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GLOSSARY
Adjustable rate mortgage (ARM)
The ARM is a loan secured on property whose interest rate and monthly repayments vary over time. The variations in ARM usually correspond and depend on the flucatuations of a pre-determined index. Due to its nature, it is also known as the Variable Rate Mortgage or the Negotiable Rate Mortgage.\n\nSee further Adjustment date, Convertible ARM, Fixed rate mortgage
Adjustable-rate mortgage
An adjustable-rate mortgage, or ARM, is a form of financing secured by real estate which carries an interest rate that may change over the life of the loan. The interest rate on an ARM is defined as a variable financial index plus or minus a margin, such as "1-year Constant Maturity Treasury plus 2.5%."
Adjusted balance
Adjusted balance is a method used to calculate monthly finance charges, usually on a revolving credit card account. The formula uses the end-of-period account balance, after all credits have been posted, to calculate the finance charges. Other methodologies include average daily balance and previous balance method.
Adjusted balance method
The adjusted balance method is used to calculate monthly finance charges, usually on a revolving credit card account. The formula uses the end-of-period account balance, after all credits have been posted, to calculate the finance charges. Other methodologies include average daily balance and previous balance method.
Adjusted Basis
The cost of a property plus the value for improvements to the property minus any depreciation taken.
Adjusted cost basis
Adjusted cost basis is the value of an asset, reflecting the amount paid for the asset plus improvements made and less depreciation.
Adjusted exercise price
Adjusted exercise price is the price at which an option can be bought or sold, taking into consideration any underlying stock splits. Specific to put and call options on Ginne Mae contracts, the exercise prices on these options are adjusted so that different pools of mortgages have the same value to investors, even when their coupon rates differ.
Adjusted funds from operations - AFFO
Adjusted funds from operations, or AFFO, is a non-GAAP measure designed to measure a real estate income trust's, or REIT's, residual cash flow. This is important because REITs use residual cash flow to pay shareholder dividends. There are many ways to calculate AFFO, but a common formula is funds from operations (FFO) less maintenance capital expenditures.
Adjusted gross income - AGI
Adjusted gross income, or AGI, determines the federal tax liability of an individual or married couple filing jointly. Income includes salaries, wages, and other earned amounts, plus investment income and business profits. Adjustments to income might include qualified retirement contributions, business expenses, etc. AGI is income less these qualified adjustments.
Adjustment bureau
An adjustment bureau is an organization that provides assistance in the management of insurance claims and financial dealings, often on behalf of bankrupt debtors.
Adjustment date
The interest rates on Adjustable Rate Mortagage change periodically. The date on which this change occurs is called the adjustment date.
Adjustment frequency
Adjustment frequency refers to how often the interest rate on an adjustable-rate mortgage (ARM) can be reset. Most ARMs have an adjustment frequency of one year, meaning that the rate would be adjusted once annually. Longer or shorter adjustment frequencies are also available.
Adjustment Interval
The adjustment period or interval is the time between changes in the monthly payment or the interest rate on an adjustable rate mortgage (ARM).Most mortgages come with an adjustment period of 1, 3, 5, or 7 years. This means your interest rate is fixed for that amount of time. After that, the interest rate can adjust up or down, depending on the market.
Adjustment period
Adjustment period refers to how often the interest rate on an adjustable-rate mortgage (ARM) can be reset. Most ARMs have an adjustment period of one year, meaning that the rate would be adjusted once annually. Longer or shorter adjustment periods are also available.
Affordability
An estimate as to how much a person can afford in order to purchase a home. Affordability gives the consumer a possible price that they could be approved for and also gives the amount they will be required to pay for their mortgage payment.