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GLOSSARY
Aggregate Adjustment
An aggregate adjustment determines the amount of money placed in a borrower's escrow account at closing. An aggregate adjustment works to ensure that the borrower's escrow account maintains the necessary balance throughout the year; particularly when taxes and insurance are paid.
Amenity
a feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use; something that contributes to the physical or material comfort. Having amenities will increase the value and attractiveness of a piece of property, or a location.
Amortization
A payment to pay off part of a debt or a loan. This payment is usually periodical. Given that the monthly payment exceed the interest payment for a period, the debt balance or remindning loan balance, is decreasing. In some cases there is a anuity payment plan, that is there is equal payments per period. In this case the amortization part of a payment is the part of the payment that is used to pay off a part of the debt. The remaining part of the payment for the period is paid for the interest accrued on the loan. A loan is amortized over a period in order to have it paid off (fully or partly) over the loan period. In you payment plan for a mortgage or loan you will find the amortization part, as well as interest part, per month (or period). In the case with fixed mortgage interest rates the amortization part is fixed and predictable. In the case with adjustable mortgage interest rates, the total payment may vary over time, as may the actual amortization in some cases depedning on type of mortgage or loan. However, typically there is a amortzation plan that let you know exactly how large your remaining debt will be at the end of each month (period). Se further Amortization Schedule and Amortization Term.
Amortization schedule
It is a comprehensive schedule of payments tabling the break up of the mortgage amount, interest amount, principle received, and balance due through each period of loan till the loan balances reaches nil.
Annual percentage rate (APR)
It is an expression of the effective rate of interest that will have to be paid on a loan. It is taken as a percentage and calculated as a yearly rate. It is usually different and higher than the advertised rate because it includes one time fees and other costs which help to determine the total cost of borrowing. It is a measure to compare different loans offered by competing lenders taking into account both interest rate and closing fees. It is essential to know the total amount of fees involved as different lenders have different set of fees included in the APR. As a rough guide to calculating the apr, first deduct the fees from the loan amount. Then calculate the interest rate on the actual loan payment amount instead of the actual loan amount. The amount will be a number close to your APR.
Application
An application is a form poularly known as Form 1003. It is needed to apply for a mortgage and provides information about the prospective borrower/mortgagor like his savings, income, assets, debts as well as the security to be offered.
Appraisal
It is an estimated value of a property, based on a analytical comparison of similar saleable property.\n\nSee further Apprasier, Assessment, Fair market value
Appraisal Fee
The fee charged by a certified appraiser to render an opinion of market value of property. This fee is paid to an outside appraisal company to objectively determine the fair market value of your property. This fee can vary depending on the item being appraised and the geographical location.
Apprasier
A qualified professional who has had the necessary academic expertise, training and experience to give a fair estimation of the value of real and personal property.\n\nSee further Appraisal, Assessment
Appreciation
It is the rise in the value of property because of fluctuations in market conditions and other causes like inflation, costs and standard of living.
Arbitration
A nonjudicial attempt to resolve a controversy using a neutral third party. By making arbitration a condition of the loan contract, many lenders impose arbitration on consumers.
Assessment
The assigning of an approximate taxable value on a property for a specific purpose.\n\n See further Appraisal, Assessment, Appraiser
Asset
Any property or possession so owned by an individual that has monetary value is an asset. They include real estate, personal property and debts owed to the individual by others. Liquid assets are those which can be quickly converted into cash like bank accounts, stocks and shares, bonds, mutual funds etc.
Assignment
The handing over or transfer of ownership of one's mortgage be it a company or individual to another is an assignment.
Assumable mortgage
A loan that allows a home buyer to take over a seller's mortgage when purchasing a home. The borrower must qualify to assume the loan. When you assume a mortgage you inherit both the interest rate and monthly payments. It can save you money if the exsiting interest rate on the mortgage is lower than the current market rate and closing costs are avoided as well. If the loan comes with a stipulation that the mortgage has to be repaid upon the sale of property then it is not termed as assumable.