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GLOSSARY
A- credit
The best credit rating that you can have. A FICO score above 720 will get you the best offer the lender can offer and the best interest rates. When applying for a mortgage loan, you will want your credit score to be as high as you can make it. Start working on this immediately.
Abandonment
Abandonment happens when the person with a right or interest in a property gives up their interest. Once property has been "abandoned," it is no longer the property of the estate. This can happen either by physically abandoning the property or by demonstrating the intention of giving up the right or interest.
Abandonment value
Abandonment value is the amount which could be recovered from an asset or project if it were liquidated or terminated immediately. Investors would compare an asset's abandonment value to that asset's projected earnings to decide whether or not to continue supporting that asset.
Abatement
Abatement is a decrease or reduction. In business, the term usually refers to a decrease in a payment obligation, such as tax or debt. Rent abatement is a court-ordered reduction in rents payable due to uninhabitable living conditions.
Ability to Pay
A principle of taxation. Individuals who earn more money will pay more income tax not because they utilize more of the government services but because they have the ability to pay more.
Above-the-line deduction
Above-the-line deductions are tax items that are subtracted from, or added to, gross income in the calculation of adjusted gross income (AGI).
Abstract of judgment
An abstract of judgment is a court document describing a court-ordered, monetary award. The document can be filed with the county recorder's office to establish a lien against property owned by the defendant.
Abstract of title
A summary listing of all the transactions that pertain to the title on a specific piece of land. An abstract of title covers the time from when the property was first sold to the present. This information can be used to create a title binder.
Academy of Financial Divorce Practitioners
The Academy of Financial Divorce Practitioners educates and certifies financial service professionals in the financial consequences of property settlements, child support, and other divorce-related issues. Certified members are awarded the CFDP (Certified Financial Divorce Practitioner) designation.
Accelerated cost recovery system
Accelerated cost recovery system, also known as ACRS, is a depreciation method that was introduced and defined in the Economic Recovery Tax Act of 1981. ACRS allows for rapid depreciation (for tax purposes) of property placed into service between 1981 and 1986.
Accelerated depreciation
A bookkeeping method primarily for tax purposes that shows how the property is losing value. Depreciation is the reduction of the properties value over passing time. If the property is losing its value quickly, the value can be accelerated so that the majority of its value is lost in the first few years but slows down over the later years in ownership.
Accelerated payments
Accelerated payments are amounts applied to a loan over and above the required repayments. These additional, unscheduled payments lower the balance of debt outstanding, and can lead to interest savings and early pay-off.
Accelerated use
Accelerated use is a program associated with timeshare ownership. It allows an owner/member who has purchased one week annually, for example, to use more than one week in some years, and less than one week in other years. A 10-year ownership program with accelerated use might allow an owner/member to take two five-week vacations rather than 10, one-week vacations.
Acceleration
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due on Sale Clause.
Acceleration Clause
A mortgage acceleration clause is a common provision of a mortgage or note providing the holder with the right to demand that the full outstanding balance is immediately due in the event of default. This is a legal right that is bestowed on the mortgage or loan if the borrower fails to live up to his or her obligations.