Glossary

A

Acceleration clause -
The clause in a mortgage or trust deed that stipulates the entire debt is due
immediately if the mortgagee defaults under the terms of the contract.  

Acquisition cost -
Under an FHA loan, the purchase price or appraised value of the property plus
the estimated closing costs.  

Adjustable Rate Mortgage (ARM) -
A mortgage in which the interest rate is adjusted periodically based on an index.
Also called a variable rate mortgage.  

Adjustment_date -
The date the interest rate changes on an ARM (adjustable rate mortgage).  

Adjustment Interval -
For an adjustable rate mortgage, the time between changes in the interest rate
charged. The most common adjustment intervals are one, three or five years.  

Adjusted book basis -
The purchase price of a property plus any capital improvements less accrued
depreciation, if any, to the date of the sale.  

Amortization -
Literally to "kill off" (root: mort) the outstanding balance of a loan by making equal
payments on a regular schedule (usually monthly). The payments are structured
so that the borrower pays both interest and principal with each equal payment.  

Annual Percentage Rate (APR) -
A figure that states the total yearly cost of a mortgage as expressed by the actual
rate of interest paid. The APR includes the base interest rate, points, and any
other add-on loan fees and costs. As a result the APR is invariably higher for the
rate of interest that the lender quotes for the mortgage but gives a more accurate
picture of the likely cost of the loan. Keep in mind, however, that most mortgages
are not held for their full 15 or 30 year terms, so the effective annual percentage
rate is higher than the quoted APR because the points and loan fees are spread
out over fewer years.  

Annuity -
A series of income payments of receipts over a period of years.  

Application -
A mortgage application requires borrowers to submit information regarding their
income, savings, assets, debts, and more.  

Application Fee -
The fee charged by the lender to the borrower for applying for a loan. Payment of
this fee does not guarantee that a loan will be approved. Some lenders may
apply the cost of the application fee to certain closing costs.  

Appraisal -
The determination of property value based on recent sales information of similar
properties.  

Assessment -
Determining a property's value for the purpose of taxation.  

Assumable Loan -
These loans may be passed on from a seller of a home to the buyer. The buyer
"assumes" all outstanding payments.  

Assumption -
Buying property and assuming the responsibility of the exiting mortgage.  

Appreciation -
Increases in property value due to fluctuations in the market, inflation, et al.  

Asset -
Valuable items, encumbered or not, owned by a person, corporation, or entity.  

Assumable Mortgage -
A mortgage that provides for a buyer to "assume" all outstanding payments
when a home is sold. The buyer usually must meet qualification standards to
assume a loan.  
Just 4 You believes in educating the clients.  Purchasing a home is a very large
commitment which is why understanding the processes is important.  We are
happy to provide you with a Mortgage glossary for your convenience.  Please feel
free to contact us at kowens@closingjust4you.com if you are unable to locate a
word or if you have a closing question.   We will be happy to explain the meaning
and answer any questions you may have.  Please note Just 4 You will not give
any legal advise, we are not attorneys.  If you have legal questions please contact
your attorney for guidance..
For additional questions please contact me at 281-650-7592 or via e-mail at
kowens@closingjust4you.com