Mortgage and Real Estate Terms Sorted Alphabetically:
A - adjustable
rate mortgage, adjustment interval, amortization,
annual percentage rate (APR)…more
ADJUSTABLE RATE MORTGAGE (ARM) - a mortgage with
an interest rate that changes periodically, according
to an index that is selected when the mortgage is
issued. The initial interest rate is lower than that
for fixed
rate mortgages, but monthly payments can go up
or down when the rate is adjusted. The most commonly
used "indexes" are LIBOR and the 11th District
COFI.
ADJUSTMENT INTERVAL - the period of time between
changes in the interest rate for an adjustable-rate
mortgage. Typical adjustable intervals are one year,
three and five years. Monthly payments may not always
adjust when the interest rate does.
AMORTIZATION - the gradual repayment of a loan by
installments over a set period of time.
ANNUAL PERCENTAGE RATE (APR) - along with its now
famous Regulation Z, APR was a product of the 1965
Consumer Credit Protection Act. As was often the case
at that time, different types of funding sources quoted
"rates" in many misleading and deceptive
manners. The Federal Government stepped in and created
this National body of consumer law, which protects
consumers in many ways. One of its’ major changes
affecting consumer lenders nationwide, the reason
for the creation of an Annual Percentage Rate (APR),
was to provide a benchmark for comparing different
types of costs, fees, charges, interest etc. as they
get blended together by one lender or another. APR
includes more than only "interest." It's
a stated rate that reflects all the financing costs
of a transaction. The APR includes points, origination
fees and other finance charges in addition to the
interest on the loan, and includes them all in a yearly
"percentage rate". As a result, the APR
is usually higher than the "interest" rate
alone. It's technically the "yield" or "return
on investment expressed as a percentage" received
by the lender. This area of disclosure does not apply
to "commercial" transactions.
APPRAISAL - an originally typed and signed estimate
of the value of a property on a specific date, made
by a qualified educated licensed professional called
an "appraiser" for the benefit of the Lender.
No photocopy can be used, and no appraisal done for
one lender, then switched to a secondary Lender, would
ever be acceptable. Its’ purpose is to confirm
customers assertion of value of proposed collateral,
and to determine an independent valuation for lending
purposes. Generally they are ordered by the loan provider
- with a qualified appraiser - and paid for the customer.
They are the property (owned) of the loan provider;
customers are entitled to a copy for their own records
at closing.
APPRAISED VALUE - an opinion of a property's fair
market value, based on what a willing buyer will sell
and what a willing seller will pay for a piece of
real property, in an arms-length transaction, and
on an appraiser's knowledge, experience, and analysis
of the property.
APPRAISER - a person qualified by education, training,
experience and license to estimate the value of real
property. Most funding sources will not accept an
appraisal from just any appraiser; they often have
approved appraiser lists of acceptable individuals
or firms with whom they have had experience. An appraisal
from your brother-in-law, or the friendly Realtor
down the street, will not be acceptable to most institutional
lender funding sources.
APPRECIATION - an increase in the value of a property
due to changes in market conditions or other causes.
The opposite of depreciation.
ASSUMABLE MORTGAGE - a mortgage that can be taken
over (assumed) by the buyer when the home is sold.
ASSUMPTION - the transfer of the seller's existing
mortgage to the buyer.
ASSUMPTION FEE - the amount paid, if any, to a lender
for the paperwork and processing of an assumable existing
mortgage. Many lenders can refuse to let a buyer assume
the sellers existing mortgage, be sure and check first!
Mortgage Glossary - Mortgage and Real Estate Terms Sorted Alphabetically:
Mortgage
Glossary
A
- adjustable rate mortgage, adjustment interval, amortization,
annual percentage rate (APR) - more
B
- balloon mortgage, bankruptcy, basis point, beneficiary
- more
C
- caps, cash flow, cash out (second mortgage), cash
out refinance - more
D
- debt consolidation, debt service, debt reduction
plan, debt-to-income ratio - more
E
- earned and unearned income, earnest money, easement,
economic life - more
F
- Fair Credit Reporting Act, fair market value, Fannie
Mae - more
G
- good faith estimate, grace period, gradual payment
mortgage (GPM), grantee - more
H
- home equity, home improvement loan, Home Mortgage
Disclosure Act (HMDA) - more
I
- index, in file credit report, inflation, initial
interest rate, ingress and egress - more
L
- lender buy-down mortgage, liability insurance, LIBOR,
loan application - more
M
- manufactured home, market value, maximum loan amount,
mechanic's liens - more
N
- negative amortized (Neg/AM), Neg AM Loans, negative
cash flow, net worth - more
O
- obsolescence, off-site improvements, on-site improvements,
ordinary income - more
P
- par, partial payment, partnership, party wall, payment
shock - more
Q
- quality control, quit claim deed, quote - more
R
- rate shopper, real property, real estate loans,
reconciliation - more
S
- sales contract, satisfaction or mortgage, seasoned
mortgage, second mortgage - more
T
- tax lien, tenancy in common, tenant, term, title,
title insurance - more
U
- underwriting, unencumbered property, uniform commercial
code (UCC)ï -more
V
- VA (Department of Veterans Affairs) Mortgage, vacancy
rate, VA funding fee - more
