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OPELIKA, AL | Friday, May 09, 2008 |
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Real Estate Terms Glossary
acceleration clause
A clause in your mortgage which allows the lender to demand
payment of the outstanding loan balance for various reasons. The
most common reasons for accelerating a loan are if the borrower
defaults on the loan or transfers title to another individual
without informing the lender.
adjustable-rate mortgage (ARM)
A mortgage in which the interest changes periodically, according
to corresponding fluctuations in an index. All ARMs are tied to
indexes.
adjustment date
The date the
interest rate changes on an adjustable-rate mortgage
amortization
The loan payment consists of a portion which will be applied to
pay the accruing interest on a loan, with the remainder being
applied to the principal. Over time, the interest portion
decreases as the loan balance decreases, and the amount applied to
principal increases so that the loan is paid off (amortized) in
the specified time.
amortization schedule
A table which shows how much of each payment will be applied
toward principal and how much toward interest over the life of the
loan. It also shows the gradual decrease of the loan balance until
it reaches zero.
annual percentage rate (APR)
This is not the note rate on your loan. It is a value created
according to a government formula intended to reflect the true
annual cost of borrowing, expressed as a percentage. It works sort
of like this, but not exactly, so only use this as a guideline:
deduct the closing costs from your loan amount, then using your
actual loan payment, calculate what the interest rate would be on
this amount instead of your actual loan amount. You will come up
with a number close to the APR. Because you are using the same
payment on a smaller amount, the APR is always higher than the
actual not rate on your loan.
application
The form used to apply for a mortgage loan, containing information
about a borrower’s income, savings, assets, debts, and more.
appraisal
A written justification of the price paid for a property,
primarily based on an analysis of comparable sales of similar
homes nearby.
appraised value
An opinion of a property's fair market value, based on an
appraiser's knowledge, experience, and analysis of the property.
Since an appraisal is based primarily on comparable sales, and the
most recent sale is the one on the property in question, the
appraisal usually comes out at the purchase price.
appraiser
An individual qualified by education, training, and experience to
estimate the value of real property and personal property.
Although some appraisers work directly for mortgage lenders, most
are independent.
appreciation
The increase in the value of a property due to changes in market
conditions, inflation, or other causes.
assessed value
The valuation placed on property by a public tax assessor for
purposes of taxation.
assessment
The placing of a value on property for the purpose of taxation.
assessor
A public official who establishes the value of a property for
taxation purposes.
asset
Items of value owned by an individual. Assets that can be quickly
converted into cash are considered "liquid assets."
These include bank accounts, stocks, bonds, mutual funds, and so
on. Other assets include real estate, personal property, and debts
owed to an individual by others.
assignment
When ownership of your mortgage is transferred from one company or
individual to another, it is called an assignment.
assumable mortgage
A mortgage that can be assumed by the buyer when a home is sold.
Usually, the borrower must "qualify" in order to assume
the loan.
assumption
The term applied when
a buyer assumes the seller’s mortgage.
Equal Housing Opportunity
REALTOR® -- A registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics. Inquiries regarding the Code of Ethics should be directed to the board in which a REALTOR® holds membership.
John Rice, LLC Realtors
334-364-0480
fax: 334-364-0481
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