Abstract of Judgment – A summary of a court judgement filed with the County Recorder.

Abstract of Title – A summary of all recorded proceedings and investments that affect a property’s title.

Accelerated Cost Recovery System – A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.

Acceleration Clause - A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender.

Acceptance – An offeree’s consent to enter into a contract and be bound by the terms of the offer.

Accrued Interest – Earned but unpaid interest.

Accumulated Depreciation – In accounting, the amount of depreciation expense that has accumulated to date.

Acknowledgment - A declaration by a document’s signer that he or she voluntarily signed the document, made before a duly authorized person.

Acquisition Cost - The price and all fees required to purchase a property.

Acquisition Loan - Money which is borrowed for the specific purpose of buying a property.

Acre - A two-dimensional measure of land that is equal to 43,560 square feet or 4,840 square yards.

Addendum – An additional article or provision which has been attached to an existing contract.

Additional Principal Payment – A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.

Adjoining – Land which is attached, contiguous, or shares one or more borders.

Adjustable Rate Mortgage (ARM) – A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.

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 Cost Basis – See Adjusted Basis.

Adjusted Tax Basis – The original cost of the property, reduced by depreciation deductions and increased by capital expenditures.

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

Adjustment Period – The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

Administrator – A person appointed by a court to administer the estate of a deceased person who left no will.

Administrator’s Deed – A legal document used to transfer property by the administrator of an estate.

Adverse Possession – A method of acquiring a property when an occupant has been in legal occupancy of the property for a set period of time (variable by state).

Affidavit – a written statement, sworn to or affirmed before a legally authorized officer or agent.

Affordability Analysis – A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration your income, liabilities, and available funds, along with the type of mortgage you plan to use, the area where you want to purchase a home, and the closing costs that you might expect to pay.

Agency – the relationship between a principal and his agent as defined by a contract in which the principal asks the agent to perform certain deeds on behalf of the principal.

Agreement for Deed – see Contract for Deed.

Alienation – to transfer title and possession of property to another party.

All Inclusive Trust Deed – An all inclusive trust deed is identical to a wraparound mortgage. It is used in states that use trust deeds instead of mortgages.

Amenity – A feature of real property that enhances its attractiveness and increases the occupant’s or user’s satisfaction although the feature is not essential to the property’s use. Natural amenities include a pleasant or desirable location near water, scenic views of the surrounding area, etc. Human-made amenities include swimming pools, tennis courts, community buildings, and other recreational facilities.

Amortization – The gradual repayment of a mortgage loan by installments.

Amortized Loan – a loan that is repaid in several installments, each containing a portion used to reduce the principal amount of the loan and a portion that is applied to pay interest. Each payment designates a larger portion to principal reduction and a smaller portion to interest payment, until the outstanding balance is eventually paid off in full.

Amortization Term – The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.

Amortization Schedule – A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.
Amortize – To repay a mortgage with regular payments that cover both principal and interest.

Annual Cap – the maximum amount by which the interest rate on an adjustable rate mortgage can increase or decrease during a one-year period.

Annual Mortgagor Statement – A report sent to the mortgagor each year. The report shows how much was paid in taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.

Annual Percentage Rate (APR) -This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage. It works sort of like this, but not exactly, so only use this as a guideline: deduct the closing costs from your loan amount, then using your actual loan payment, calculate what the interest rate would be on this amount instead of your actual loan amount. You will come up with a number close to the APR. Because you are using the same payment on a smaller amount, the APR is always higher than the actual note rate on your loan.The Truth-in-Lending Law requires the disclosure of this rate.

Annuity – An amount paid yearly or at other regular intervals, often on a guaranteed dollar basis.

Anticipatory Breach – A preliminary notification that informs one party that the other party will not fulfill the obligations of their original contract.

Application – A form used to apply for a mortgage loan and to record pertinent information concerning a prospective mortgagor and the proposed security.

Appraisal - A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.
Appraised Value - An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price.
Appraiser – An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.
Appreciation – An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.
Arrears – Extra payments, such as prior months’ interest or overdue payments in default.
As-Is – A property offered with no guarantees related to its condition
Assessed Value -The valuation placed on property by a public tax assessor for purposes of taxation.
Assessment – The process of placing a value on property for the strict purpose of taxation. May also refer to a levy against property for a special purpose, such as a sewer assessment.

Assessment Rolls – The public record of taxable property.

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

Asset – Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).

Assignee – The party to whom an Assignor sells or transfers an agreement or contract.

Assignment – When ownership of your mortgage is transferred from one company or individual to another, it is called an assignment.

Assignor – The party who assigns or transfers a contract or agreement to another party (the Assignee).

Assumable Mortgage – An existing mortgage in which the new purchaser of a property is made liable for the payments and any other obligations of the note and mortgage. Depending on the type of loan, the new purchaser’s assumption of these obligations may require a process of approval, and may or may not release the original borrower from future liability. A written release from the mortgagee (lender) is required for the original borrower to be relieved of responsibility for the payments.

Assumption -The transfer of the seller’s existing mortgage to the buyer. See assumable mortgage.

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

Assumption Fee – The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.

Attorney-In-Fact – One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.

Attornment – The formal agreement of a tenant to be a tenant to a landlord.