|
Word |
Definition |
| Abstract of Title |
A compilation of the recorded documents relating to a parcel of land, from which an attorney may give an opinion as to the condition of this title. Still in use in some states, but giving way to the use of title insurance. |
| Acceleration Clause |
Clause used in an installment note and mortgage which give the lender the right demand the payment in full upon the happening of a certain event, such as failure to pay an installment by a certain date, change of ownership without the lender's consent, destruction of the property, or other event which endangers the security of the loan. |
| Adjustable Rate Mortgage (ARM) |
Mortgage loans under which the interest rate periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. |
| Agreement of Sale |
In some states it is synonymous with a purchase agreement. In other states, it is synonymous with a land contract. This is different depending upon the area of country. |
| Alienation Clause |
A clause that calls for debt under a mortgage or deed of trust to be due in its entirety, upon transfer of ownership of the property. This is the same as "Due on Sale" clause. |
| Amortization |
Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments. |
| Annual Percentage Rate (APR) |
The yearly interest percentage of a loan, as expressed by the actual rate of interest paid. Example: 6% add-on interest would be much more that 6% simple interest, even though both would say 6%. The APR is disclosed as a requirement of federal truth in lending status. |
| Appraised Value |
An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings. |
| 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. |
| Assessment |
A local tax levied against a property for a specific purpose, such as a sewer, or street lights. |
| Assumption of Mortgage |
The agreement by a buyer to assume the liability under an existing not secured by a mortgage or deed of trust. The lender usually must approve the new debtor in order to release the existing debtor from liability. |
