest rate, not the APR. |
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ARM An ARM (adjustable rate mortgage) is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan. |
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Assessed Value The valuation placed on property by a public tax assessor for purposes of taxation. |
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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. |
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Assessment Rolls The public record of taxable property. |
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Assessor A public official who establishes the value of a property for taxation purposes. |
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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). |
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Assignment The transfer of a mortgage from one person to another. |
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Assumable Mortgage A loan that does not have to be paid in full if the home is sold. Instead, the new owner can take over payments on the existing loan and pay the seller the difference between the sales price and the balance on the loan. |
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Assumption The transfer of the seller's existing mortgage to the buyer. See assumable mortgage. |
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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. |
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Assumption Fee The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage. |
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Attorney Opinion Commonly referred to as a "title opinion". This fee is related to the title insurance required by the lender. It is a document issued by an attorney listing any liens or encumbrances that could affect the property that are a matter of public record. For our comparison purposes, the attorney opinion fee is considered to be a third party fee and may be included in the title insurance or closing fee by some lenders. |
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Attorney Witness Related to the settlement/closing fee. This fee is standard in some states and is the closing attorney's fee for witnessing the signing of the closing documents. For our comparison purposes, an attorney witness fee is considered to be a third party fee and may be included in the title insurance or closing fee by some lenders. |
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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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