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Glossary
A
Adjustable-rate mortgage (ARM): A type of
mortgage for which the interest rate is not fixed, in
fact the interest rate changes over the life of the loan
according to the movements in an index rate. ARMs are
also referred as AMLs (adjustable-mortgage loans) or
VRMs (variable-rate mortgages).
Adjustment
Interval: For an adjustable rate
mortgage, the
time interval between changes in the interest rate
charged is called Adjustment interval. The most common
adjustment intervals are one, three or five years.
Amenity:
It is a feature a feature of the home or
property that serves as a benefit to the buyer and adds
value to the property but that is not necessary to its
use; may be natural (like location, Woods, water) or
man-made (like a swimming pool or garden).
Amortization: This refers to repayment of a
mortgage loan through monthly installments of principal
and interest; the monthly payment amount is based on a
interval that will allow you to own your home at the end
of a specific time period (for example, 15 or 30 years)
Annual
membership or maintenance fee: An annual charge
for having the line of credit available. Charged
regardless of whether or not the line is used.
Annual percentage rate (APR): A measure
of the cost of credit, expressed as a yearly rate. It
includes interest as well as other charges. Because all
lenders follow the same rules when calculating the APR,
it provides consumers with a good basis for comparing
the cost of loans, including mortgages.
Annual Percentage Rate (APR):
calculated by using a standard formula, the APR shows
the cost of a loan; expressed as a yearly interest rate,
it includes the interest, points, mortgage insurance,
and other fees associated with the loan.
Annual percentage rate (APR): The cost
of credit on a yearly basis expressed as a percentage.
Application fee: Fees that are paid upon
application. May include charges for property appraisal
and a credit report.
Application: the first step in the official
loan approval process; this form is used to record
important information about the potential borrower
necessary to the underwriting process.
Appraisal: a document that gives an estimate of a
property's fair market value; an appraisal is generally
required by a lender before loan approval to ensure that
the mortgage loan amount is not more than the value of
the property.
Appraisal:
The determination of property value based on
recent sales information of similar properties.
Appraiser:
a qualified individual who uses his or her experience
and knowledge to prepare the appraisal estimate.
ARM:
Adjustable Rate Mortgage; a mortgage loan subject to
changes in interest rates; when rates change, ARM
monthly payments increase or decrease at intervals
determined by the lender; the Change in monthly -payment
amount, however, is usually subject to a Cap.
Assessor:
a government official who is responsible for determining
the value of a property for the purpose of taxation.
Assumable
mortgage: a mortgage that can be transferred
from a seller to a buyer; once the loan is assumed by
the buyer the seller is no longer responsible for
repaying it; there may be a fee and/or a credit package
involved in the transfer of an assumable mortgage. |
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