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1003: A
loan application that needs to be completed in
order to get a loan approval.
401(k): An employer-sponsored investment
plan that allows individuals to set aside
tax-deferred income for retirement or emergency
purposes and provided by employers that are
private corporations.
403(b): An employer-sponsored investment
plan that allows individuals to set aside
tax-deferred income for retirement or emergency
purposes and provided by employers that are not
for profit organizations.
Abstract of Title: A summary of the
public records relating to the title to a
particular piece of land reviewed by an attorney
or title insurance company to determine whether
there are any title defects which must be
cleared before a buyer can purchase clear,
marketable, and insurable title.
Acceleration Clause: A clause in your
mortgage that gives right to lender to demand
repay the loan balance immediately for various
reasons such as the sale of the property, or a
delinquency in the repayment of the note.
Acceptance: A legal term to describe
event when the buyer offers to buy and the
seller accepts the offer.
Account Executive: A representative of a
lending institution who represents the borrower
to the lending institution to help him/her
secure a loan.
Acknowledgment: A formal declaration made
by a person to a notary public, or other public
official authorized to take acknowledgements,
that the instrument was executed by him and that
it was his free and voluntary act.
Ad Valorem: Translates to "according
to value." A method of imposing a tax on
the ownership of real property.
Adjustable-Rate Mortgage: A mortgage in
which the interest is not fixed but changes
periodically, according to corresponding
fluctuations in an index.
Adjustment Date: The date that the
interest rate changes on an adjustable-rate
mortgage (ARM).
Adverse Possession: The right of an
occupant of land to acquire title against the
real owner.
Affidavit: A written statement or
declaration, sworn to or affirmed before an
officer, who has authority to administer an oath
or affirmation.
Affirmation: A solemn declaration made
under the penalties of perjury by a person who
conscientiously declines taking an oath. Also
known as Oath.
Agency: A relationship in which the agent
is given the authority to act on behalf of
another person. In real estate transactions,
usually the seller is the principal, and the
broker is the agent. In an agency relationship,
the principal delegates to the agent the right
to act on his or her behalf in business
transactions and to exercise some discretion
while so acting.
Agreement of Sale: An agreement for the
purchase or sale of real property; A written
contract between the seller and buyer in which
they both agree on the terms and conditions of
the sale.
All-Inclusive Mortgage: A loan that
allows an existing loan to be refinanced at an
interest rate between the original loan rate and
the currently prevailing market rate.
All-Inclusive Trust Deed: A loan that
allows an existing loan to be refinanced at an
interest rate between the original loan rate and
the currently prevailing market rate.
Amortization: To reduce a debt by regular
payments of both principal and interest, as
opposed to interest only payment. The operation
of paying off indebtedness, such as a mortgage,
by installments. The conventional amortization
periods are 15 or 30 years.
Amortization Schedule: A table which
shows the payment amount applied toward the
principal and the interest amount over the life
of the loan. The gradual decrease of the loan
balance should also be shown until it reaches
zero.
Annual Percentage Rate: The interest rate
reflecting the cost of a mortgage as a yearly
rate. This rate is likely to be higher than the
stated note rate or advertised rate on the
mortgage, because it takes into account point
and other credit cost. the APR allows home
buyers to compare different types of mortgages
based on the annual cost for each loan.
Application: A form used to apply for a
mortgage loan. Types of requested information on
a mortgage loan application include:
borrower’s income, credit history, savings,
assets, debts, etc.
Appraisal: An estimate of value of
property resulting from an analysis of facts
about the property, usually based on an analysis
of comparable sales of similar homes nearby.
Also an opinion of value.
Appraised Value: An estimate of value of
property resulting from an analysis of facts
about the property, usually based on an analysis
of comparable sales of similar homes nearby.
Also an opinion of value.
Appraiser: An individual qualified by
education, training, and experience to estimate
the value of real property and personal
property. Some appraisers work directly for
mortgage lenders, but most are independent.
Appreciation: The increase in the value
of a property due to changes in market
conditions, inflation, etc.
Appurtenance: Something that belongs to
the land and transferred with it, such as
buildings, fixtures, etc.
Assemblage: Putting together two or more
lots to form a large parcel.
Assessed Value: A value placed upon a
property by the tax assessor.
Assessment: The valuation of property for
tax purposes.
Assessor: A public official who
determines property value for taxation purposes.
Asset: Monetary value items owned by an
individual. Assets that can be quickly converted
into cash are called "liquid assets."
These include bank accounts, stocks, bonds,
mutual funds, etc. Other assets include real
estate, personal property, and debts owed to an
individual by others.
Assignment: Transfer of mortgage
ownership from one company or individual to
another company or individual.
Assumable Mortgage: A mortgage that can
be assumed by a qualified buyer when a home is
sold.
Assumption: A buyer "assumes"
or takes over the seller’s mortgage.
Attachment: Seizure of property by court
order.
Attorney in Fact: A person who is
authorized to perform certain acts for another
under a Power of Attorney.
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