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Absolute Auction
All properties are sold to the highest bidder; the seller has no reservation prices.

Abstract Of Title
A written history of the title transactions or conditions bearing on the title to a designated parcel of land. It covers the period from the original source of title to the present and summarizes all subsequent instruments of public record by setting forth their material parts

Causing the full amount of a loan to be due upon default of certain provisions.

A buyer's or seller's agreement to enter into a contract and be bound by the terms of the offer.

Account Termination Fee
A fee that is often charged if you pay in full and terminate your home equity line of credit during the first five years. Payment down to a zero balance does not count as termination.

Accrued Interest
The interest that has accumulated over the time elapsed since the borrower's last payment.

Actual Cash Value Coverage
Homeowner's insurance that pays only the current, depreciated value of furniture and other household possessions when they are damaged or destroyed. Provides less protection than replacement-cost coverage.

Something added, for example, a list or other material added to a document, letter, contractual agreement, etc. An attachment to a contract, often to describe required inspections or financing terms.

Additional Principal Payment
A payment made by a borrower of more than the scheduled principal amount due, in order to reduce the outstanding balance on the loan, to save on interest over the life of the loan and/or pay off the loan early.

Adjustable Mortgage Loan
Any mortgage that does not have a fixed interest rate and a fixed payment for the term of the loan, or does not amortize to zero at the end of the set term, when required payments are made on time.

Adjustable Rate Mortgage (ARM)
Mortgage in which the rate of interest is adjusted based on a standard rate index. Most ARMs have a cap on how much the interest rate may increase.

Adjusted Balance
An interest calculation method used by some credit card issuers in which they subtract all payments made during the month, then add the calculated finance charges.

Adjusted basis
The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken

Adjusted Gross Income (AGI)
The amount of your income that is taxable. AGI consists of your gross income from taxable sources minus certain items, such as payments to a Keogh plan or a deductible Individual Retirement Account. AGI minus deductions and personal exemptions equals your taxable income.

The amount added to or subtracted from the sales price of comparable properties to obtain an adjusted sales price that more accurately reflects the subject property’s value.

Adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

Adjustment Interval
When an adjustable-rate mortgage (ARM) is negotiated, provision is made for the intervals of interest rate adjustment. This allows the lender to adjust the interest rate charged and the payments required from the borrower at prescheduled times.

Adjustment Period
The period that elapses between the adjustment dates for an adjustable rate mortgage (ARM), typically 6 months or 1 year for the most popular ARMs.

A person appointed by a probate court to administer the estate of a person who died intestate.

Ad valorem tax
Tax based on the value of the property.

A sworn statement in writing, usually made before a notary.

Affinity Card
A credit card offered by two organizations, one a lending institution, the other a non-financial group. Schools, non-profit groups, pro wrestlers, popular singers, and airlines are among those featured on affinity cards. You may be entitled to special discounts or deals from the non-financial group. See co-branded cards.

Affordability Analysis
A preliminary analysis of a borrower's ability to afford the purchase of a home. An affordability analysis takes into consideration factors such as income, liabilities, and available funds, along with the type of home loan, the likely taxes and insurance for the home, and the estimated closing costs.

Agreement of Sale
Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties.

Alternative Mortgage
Products 7/23 and 5/25 mortgages—Mortgages with a one-time rate adjustment after seven years and five years respectively.

Alternative Mortgage Instruments
Mortgage instruments that may help qualify borrowers who otherwise may not be able to qualify for a standard 30-year, fixed-rate mortgage loan.

A feature that enhances property value. Examples are off-street reserved parking within a Condominium community, the proximity of public transportation, tennis courts, or a swimming pool.

The process of gradually repaying a loan over an extended period of time through periodic installments of principal and interest.

Amortization Period
That period of time over which a calculated mortgage payment will fully repay a set loan at a set interest rate.

Amortization Schedule
A timetable for payment of a home loan. An amortization schedule shows the amount of each payment applied to interest and principal and the remaining balance after each payment is made.

To repay a loan with regular payments that cover both principal and interest.

Amortized Loan
A loan which is paid off in equal installments during its term.

Amount Financed
The loan amount minus any prepaid fees and points.

Annual Fee
Yearly charge for the use of a credit card, which is billed directly to your statement.

Annual Maintenance Fee
An amount that is charged each year for having a line of credit made available by Countrywide. It is charged regardless of whether or not the credit line is used. For some programs and in some states, an annual fee is not charged.

Annual Percentage Rate (APR)
The cost of credit as a yearly rate or interest rate reflecting the first-year rate including certain points and credit costs. The actual interest rate the borrower pays when all the costs of obtaining credit are included.

Annual Percentage Yield (APY)
Percentage, required by Truth in Savings regulations to be disclosed on interest-bearing deposit accounts, that reflects the total interest to be received, based on an institution's compounding method for a 365-day year.

Regular periodic payments made by an insurance company for a specified period of time. An amount paid at regular intervals for a set period of time. Mortgage payments are a form of an annuity paid to the lender.

One who applies for a real estate loan (the prospective borrower/mortgagor).

A form used by a borrower to submit pertinent financial and property information concerning a borrower/mortgagor and the proposed security.

Application Fee
A fee usually paid at the time an application is given to a lender for helping to complete and review an application. Some lenders collect fees for a property appraisal and a credit report, instead of an application fee, at the time of application.

A report made by a qualified appraiser setting forth an opinion of estimate of value. The term also refers to the process by which the estimate is obtained.

Appraisal Fee
The charge for estimating the value of property offered as security.

Appraised Value
An estimate of property value made by a qualified expert.

A qualified by education, training, and experience to estimate the value of real estate and personal property.

An increase in the value of a property. Appreciation must be the result of an increased demand for property, any improvements or additions made, improvements to the neighborhood, etc.

Anything that is or becomes part of the property because it is attached or closely related to the land. It may be a structure such as a well, barn or garage; or it may be a right or interest enjoyed by the previous owner, such as an easement.

The total, accumulated, delinquent principal, interest, taxes and insurance (PITI) amount that a borrower owes a lender.

Asked Price
The lowest amount at which an investor is willing to sell a security or commodity.

Assessed Value
A public tax assessor’s appraisal of the value of an asset to calculate tax.

Assessed Valuation
The value a taxing authority places upon real or personal property for the purpose of collecting payment of taxes on the property.

Tax on real property either by an annual property tax based on current fair market value or via special assessments for sewers, public improvements, etc.

Assessment Rolls
A public record of the assessed value of property in the taxing jurisdiction.

A public official who evaluates property for the purpose of taxation.

Asset Allocation
Dividing investments among various asset classes.

Asset Management
Account An account at a brokerage or bank that includes the services of both. Asset management accounts generally offer check-writing privileges, credit or debit cards, and automatic transfers from one account to another. They often require an annual fee.

Things you own, including real estate, investments, and personal property.

The method of transferring a right or contract, such as the terms of a loan, from one person to another.

Assignment of Rents
A written agreement wherein the owner of a property transfers to another party-usually a mortgagee or creditor-possession of the property (but not its ownership) and the right to collect rents, manage the property, and apply the net income toward delinquent mortgage payments.

Assumable Loan
A home loan that allows a new purchaser of the home to take over ("assume") the loan obligations of the seller when a home is sold.

A method of selling real estate wherein the property purchaser agrees to take over the primary liability for payment of an existing mortgage.

Assumption Clause
A provision in an assumable loan that allows a buyer to assume responsibility for the home loan from the seller. The loan does not need to be paid in full by the original borrower (seller) upon sale or transfer of the property.

Assumption Fee
The fee paid to a lender (usually by the buyer) for the lender's agreement to start collecting payment from the buyer instead of the original borrower (seller).

ATM Card
A card used in an automated teller machine (ATM) which may access a credit or a debit account to complete banking inquiries and fund transfers between accounts.

One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.

Average Annual Yield
The average yield per year over the life of the investment, assuming all principal and interest remain on deposit until maturity.

Average Daily Balance
An interest calculation method used by credit card issuers. The average daily balance is determined by adding each day’s balance and dividing that total by the number of days in the billing cycle. The average daily balance is then multiplied by a credit card’s specified periodic rate to compute interest due.

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The glossary terms are samples provided for discussion purposes only.
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