A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

These definitions acquaint you with terms commonly used in the homebuying process. They are intended to be general and brief and are not complete and wholly accurate when applied to all possible uses of each term. Please consult your New Home Sales Respresentative and Home Mortgage Consultant for more information.

A

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.

Additional principal payment

A payment made by a borrower of more than the scheduled principal amount due. You might do this if you want to more quickly reduce the remaining balance owed.

Adjustable rate mortgage (ARM)

A mortgage in which the interest rate is adjusted periodically based on a preselected index. Also sometimes known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage.

Amenity

A nice feature of the house, but something which isn't crucial to the house's very existence. A roof, for instance, is not an amenity; it's a necessity. An amenity might be a lovely view of the sunset over the ocean, or a swimming pool or tennis court.

Amenity

A nice feature of the house, but something which isn't crucial to the house's very existence. A roof, for instance, is not an amenity; it's a necessity. An amenity might be a lovely view of the sunset over the ocean, or a swimming pool or tennis court.

Amoritization

The period of time during which you will owe interest and principal to your lender.

Amoritization Means

Regular loan payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

Amortization Schedule

A schedule that provides a breakdown of the principal and interest payments, and the amount outstanding at any given point during the amortization period.

Amortize

To repay a mortgage with regular payments, both the principal due and the interest.

Annual membership or participation fee

An amount that is charged annually for having the line of credit available. It is charged regardless of whether or not you use the line.

Annual percentage rate (A.P.R.)

An 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 points and other credit costs. 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 loan, on which you'll put relevant information about yourself. Also refers to the whole process of applying for a loan.

Appraisal

An estimate of the value of the property, made by a qualified professional called an "appraiser". An appraisal is required by your bank to determine how much money it will lend you.

Appraised value

An opinion of a property's fair market value, given by an appraiser, whose job it is to evaluate such things.

Appreciation

An increase in the value of a property due to changes in market conditions, or for other reasons. The opposite of depreciation.

Assessment

A local tax levied against a property for a specific purpose, such as a sewer or street lights.

Assessment rolls

The public record of taxable property.

Assessor

A public official who establishes the value of a property for purposes of taxation.

Asset

Anything with a dollar value that you own. Your assets are tallied up when the bank is trying to figure out what it can afford to lend you.

Assignment

The transfer of a mortgage from one individual to another. This isn't always allowed.

Assumable mortgage

A mortgage (on a home) that can be taken over by the buyer of the home.

Assumption

The agreement between buyer and seller in which the buyer takes over the payments on an existing mortgage from the seller.

Assuming a loan can usually save the buyer money, since this is an existing mortgage debt, unlike a new mortgage where closing costs as well as new, possibly higher, market-rate interest charges may apply.

Assumption fee

Fee usually paid by the buyer to a lender if the buyer assumes, or takes on, an existing mortgage.

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